Marketing ethics refers to the moral principles concerning acceptable and unacceptable behavior related to the operation of marketing by business people (Baron’s Educational Series, 2007). In order to obtain higher profit, some of the companies may violate business ethical values. Background Matter founded in 1945 is one of the largest toy companies in the world (Fortune, 2008). Although Matter is a major toy company, there are many unethical issues found. Firstly, Matter s products contained lead paint and tiny magnets that could be swallowed (Amour, 2007).
Secondly, Matter called toys frequently as there were five recalls in less than a year (Matter. Com, 2010). Thirdly, the packaging of Matter s product contributed to rainforest’s destruction (Jakarta, 2011 According to the American Marketing Association (AMA), these activities are unethical and violate 3 ethical values including responsibility, honesty and citizenship. Responsibility For responsibility, Matter failed to accept the consequences of our marketing decision and strategies. Matter did not recognize their special commitments to vulnerable market segments such as children who may be disadvantaged.
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First of all, on August 14 2007, Matter ;s product, the ‘Serge’ cars, was discovered with lead paint and tiny magnets which are harmful and dangerous to children. Although the product was recalled, some of the products which are claimed passed still contain lead paint. However, Matter minimized the impact of the use of lead paint. In fact, lead is toxic if ingested by children and there is no safe level of lead in them according to Dry. John Rosen, a lead poisoning specialist (Consumer news, 2007).
Although the dangers of lead poisoning are hidden and unobservable, Matter should take he responsibility instead of doing nothing to prevent the dangers . This violates the ethical value of responsibility because Matter failed to recognize their special commitments to their customers. Honesty For honesty, Matter failed to forthright in dealings with customers and stakeholders. Matter promises that their priority is the safety of the children who play with their toys (Relied, 2007). However, there were four recalls in six months in 2007, but Matter did not draw a lesson. In 2010, Matter toys had been recalled for five times.
One of the products called Tries and Tough Tries toddler tricycles led to 10 serious injuries before the product was recalled. In order to meet their promise and ensure the safety of children, Matter should check the quality of their products carefully before they are sold. In these cases, Matter did not have an adequate quality control in the manufacturing process. Being the largest toy company in the world based on the revenue, Matter should not recall the defected products only if the injuries happen. As a result, Matter did not honor their promise to place children safety at the first place.
This violates the ethical value of honesty according to AMA. Citizenship In terms of citizenship, Matter failed to fulfill the economic, legal, philanthropic and societal responsibilities that serve stakeholders. Greenback evidenced that Barbie doll packaging come from Indonesian rainforest’s. Matter did not protect the ecological environment in the execution of marketing campaigns. Matter was using products from Asia Pulp and Paper (PAR), a pulp and paper company notorious for destroying Indonesian rainforest’s, leading to the extinction of Sumatra Tiger (Greenback, 201 1).
The product of Matter, Barbie, was wrapped up in enforces destruction which destroys the ecological environment and pushes critically endangered wildlife towards extinction. Although Matter adopted a new packaging policy after the blame from the public, they still did a lot of damages to the environment. According to ! 1 AMA this practice is unethical because Matter failed to fulfill the societal responsibility to serve the public and violates citizenship. Conclusion To sum up, consumers lose confident to Matter ;s products because of the mentioned unethical activities.
In contrast, the new phone 4 is not positively received by market consumers due to Apple’s unethical marketing strategies. These unethical marketing activities have generated controversies amongst market consumers whether the new gadget should be preferred over other smart phones. An apparent violation of the Mama’s statement of ethics is honesty. It is best demonstrated by the promotion of phone 4. The newly launched phone 4 have been reported by their users with a problem in reception quality. phone 4 has its antenna exposed on the outer rim of the phone which makes it more susceptible to interference.
The report by Burrows and Gullied (2010) has documented Steve Jobs, the CEO of Apple, is well aware of the flaw in the sign. However, official recognition of the problem only came after significant users have reported phone g’s call quality issue. In this manner, Apple has deceived market consumers into buying phone 4. Another ethical value that has been undermined by Apple is transparency. The underlying principle of transparency is to take responsible actions in regards to product risks that could affect customers’ evaluation of the product (AMA 2010).
Although German and Cog (2010) state the use of a free bumper case is able to eliminate the call quality issue, Apple’s responses to the crisis is unacceptable. It had tried to minimize its responsibilities in this incident by explicitly saying that other brands also have the antenna issue (Michaels 2010). It had told customers to hold the phone differently in order to avoid the signal drop (Earthman 2010). The denial of responsibilities cannot demonstrate the company to have satisfied transparency in its marketing activities. Lastly, Apple has breached citizenship in accordance with the AMA ethical standard.
A stress made in citizenship is to “ensure that trade is fair for all participants, including producers in developing countries” (AMA 2010). Recent incidents in the Foxhound’s factories have exposed Apple’s inability to uphold fairness while dealing with its manufacturer. Seventeen suicides have been attempted by Foxing workers this year which raise suspicions about the working conditions inside the factories (Tam 2010). Although Foxing is responsible for the harsh working conditions inside the factories, Apple has aided in the exploitation of labors in China by loosely overseeing its producer.
In conclusion, Apple has seriously infringed several ethical standards that are set forth by the American Marketing Association. The many has violated the honesty principle by hiding the flaw in the antenna design and denies the mistake made by the engineering team. It has failed to uphold transparency by denial of responsibilities. Apple has breached citizenship by allowing Foxhound’s exploitation of labors in China. The overall failure to defend the marketing ethics has left several black spots on the company’s profile. Apple will need to amend the damages done to its reputation in order to regain consumers’ faith.