Marketing allows businesses to implement unethical pricing strategies. The objective is to increase profits and market share. If organizations eliminated marketing, the prices of their products and services would be lower. Although marketing creates intangible benefits for products, companies need to price their products ethically. Therefore, the consensus that marketing increases the prices of products and services rests on the ethical price that companies must not infringe on values of autonomy, transparency, and honesty.
Marketing occurs within the crux of pricing ethics. McDonald’s has had the highest market share because of its high advertisement expenditure (64). Although spending on marketing programs does not guarantee increased market share, companies engage in advertisement to achieve a competitive advantage. If these companies agreed to reduce their marketing costs, they would likely experience reduced operations costs. For this reason, marketing increases the costs of products and services because companies need to meet their increased costs.
Firms that operate in highly competitive environments use extensive marketing programs. Companies that produce soft drinks, t restaurant, automobiles, and athletic apparel would consider reducing the size of their marking budget (63). As a result, all these gears towards constraining the company into ethical marketing. If the competitors insist on increasing their budgets for marketing, these companies will extend their expenditure depending on their target market and the existing market share. Thus, the companies start pursuing their self-interest that can result in customer disloyalty. To avoid the ethical concerns that come with increased marketing costs, companies should develop a pricing strategy that moves away from the high competition.
Marketing has a significant impact on trust and brand recognition. Over the years, consumers tend to purchase products that come with intangible benefits, such as the brand’s quality (63). Therefore, target marketing comes with ethical concerns. For instance, when a company has a monopoly of specific products, direct competitors would need to consider their ethical principles in justifying their prices. Therefore, a reduced marketing cost reduced operations costs and allowed the company to charge lower prices.
Global advertising has been on the growing trends. Today, most major companies share in the global marketing expenditure. The growth is at about 4 percent because of digital marketing. Google and Facebook account for 85 percent of all digital advertisements (64). Although advertisement aims to increase brand awareness, it contributes to the increasing cost of operations. However, the bridge the gap of increased competition and achieve high market share, companies tend to utilize pricing strategies that persuade the target markets without necessarily focusing on truths. The primary pricing consideration develops based on integrating costs that pay for overheads, materials, and labor and sell at reasonable margins. The market price includes the cost of the product, the company’s profit margins, and the shareholders’ dividends. With the increasing cost of advertisement, companies must continue increasing the cost of their products.
Marketing contributes to the cost of the products. Advertisements come with significant benefits of increasing brand awareness and allowing the company to compete in the industry. However, the focus on achieving profits and market share is likely to lead the company in making unethical pricing decisions. Therefore, companies should pronounce themselves on the ethical practice that regards their association with customers. Therefore, regardless of the marketing budget, a company should communicate with consumers the ethical pricing strategies to ensure that brand loyalty and trust issues remain.
Work Cited
Chapter 3: Marketing Ethics, Regulations, and Social Responsibility