Marketing Topic Category and Issue
Dishonesty of promotion
Specific Issue Title
Deceptive advertising
Issue Full Description
Kellogg’s used false advertisements to promote the Mini-Wheats products from 2008-2009. The company claimed that consumption of this product improved the level of children’s intelligence.
Sources Titles
Attachment 1: https://courses.cit.cornell.edu/jl2545/adpapers/Emily%20Wang.pdf
Attachment 2: https://www.haas.berkeley.edu/groups/marketing/sics/pdf_2015/paper_rw.pdf
Attachment 3: https://www.cbc.ca/news/business/kellogg-fined-4m-for-false-mini-wheats-advertising-1.1388018
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Imbalances
Goal of business
To increase the number of sales and profit generation in the company
Goal of opposition
Provision of truthful information to ensure people make they purchase healthy foods for consumption
Eight known facts
Business benefit facts
Attract new customers
Form of competitive advantage
Short-term profit increase
Brand popularity
Boost shareholder’s confidence in the organization
Business harm facts
Low customer satisfaction levels
Reduced customer purchase intention
Development of poor brand image
Negative publicity spread through word of mouth
Poor brand image
(Ullah ,& Hussain, 2015)
Five Critical-Thinking Questions
What motivated the company to use deceptive advertsing?
Did the company consider the financial impact of its decision?
How was the FTC notified about Kellog’s deception?
How did the shareholders and investors react to the scandal?
Does Kellog still rely on deceptive advertising to promote its products?
Publics/Stakeholders Affected
| Public | Positive Effects (Potential benefits) | Negative effects (Potential negative effects) |
| Target market | No benefit | Inability to achieve good health status Feel cheated |
| Future markets | No benefit | Loss of confidence in a company |
| Employees | Lose confidence in the company | |
| Investors | Higher stock place Confidence in the company | No wealth maximization in the long-run |
Intensity Issues
Severity-the company lied that its product increased children’s intelligence by 18%.
Magnitude-Kellog is an international company and the products were sold all over the world
Social consesnsus-consumers agreed that Kellog’s actions were unethical and the company broke their trust.
Three moral frameworks
Utilitarian theory
Egoism theory
Deontology theory
Your choice for the organization
Your realistic recommended future action for the company and supporting paradigm
Use research and innovation to create unique products with high demand instead of resulting to deception.
b.
1. Identification of consumers’ needs
2. Better resource utilization
3.Cost reduction and efficiency
4. Establishment of competitive advantage
5. Improve business performance
c. Two assumptions
Availability of monetary resources for investment into research and development
Availability of technical skills
Three anticipated opposing arguments
Monetary investment can be used for more profitable actions
Research and innovation is time consuming
The results of research and innovation tale long before they are economically useful in an organization.
Mirror reflection
Firms should avoid using deceptive advertising to mislead consumers. The costs of false adverts are greater than the benefits pf misleading people.
References
Ullah, N., & Hussain, M. (2015). Impact of Unethical Advertising, Misleading Information or Deceptive Advertising on Customer Purchasing Intention with Mediating Effect of Word of Mouth: Case of Pakistan. International Journal of Innovation and Economic Development , 1 (4), 49-69.
