Business, in today’s world of financial turmoil, will use every advantage to sell its products and services.
Many companies with advertising and marketing budgets have persuaded us that we cannot live without their products. They take advantage of customers’ health, image and ego’s, which leads to huge spending on unnecessary products. Water is a great example: it is essentially a free resource, but is actually a $60 billion industry around the world. Why? Because companies have persuaded us that bottled water is cleaner and better than tap water.
Marketers also use sneaky tactics to increase sales. Toothpaste manufacturers hit on the idea of widening the mouth of the tube in order to get customers to use more paste by volume. One shampoo manufacturer added two words on the bottle that led to a dramatic increase in consumption: “Rinse. Repeat.”
The big question is: Do we do whatever it takes in the short term in order to survive (and live with the consequences) or should we take a longer-term view and ensure our business’s future? Many companies take the short term view, but their tactics sometimes border on the immoral, unethical, and perhaps even illegal, and these practices, when exposed, could lead to serious negative penalties.
The more obvious illegal activities include collusion with competitors to fix prices, hiding information about the actual product and true prices until after customers have signed contracts, charging excessive interest rates on hire purchase, and many more dubious tactics covered in the Consumer Protection Act and other statutes. Occasionally, poor publicity and legal action may lead to these being stopped but ultimately questionable marketing tricks depend on human frailty – people’s gullibility coupled with a desire to get something for nothing, or to look good amongst their friends.
Some dodgy practices identified on the rumour mill
Cookie-based price gouging: Airlines flag interest in specific flights when consumers browse its Internet site by attaching a cookie to the visiting computer. When you return to the website to book the flight, the price has suddenly increased as the airline has identified keen interest in the destination by your previous enquiry.
Bandwidth throttling: Internet Service Providers (ISPs) slow down bandwidth when you reach a set percentage of your monthly allocation, and your internet access hits snail pace. As you look for a solution, you become the victim of the soft touch when the ISP advises you to go uncapped – at a higher fee.
Creating additional demand: Some bottled water and energy drink companies add sodium – an ingredient that actually causes dehydration. There are still foods out there that contain huge amounts of MSG – which is not only very addictive, but a cause of obesity in children.
Freemium: (a compound of ‘free’ and ‘premium’) refers to the practice of making a core offering available for free, but charging a premium for extras once consumers make further use of the underlying product or service.
Unethical trading practices are fast coming to the end of their shelf-life thanks to advances in consumer networking. Engaging in such tactics is playing with fire. It doesn’t matter how sophisticated the ruse is, the truth will out. When these devious tactics are exposed, can you live with the consequences?