It is often said that insurance real estate and used cars are sold not bought

It is often said that insurance real estate and used

This preview shows page 4 - 6 out of 6 pages.

they had no thought of buying. It is often said that insurance, real estate, and used cars aresold, notbought. Salespeople are trained to deliver smooth, canned talks to entice purchase. They sell hard because sales contests promise big prizes to those who sell the most.Another criticism concerns poor product quality or function. One complaint is that, too often, productsare not made well and services are not performed well. A second complaint is that many products deliver little benefit, or that they might even be harmful. A third complaint concerns product safety. Critics also have charged that some companies practice planned obsolescence, causing their products to become obsolete before they actually should need replacement.Finally, marketing has been accused of serving disadvantaged consumers poorly. For example, critics claim that the urban poor often have to shop in smaller stores that carry inferior goods and charge higher prices. The presence of large national chain stores in low-income neighborhoods would help to keep prices down. However, the critics accuse major chain retailers of “redlining”—drawing a red line around disadvantaged neighbourhoods and avoiding placing stores there. Similar redlining charges have been levelled at the insurance, consumer lending, banking, and health care industries.Question 3Critics charge that a company’s marketing practices can harm other companies and reduce competition. Three problems are involved:acquisitions of competitorsmarketing practices that create barriers to entryunfair competitive marketing practicesCritics claim that firms are harmed and competition reduced when companies expand by acquiring competitors rather than by developing their own new products. The large number of acquisitions andthe rapid pace of industry consolidation over the past several decades have caused concern that vigorous young competitors will be absorbed and that competition will be reduced. In virtually every major industry, the number of major competitors is shrinking. Acquisitions can sometimes be good for society. The acquiring company may gain economies of scale that lead to lower costs and lower prices. A well-managed company may take over a poorly managed company and improve its efficiency. An industry that was not very competitive might become more competitive after the acquisition. But acquisitions can also be harmful and, therefore, are closely regulated by the government.Critics have also charged that marketing practices bar new companies from entering an industry. Large marketing companies can use patents and heavy promotion spending or tie up suppliers or dealers to keep out or drive out competitors. Those concerned with antitrust regulation recognize that some barriers are the natural result of the economic advantages of doing business on a large scale. Other barriers could be challenged by existing and new laws.Finally, some firms have, in fact, used unfair competitive marketing practices with the intention of
Image of page 4
hurting or destroying other firms. They may set their prices below costs, threaten to cut off business with suppliers, or discourage the buying of a competitor’s products. Various laws work to prevent such predatory competition. It is difficult, however, to prove that the intent or action was really predatory.Question 4Consumerism is an organized movement of citizens and government agencies to improve the rights and power of buyers in relation to sellers.
Image of page 5
Image of page 6

You've reached the end of your free preview.

Want to read all 6 pages?

  • Spring '15
  • Marketing, Ethics, American Marketing Association, sustainable marketing concept, marketing practices

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes