Business Ethic

Marketing is a collection of bodies and processes which develop activities that are aimed at benefiting all parties along the supply chain and the entire society. Advertisement is a persuasive form of communication which is aimed at an audience, listeners or readers to make them continue or make particular decisions. Advertisement is one of the marketing activities. Ethics, on the other hand, is a way of doing things in an appropriate manner, which supposed to be good in respect to a particular group. The underlying aim of advertisement is to sell a product or service. For this purpose to be achieved, advertisers may resort to use unethical means to persuade their potential buyers. Ethics in advertisement advocates for truthfulness and due diligence in avoiding misleading a buyer through advertisement.

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Defamation advertisement is making a false or offensive statement about another business, its products, services or reputation in public. The aim of such advertisement is to gain an advantage over competitors by causing them loss in sales or public trust (Kotler, 2010). Defamation advertisement, thus, is using unethical ways to have an upper hand over competitors in the market.

For a very long time, Pepsi and Coca Cola have been waging advertisement war against each other. Each party has been trying to out do the other in share of the world beverage market. Since the competition has persisted over a long period of time, cases of defamation advertisement against each other have surfaced over the years. The advertisement space has been nastier with Coke and Pepsi portraying each of their own as the superior products. With all these noise about who is better, the consumer is not aware who is telling the truth. Moreover, many consumers have to make a decision on consuming products from one company and not the other based on this information. There is no telling though, which of these two companies is speaking the truth.

Advertisement and Ethical Issues

Comparative advertising is advertisement where a product is compared with another similar product from a competitor. The aim of comparing both products is to show why the product is superior to the compactor’s product. Comparative advertisement can be either negative or positive. It could also use direct or indirect comparison. The underlying aim though is to correlate or discriminate one of the products. The main message in discriminating between two products is to set apart one product from the other(s). The aim in correlating is showing similarity in quality mostly to another superior product.

Defamation advertising is placing an advertisement aimed at disparaging or propagating falsehood against a competitor’s goods or services. Defamation advertising can also be aimed at competitor’s reputation, financial status and moral values among others. The underlying aim of defamation advertisement is to put off potential customers buying from competitors. This ensures that one`s products get unfair share of the market. In many economies, this form of advertisement is illegal.

Both Coke and Pepsi have used comparative advertising against each other. Pepsi were the first to employ such tactic against Coca cola in the 1970s, during the famous cola war between the two soft drink giants. In their “Pepsi challenge”, blind testers were used to demonstrate consumers prefer Pepsi than Coke. All the blinded participants chose Pepsi by comparing the test of Pepsi and Coke. Coke countered the move using similar claims combined with other marketing strategies to minimize the Pepsi challenge effect, which was taking a toll on Coke sales. By the end of this bout, Pepsi had overtaken Coke sales in most of the food stores. Coke has accused Pepsi on several occasions for stealing formula for its cola brands. Such claims have never been certified by Coke. This can be termed as defamatory advertising, since such claims severe the reputation of Pepsi as not being an original.

The ethical issue in both cases lies in unfair competition. In the first instance, Pepsi suggested that blind people are able differentiate Pepsi from Coca cola. The use of blind people is unethical. By using blind people, Pepsi was suggesting that if the blind can isolate Pepsi from Coke, ‘then what about those who have eyes’. This can be said to use the plight of the blind to benefit their sales. On the other hand, Coke claims that Pepsi stole its formula for Cola, has defamatory effect on the company moral standing. The Company moral standing among its customer was impaired. This caused Pepsi of their sales and a spirited campaign was used to counter those claims. This could be the reason why Pepsi shared with Coca Cola, attempts by some of its employees to sell to Pepsi the formula of its newest drink recently. Defamatory and comparison advertising affects a company’s sales against its competitors.

Utilitarian theory suggests that the right or wrong of an action is determined by its ability to yield happiness to those who is in  touch. In respect to this theory, unethical advertising touches many people in a negative manner. An action result determines the moral worth of the action. According to utilitarian theory, unethical advertising will results in a negative impact more than positive. In many cases, the impact of unethical advertising is not to the good of the majority.  Kentian theory suggests that, the only duty of the advertisement is to dictate whether an action qualify to be good or not. The duty must be in alignment with the moral law. Thus, according to Kant, any action out of the moral law or ethics disqualifies to be termed as good even though done as a duty. Unethical advertising strategy can not be of any good to society, since it is not done in accordance with a duty to the moral laws.


The effect of unethical advertising is deeply damaging to a victim product, service or organization as a whole. Many times, competition leads many companies to use unethical advertising without considerations for their rivals. This strategy can be applied to completely annihilate weaker organization. This is especially true if the competitor is a large and well established organization. The reason why Pepsi and Coke have been able to withstand many of their unethical competition is because, both of them are almost equal in financial strength and enjoy a duopoly of the market. Unethical advertising can hurt even the most financially solid companies. Further, it can have a counterproductive effect in the company practicing it against its rivals. For example, in case of Pepsi and Coke, if one of the rival market shares is adversely affected, the other company suffers.

Outside of the rival organization, other effects include misleading of consumers. When unfounded advertise is made against a rival product, its customers are left without an option, except buying from the rival companies. Others will opt not consume that particular product regardless of where it originates. This apart from being counter productive to both rivals, it denies consumers an opportunity to consume a variety.

When rivals use comparison advertising against other brands, it sometimes gives them undeserving advantage. By comparing their products with high quality products available in the market, means they put their product in the same level as quality products. The use of unethical means of advertisement also capitalizes on ignorant consumers. The youth are mostly the target of these unethical practices. Since many do not question the truth of the advertiser’s information, they end up buying what is portrayed as trendy. Such a product could be unfit or not up to the said standards. Also, in a case of “Pepsi challenge”, the use of disable people was insensitive and unethical. Such practices are unethical advertising strategies.

Companies use unethical advertising methods because it is convenient and easy to get good results. By using lies and lack of disclosure about the products` true properties, the convenience reaches the consumers who have no time to question its effects. Many companies would rather use a crude and unethical means to penetrate the market than win their clients over time. Thus, they might result to lie about their product`s qualities or attack rival products. This gives them a head start in the market.

Some companies like to use unethical advertising, since they are aware of the consumer’s ignorance. Many consumers have no time to read what is written in the wrapper. They buy based on what they heard over the television or saw in the internet. It is by exploiting this ignorance that makes many companies to lie about their products.

Weak or lack of consumer protection bodies is another reason why many companies resort to such unethical advertising methods. The consumer protection bodies are mandated to protect the consumer against being exploited by unscrupulous companies. With non existence or weak protection bodies, many companies are un- persuaded to use such advertising tactics. Also companies which apply this type of advertising methods manufacture low quality goods. Low quality goods are easily sellable. These factors make it possible to use little misleading advertising to start making sales. The enforcement laws that exist may be ineffective or corruptible. For example, for a multinational company such as Coke or Pepsi operating in a third world country, enforcing advertising laws may be hard. This leeway is exploited by many multinationals which operates overseas.

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