Question

Discuss the types of harmful impact that marketing practices can have on competition.

Answer 1

• The Harmful competition practices are at the time of discounts company increase the original price and then provide discount on it, which fools customers making them feel they are purchasing at lower rate, which is a loss to the consumers.
• Competitors do fake marketing by showing comparative analysis of the competitors product and its own products.A company may go one step further and attempt to compare its product with a competitor's product. An example is when a soda manufacturer uses the results of an independent taste test to show why its brand of cola is more popular than colas produced by competitors. This can result in law suits and severe financial losses.
• Use of celebrities to advertise a product with false commitments and benefits. Top level celebrities are used for ads of fairness creams. These celebrities already have fair and flawless complexion. They are first shown to have dark complexion and after the application of product their skin becomes fair. Such false marketing result in loss of consumer confidence and consumers may shift to the another brand offering similar product.
• When companies have healthy competition between them, they tend to improve their products and services and lower the costs that they pass on to the consumer. This can improve the entire industry over the long run since innovation is encouraged. Companies are forced by competition to get creative and to spend money on research and development to improve their products and services. However, when a competitor spends their money on making misleading advertisements, make attractive but false claims about their products, then your company may also end up investing in the same, rather than investing in innovation. The result is industry-wide damage.
• Social Media is becoming very popular these days. But sometimes ads posted on instagram, facebook, twitter etc have grave errors in them. So, this result loss of customers. So, it better to proof read the ad before posting