Ethical Issues in International Marketing - Free Paper Example

Introduction

Old Navy is an apparel multinational company owned by Gap Inc. and is based in San Francisco, California. A class action was brought against Old Navy in the case of Nemykina v. Old Navy, LLC, No.: 2:19-cv-01958 BJR, (W.D. Wash. May. 15, 2020) (Steinberg, 2020). The complainant has claimed that the defendant Old Navy partook in deceptive advertisement with regards to discount. In the year 2016, the plaintiff went through the company website as she wanted to do Christmas shopping (Steinberg, 2020). The prices on the website indicated that the clothes were discounted. As such, she thought the clothes were quite expensive before. Consequently, because she thought she was being given a discount, she bought 21 items (Steinberg, 2020). Her counsel investigated and found ot that the apparel company rarely or never gives out discounts. The false discount made the plaintiff buy more than she buys. The claims against Old Navy were brought by the plaintiff on behalf of other residents, Washington, who purchased their products online at that period (Steinberg, 2020).

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Summary

If found guilty, Old Navy would have used unethical means to market their products. The company might have employed this unethical marketing tool due to the pressure to improve sales during the festive seasons. Such deception selling can have an adverse effect on a company, both financially and reputation. As much as shareholders want more returns from their investment, they would want it created in a legal and ethical because of the repercussions if caught (Friedman, 2018). They were building a brand, and as such, reputations are a pivotal intangible asset of a company. It is critical for every company to have an ethical corporate culture that encompasses all its stakeholders. It is the stakeholders who determine the path the organization should pursue with regards to ethical marketing. There are the first people the marketing manager considers before making any decision. The stakeholders include shareholders, customers, suppliers, workers. They are the individuals who are directly and indirectly affected by the activities of the company. Any ethical marketing decision without considering them can be disastrous to the company. If a company has an ethical organization culture, this will also force employees to abide by it.

It is paramount for an organization to introduce ways of encouraging its employees not to engage in unethical behavior. Most employees engage so that they can reach set targets by their employers. As such, whenever they get an opportunity, they use it. Positive enforcement, like bonuses and recognition, can be used to encourage employees not to engage in unethical conduct. The marketing department and the company as a whole should also be told about the legal consequences of their actions and how they can affect company operations.

Conclusion

In conclusion, the Old Navy brand has been in the market for over twenty, and it has put a lot of resources for the company to be where it is today. It is not worth it for the company to throw out the reputation it has built just to increase its revenue and sales. Without its stakeholders, Old Navy cannot perform efficiently and effectively. The stakeholders of the company, such as customers and suppliers, might abandon the company as no company wants to be associated with negative publicity. To control such damage can take companies many years, and the financial repercussion can lead to the closure of a company. As such, it is primary for all the organization to promote an ethical culture. It will then translate to the company and its stakeholders practicing ethical marketing and not taking advantage of customer naivety.

References

Friedman, D. (2018). 'Dishonest Search Disruption': Taking Deceptive-Pricing Tactics Seriously. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3101964

Steinberg, J. (2020). Old Navy, Gap Fail to Exit Suit over Allegedly Deceptive Pricing. News.bloomberglaw.com. Retrieved 4 September 2020, from
https://news.bloomberglaw.com/product-liability-and-toxics-law/old-navy-gap-fail-to-exit-suit-over-allegedly-deceptive-pricing.