07 Dec What Ethical or Legal Issues Are Associated with Micromarketing
It may seem too simple to point out that before you can send emails or marketing messages, you need to collect contact information from your customers or prospects. However, the actual process of collecting information is much more complex than it seems, especially if you`re trying to collect it in a manner that complies with the law. Micromarketing is suitable for small businesses or start-ups that don`t have a large customer base or reputation. Two key benefits of this strategy: reduced costs and a deeper connection with customers. Marketing costs money. Whether you want to advertise on TV, newspapers, YouTube, Google or social media sites, an ad pays off. Fees can be high or low, depending on the channel you`re promoting and the customer`s level of interest. In addition, misleading advertising can be extremely costly for companies if they are held legally responsible for this unethical practice. Energy drink giant Red Bull provides an instructive example. In 2014, the brand was sued for about $13 million for claiming that its canned beverage offered consumers better focus and responsiveness in addition to more energy — claims that were not sufficiently supported by research and compelling evidence. Predatory pricing is another unethical policy where companies advertise products at extremely low prices to unfairly beat the competition. These unusually low prices encourage consumers to choose the offer of a particular brand, resulting in a temporary increase in sales for the company, although this does not always lead to an increase in sales. Ethical issues in marketing arise from conflicts and disagreements over certain issues.
Parties involved in marketing transactions have a number of expectations as to what business relationships look like and how different transactions should be conducted. Each marketing concept has its own ethical questions, which we will discuss in this chapter. When you walk into a Starbucks store, you`ll be surprised by the variety of customers. There are people over 40 who buy the drink to meet their friends. The younger population (18-24 years) is more likely to take alcohol and leave. Some busy people will opt for the drive-thru option (ordering drinks in their car) if there is one. Different age groups like different things. Starbucks knows this and tailors its experience to each demographic.
Now that you know what micromarketing is and why it`s important, let`s look at an example: there are various forms of unethical business practices related to pricing products and services. This is a simplified example. But you get the idea. The more specific you are with the offer, the better your chances of winning people`s preferences and making sales. How a company conducts its market research today can have serious ethical implications and affect consumers` lives in ways that have not yet been fully understood. In addition, companies may face a negative public reaction if their market research practices are perceived as unethical. For this reason, you should consider the impact of your marketing strategies from an ethical perspective, especially given the increased social awareness of young audiences. To illustrate what these potential issues are, we took a closer look at the importance of ethics, what you should avoid in your campaigns, and how you can adopt moral principles to your long-term advantage.
If you work with third parties who write your marketing copy or a copy for you, make sure their work is checked for plagiarism. You don`t want to infringe someone else`s copyrighted work when you send your emails or newsletters. Micromarketing aims to narrow down your market so you know exactly who you can target and market your products more effectively. If micromarketing is done right, it will cost the company a small marketing fee with high returns. How is micromarketing different from niche marketing? One of the most serious ethical considerations in market research is invasion of privacy. Companies have an unprecedented ability to collect, store, and match customer information that may violate an individual`s right to privacy. In many cases, the customer does not know or understand the extent of the company`s infiltration into their life. The company uses this information to reach the customer with targeted advertising, but the targeting process can have a chilling effect on personal freedom. Recent laws such as the EU`s GDPR have increased penalties and fines for data breaches. Similarly, California has passed a new law that also provides better protection for resident consumers. Meeting the exact needs of customers or solving a problem refers to what aspect of micromarketing? As a marketer, you can be wary of legal pitfalls, but by keeping issues of privacy and confidentiality, intellectual property, and consumer protection laws and regulations at the forefront, you can ensure you don`t get into trouble. You own a coffee shop and want to attract more customers to your store.
You decide to launch a small advertising campaign on Facebook. Who should you target with your ad? If you target everyone in the country, you can go bankrupt in a week, as many people who see your ads are too far away to visit your store. Now, if you limit the display of the ad to people within 1 mile of you, there`s a good chance that more people will appear. They are close to them. They sell great coffee. Why not? If you neglect this fact and store data with a cloud storage provider in another jurisdiction that offers inadequate protection, you may be violating your local laws. An easy way to protect your customers` privacy when collecting information is to use security mechanisms such as SSL. SSL means that the connection between your website and the user`s browser is secured during data transmission. Make sure SSL is enabled on all websites you use with your customers. Like any other marketing strategy, micromarketing has both advantages and disadvantages. The main benefits of micromarketing include low cost and more robust connections, while its limitations lie in customer acquisition and scale limitations.
Registering a trademark gives you the exclusive right to use one or more particular words, names, designs or logos in connection with specific goods or services. It is valid for 10 years and can be extended if certain conditions are met. While all companies compete for consumer preference and loyalty over competing brands, it is unethical to advertise in a way that highlights the negative aspects of a competitor`s offering. Often referred to as a “smear tactic,” this negative ad aims to discredit a competitor`s image in order to boost its own reputation with consumers. interacts with the market, but they usually also connect internally However, there are important legal issues that you should be aware of before contacting customers or potential customers. The three main areas of law you need to consider are privacy and data collection, intellectual property issues, and the rules and regulations of the FTC and other consumer protection agencies. You can see that they list a number of different types of intellectual property (names, graphics, logos, etc.) and they also claim that they do not own any third party names, trademarks, or service marks that may appear on their website. If you work with other organizations or use QA marks on your marketing materials, it may also be helpful to address this point in your clause. Micromarketing has many advantages. Among the most important are reducing marketing costs and tailoring offers to the exact needs of the audience.