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Individual Assignment on Marketing Ethics - California Fitness

Essay by   •  April 4, 2017  •  Research Paper  •  782 Words (4 Pages)  •  1,180 Views

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Individual Assignment on Marketing Ethics - California Fitness

Introduction

Marketing ethics has been defined by Murphy (2006) as having to do with the “right and fair practices.” Harm to consumers and other stakeholders may occur if company violate business ethics for getting higher profit (Smith 2010). In this essay, the ethicality of California Fitness’s marketing activity will be discussed.  

Background

California Fitness founded in 1996 was one of the most famous gym and fitness center in East Asia (Wong, 2013). Although it was the second largest gym operator in Hong Kong, there are many unethical actions. Firstly, the staff lied to buyers about the refund system in order to attain higher sales turnover (Chu, 2015). Secondly, the fitness trainers threaten and forced customers to purchase the training programs. Thirdly, they did not adhere the applicable laws and regulations by using coercion. According to American Marketing Association (AMA) Code of Ethics, these activities breach the standard of professional ethical norms and values, including Honesty, Fairness and Responsibility.

Honesty

In terms of “Honesty”, California Fitness failed to be forthright and truthful. Chonko & Hunt (1985) identified the major marketing ethical problems: dishonest advertising and cheating customers. The center’s staff lied to customers and delivered the misleading message that they could get full refunds if they felt disappointed with the training programs (Chu, 2015). The clients were manipulated to buy services they do not satisfy. As stated in Canadian Marketing Association (CMA) code of Ethics & Standards of Practice (1967), marketers must not knowingly make a description to a consumer that is false or misleading. The promoter has an obligation to appropriately inform buyers about the product or service to be exchanged, therefore the customers’ final decision will be made clearly and freely (O’Boyle et al., 1992). As one of the most famous fitness chains in Hong Kong, California Fitness should not fail to achieve the claimed benefits and the marketing communications must be honest, comprehensive and truthful.

Fairness

Regarding to “Fairness”, California Fitness failed to avoid the high-pressure selling, false and deceptive promotion. The fitness trainers deployed the misleading sales practices to intimidate and press the new customers to sign the membership agreement and purchase the personal training courses with unreasonable price (Sun,2016). According to the Hong Kong Consumer Council, the most common sales style of California Fitness was to tempt pedestrians by lucky draw and hard sell continuously for almost three hours. Also, it was accused to force a mentally disabled person to join classes and charged him HKD700,000 (Ngo, 2015). This showed the protection for customers from unscrupulous marketing practices is insufficient. Although the gym staff were under high pressure to promote the fitness packages, they should not be deceptive. Inversely, they should reject the high-pressure manipulations and misleading sales strategies.

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