Home > Uncategorized > Value Destruction: The Cost to Companies That Engage in Deceptive Marketing

Value Destruction: The Cost to Companies That Engage in Deceptive Marketing

October 8, 2009

http://knowledge.wharton.upenn.edu/article.cfm?articleid=2350

This article is about a pharmaceutical manufacturer who illegally promoted its pain-killer Bextry as well as three other medications.  This was done by offering doctors speaking fees and subsidized trips to resorts, as well as other benefits. The manufacturer had to pay a settlement of $2.3 billion which was the largest ever levied against a U.S. company.  The outcome of this settlement is hoped to increase the credibility of pharmaceutical firms by making them aware of the penalties, which would in turn increase sales as well as long-term value.

This issue is directly related to what we have recently learned in class because it portrays an overaggressive marketing technique and the potential risk of becoming involved with it.  Deceptive marketing (in this case the advertising segment of marketing) is an ethical issue in which advertisers are tempted to deceive people because frank information is not always the most effective way to sell something.

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Categories: Uncategorized
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