Types of Harmful Impact Marketing Practices have on Competition and the Associated Problems

Typesof Harmful Impact Marketing Practices have on Competition and theAssociated Problems

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Typesof Harmful Impact Marketing Practices have on Competition and theAssociated Problems

Marketingentails one of the core management functions of a businessorganization. A typical marketing process enables a firm promote andsell its products or services through market research andadvertising, among other promotional tactics. However, certainmarketing strategies bear harmful impact on competition for marketshare (customers, raw materials, and suppliers) among firms within aparticular industry (Armstrong et al., 2014). They are used as a ployto make customers see ones products appear better than those ofcompetitors. The following are a number of harmful marketingstrategies on competition and their associated problems.

First,deceptive marketing is a harmful marketing tactic to competition. Itinvolves the identification and exploitation of competitor’sassociated risks and fears, compromising the impressioncustomershave of the competitor (Katz &amp Shapiro, 1994).The most associated problem with this strategy is that it strengthensones firm and its products at the expense of its competitors itlowers the level of competition among market players.

Second,selective advertising is another adverse marketing approach thatimpact competition. Unlike attack advertising, contrast advertisingentail information on both competing businesses. However, positiveinformation is featured on the former while negative information isfeatured on the latter. Generally, contrasts adverts compare andcontrast one company against another, however, in favour of one firm.Consequently, the process damages the image of competitors in themarket as a great deal of customers would perceive one firm assuperior than the others (Kotler, 2012). Thus the associated problembecomes reduced competition in the market.

Additionally,dumping entails harmful marketing practice. Dumping is a situationwhereby a particular company offer a relatively lower price for itsproduct in a competitive market. A healthy competition among firmsfeatures the setting of even prices for similar products across themarket (Armstrong et al., 2014). However, in the event one firmintentionally sells its product a much lower price, it gains moresales with regard to the law of demand. At the end, the companyacquires a greater market share, creates profitable customerrelationships, and reduces competition from other market players.

Furthermore,price fixing is another adverse impact of marketing practices oncompetition (Katz &amp Shapiro, 1994).It involves two or more companies colluding to determine the pricefor products in a competitive market. This can be achieved throughmerging, a process in which two or more companies combine theiroperations for mutual benefits. The associated problem with pricefixing is the ultimate dismantling of the entire free market.

Moreover,harmful marketing practices result in absorption. This is a situationwhereby one powerful firm literally swallows another competing firmin an effort to avoid direct competition of its absorption by another(Kotler, 2012). Absorption may encompass the purchase of the assetsof a competitor or acquisition of its technology. It is associatedwith acquisition of more market power thus lowering competition.

Finally,gamification is another harmful marketing practice. It refers to amarketing strategy whereby game-playing components (like competitionand scoring) are used to direct client engagement and brandinteraction (Cupman, 2015). It is often applied a primary approach totransform business operations. They are mainly applied in campaignsintended for involving the young generation, who are highlyvulnerable to game-related promotions. The McDonald’s monopoly gameand Nike+ health application are good examples. Its associatedproblem is the creation of strong client relationship with one firmagainst others.

References

Armstrong,G., Adam, S., Denize, S., &amp Kotler, P. (2014). Principlesof marketing.Pearson Australia.

Cupman,J. (2015). Has Gamification Lived Up to the Hype? B2B Marketing,American Marketing Association. Retrieved on May1, 2015, fromhttp://www.marketingpower.com

Katz,M. L., &amp Shapiro, C. (1994). Systems competition and networkeffects. TheJournal of Economic Perspectives,93-115.

Kotler,P. (2012). Kotleron marketing.Simon and Schuster.