The American Marketing Association (AMA) is committed to promoting the highest ethical standards among its members. They are guided by the ethical norms that state that they should not harm. they should foster trust in the marketing system. and they should embrace ethical values (American Marketing Association, 2011). These ethical values include honesty, responsibility, fairness, respect, transparency and citizenship. It is unfortunate though that not all companies honor these guidelines set by AMA. thus, the existence of numerous marketing strategies which are illegal and unethical.
Unfair and illegal marketing practices of corporations are those where it withholds pertinent information or misrepresents information. Example, a bank marketing officer was able to convince a client to apply for a loan because of the low interest rates but later on the client realizes that if he prepays the loan, he will have to pay a prepayment penalty. The information on prepayment penalty was deliberately withheld just to close the transaction. This could be considered an unfair marketing practice by the bank.
One popular legal issue that most manufacturing companies are faced today comes in the light of America’s concern for the environment. The words “biodegradable” or “environmentally friendly” are often seen in the packaging of products nowadays. The Federal Trade Commission and the National Advertising Division (NAD), and the Council of Better Business Bureaus have come up with guidelines regarding the use of the word “biodegradable” as many companies are loosely using the term to promote a better image for their products and to convince the consumers to buy them because they are “environmentally-friendly” (Gekas, Harrold, & Dixon, 2010). The legal issues in the packaging, specifically the labeling of products is one aspect in the marketing strategy which must be considered by organizations.