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Business Studies in Action: HSC Course 3rd edition
Chapter summaries
Topic 3: Marketing
Chapter 13 Ethical and legal aspects of marketing

The ethical and legal position adopted by a marketing manager is ultimately
determined by individual judgement.

Two marketing strategies that have raised the concerns of many people relate to
the ethics of:
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sponsorship deals
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product placement: the inclusion of advertising into entertainment.
Marketers need to be sensitive to society’s environmental concerns. This can
lead to new marketing opportunities such as green marketing; that is, products
that have minimal environmental impact.

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Other ethical considerations include:
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customer manipulation and persuasion.
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encouragement of materialism.
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security and privacy of databases.
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high advertising costs create higher prices.
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sugging: selling under the guise of a survey.
There are a number of consumer laws that protect the rights of consumers, and
clarify the rights and responsibilities of businesses. The main ones include:
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Sale of Goods Act 1923 (NSW): deals with what must exist for a sales
contract to be legal.
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Fair Trading Act 1998 (NSW): outlines a code of good business conduct.
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Trade Practices Act 1974 (Cth): prohibits various restrictive trade
practices.
Business Studies in Action: HSC Course 3rd ed. Chapman, Norris, Devenish and Merritt. Chapter summary Page 1

The main restrictive trade practices are:
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deceptive and misleading advertising – creating a false impression in an
attempt to influence customers.
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price discrimination – the setting of different prices for a product in
separate markets
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implied conditions – unspoken and/or unwritten terms of a contract. The
two most important implied terms relating to consumer purchases refer to:
o merchantable quality: the product is of a standard a
reasonable person would expect for the price.
o fitness of purpose: the product is suitable for the purpose
for which it is being sold.
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warranties – promise to repair or replace faulty products.
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resale price maintenance – forcing a set price on a retailer.
Business Studies in Action: HSC Course 3rd ed. Chapman, Norris, Devenish and Merritt. Chapter summary Page 2