However, another view is that most companies value their reputation and would not endanger their goodwill by making false claims.Moreover,action by enforcers like regulatory bodies or private lawsuits by competitors-even if penalties and damages are not ordered-are costly. Investigations by regulatory bodies or private lawsuits can easily exceed the profits derived from deceptive marketing. Such suits distract company execuitives, further increasing the cost of an ad already challenged as deceptive. These costs damage the reputation and goodwill, result in exorbitant legal fees and distract company executives.Therfore such repercussions induce the marketers to carefully review their ad claims and ensure that they are true and fully substantiated.
Anti tobacco campaigns accelerated in the late eighties when litigation exposed a long history of deceit carried out by industry officials regarding their knowledge about the damaging health effects of tobacco use including the deliberate use of new ingredients to enhance the addictive power of cigarettes. This revelation adversely affected the credibility of producers and marketers and brought to light their fallacious claims about the informed and free choice of customers.Likewise, allegations have been leveled against the fast food industry about inadequate disclosures and misleading advertising. Innumerable lawsuits have contended that the fast food marketers do not provide adequate or accurate information about the fat, sugar and the chemical contents of their products. It was also the core point of the argument by Cesar Barber, who filed legal claims challenging McDonalds, Burger King, Wendy's and KFC for his excessive, life threatening weight.(source)
In this context, it will be pertinent to examine the marketing policies of largest beverage company in the world. Coca Cola, a very assertive and uncompromising advertiser. Historically cola has been seen as a harmful product, inextricably linked with obesity and rapid bone loss. Like most FMCG companies, Coca Cola is an aggressive marketer with colossal ad budgets, usually roping in celebrity spokespersons.
The Case of Coca Cola
Another noteworthy aspect is marketing targeted by companies at young impressionable children. Besides conventional advertising, Coca Cola had rolled out ad campaigns aimed at young children. In 1998, Coca Cola came under criticism for its efforts to secure exclusive vending contracts with public schools across America. The promotional campaigns included contests like 'Team up with Coca Cola contest'. The event involved lectures by Coke executives. The company came under fierce criticism for targeting schoolchildren and commercializing school hallways to make them just another place to sell soft drinks. It was also revealed that the Company had promised under funded public schools for the possibility of cash or sporting equipments in exchange of exclusive rights to sell Coke. Such marketing policies of aggressively pursuing the youth as the potential customers seriously undermine and threaten public health. The concern over public health has mobilized a number of groups to hold Coke accountable for its unsavory practices of targeting youth. Opponents of Coke's marketing campaign cite rapidly increasing obesity and diabetes among the US students.
Insecticide contents and Environmental