Marketing, Ethics and Sky High APR


I recently came across this article in The Guardian. Coca Cola one of the world’s biggest brands and one of the biggest marketing budgets has paid millions of dollars to the Global Energy Balance Network (GEBN) who appear to focus particularly on increasing exercise as the best method to reduce obesity levels, and play down the effect of sugary drinks...such as Coca Cola. As GEBN are a voluntary organisation with a focus on reducing obesity levels in the US this raises some interesting questions about the relationship between marketing and ethics.

This seems to go against previous studies from both Havard and Cambridge Universities which focus on a lack of exercise and an over reliance on addictive fizzy drinks (which naturally make us more slovenly and less inclined to exercise), in increasing obesity levels. Top cardiologist Dr Aseem Malhora has also written extensively about the link between the two. It’s not surprising that some critics are concerned that Coco Cola are using their commercial clout to direct criticism away from the health impacts of their products, rather than look at developing their products for a more health conscious society.

During this week we also came across Smart Pig – the new ‘the genuinely different loans company’. Smart Pig is a new loans company designed for students, set up by students from both Hertfordshire University and Warwick University in protest about how other loans companies work. However ultimately the same marketing techniques apply, this is perhaps particularly highlighted by their advertising on....student beer mats! Just be sure to read the small print (if you can make it out after a couple of happy hour pints down at the SU Bar) ‘typical APR 1130%’ ‘late repayment can cause you serious money problems’. Whist there’s credit where it’s due (pun intended) to Smart Pig for trying to do something different, there’s arguably a concern about hooking young people into the idea of ‘payday’ or short term loans. Ultimately they may come to Smart Pig to borrow that much needed £80 on a tight month and then have to turn to another payday loans company to repay.

Their summer loans package features happy, hippy, carefree young things partying away on a beach somewhere exotic, “have a break from studying and a break from money troubles” they suggest. Within this, there’s some suggestion that students should get into debt for non-essentials rather than offering support with budgeting skills. Here we see how rising rents are pushing students to their limits financially, which goes some way to reinforcing the market conditions Smart Pig have set themselves up to work within. It’s the commercial sectors typical ‘create the problem and then create the solution’ strategy for huge profits. Smart Pig help sell escapism at a time in people’s lives when they are most likely to crave it and least likely to see the long term consequences of it.

Both of these examples raise some interesting questions about marketing and ethics. The role of marketing companies sometimes conflicts between creating the problem and then creating the solution. Just in the way that some marketing companies wouldn't work with two competing banks at the same time, neither could d2 successfully support our clients in the health and social sectors if we were to work with companies who are creating the problem that our clients are trying to resolve.

References:

  1. Harvard University report on sugary drinks
  2. Dr Aseem Malhorta re evidence between obesisty and fizzy drinks
  3. Cambridge University report re carbohydrates and health