8 Dirty Business Tactics to Avoid

Walking away from the days of apartheid, South Africa has come a long way by becoming an emerging market that...

  • 8 Dirty Business Tactics to Avoid
    Lethabo Moodley Image Lethabo Moodley

    8 Dirty Business Tactics to Avoid

    Walking away from the days of apartheid, South Africa has come a long way by becoming an emerging market that is bestowed with nature’s bounty. Immensely beautiful and brimming with cultural diversity, the vast country is home to a plethora of wild species which makes travellers intrigued to explore it further. Rich in natural resources, the nation has a highly developed financial and legal sector which has allowed it to become fiscally stable over the years. The economic position of South Africa has improved considerably after the new President Cyril Ramaphosa took charge. According to Moody’s the country’s economic situation improved from negative to stable in 2018. It is estimated by the FocusEconomics panellists that the economy will improve by 1.9% in 2018 and up to 2% in 2019. Also, the President has been successful in gathering investment from foreign lands like the UK to enhance the business sector and create more opportunities. It has been announced that the government will organise an investment conference in the later part of the year to raise nearly R1trillion from investments in the next five years. There is no doubt that the country is progressing and is offering avenues of starting new ventures and creating opportunities for buying existing businesses for sale in South Africa.

    Every entrepreneur wants to witness the flow of money as soon as they start running a business. Sometimes, they contemplate disregarding business ethics and morals to earn big money. However, one thing should be kept in mind that lowering professional standards will never be able to accomplish the desired results. It only brings down the company and maligns its image which is extremely hard to reinstate. One such example of unethical business practice is of the Japanese automotive manufacturer Toyota. In 2010, the globally recognised brand disregarded safety concerns and deferred recalling of its cars with faulty brakes and sticking pedals. Instead, the company added airbags to pacify the concerns of the public and tried to save over $124 million. Eventually, after a few deaths and rollovers, the company decided to recall the vehicles. In 2014, they were penalised in the US and had to pay a massive fine of $1.2 billion for hiding the safety defects. It is ludicrous to fall for such a trick that can cause more damage than profit. Here is a list of some specific dirty business tactics that a smart businessperson should shy away from when planning to buy a franchise for sale in South Africa.

    1. Planned obsolescence

    Also known as built-in obsolescence, it involves designing products with a limited usability lifespan which makes them obsolete after a few years. This scheme is used to reduce the time span of the repeat purchase cycle and cut down on the cost of research and development. In this scenario, the company is aware of the lifespan of the product while the consumer is not. It creates a false impression in the marketplace that the product needs to be replaced with a newer version which is better. However, the downside of this dirty tactic is that the consumers can look through the fraud and decide to buy durable products offered by competitors. An example of planned obsolescence is MP3 Players which had limited memory space, and it was impossible for ordinary people to change their lithium-ion batteries, thus forcing them to upgrade.

    2. Pretend sales

    Often marketers try to lure customers by offering discounts which are available for a limited period of time. These sales are usually a sham as there is no reduction in price and it is only done to make people believe that it is a once in a lifetime opportunity. In reality, it is nothing but deception which makes consumers spend more on goods than required. However, recently, consumers have been able to pick this charade as they have understood that prices were first raised and then reduced to look like a discounted cost.

    3. False reviews

    The Internet has opened up the channels of two-way communication between the buyers and sellers. An essential aspect of this engagement is customer feedback on products which is entered in the form of reviews on various sites such as Google Reviews, Amazon, Yelp, etc. The game has become so big that content management and SEO companies charge a nominal fee to create such fake ratings and reviews online to dupe customers. However, customers are learning their lesson and can quickly make out whether a review is a phony, especially when it talks in a marketing and up-selling manner. Also, a single good review among dozens of bad ones is easy to figure out as fake.

    4. Misleading information

    While advertising about their products, marketers tend to overstate their qualities, and even provide misleading information that may prove harmful to the consumers. The ethical line should not be crossed while promoting the goods and services. For example, Nutella was advertised as a nutritious product for children in the US. Later, it was sued and had to pay $20 to all the customers who bought Nutella thinking that it was healthy.

    5. Defaming the competition

    Another immoral way of promoting a business is to vilify the competition. In 2013, Samsung paid students to post defamatory comments about its arch-rival HTC in Taiwan and write constructively about Samsung as anonymous commentators. It was fined a staggering $340,000 for its unscrupulous method when the truth came out in the open.

    6. Deceptive selling

    Some marketers try to cash in on the popularity of major brands operating in the market. They come up with similar names and logos, only adding a little differentiation to avoid copyright infringement to cheat the consumers. In other cases, some marketers sell knock-offs to earn money riding on the popularity of luxurious brand names. In the US, the high-end brand Gucci sued 89 Chinese websites for selling knock-off merchandise. The sites were moved under Gucci’s control, and had to pay a fine of $100,000.

    7. Spamming

    Contacting a client whom you have found organically through your customer relationship management database is acceptable. However, contacting consumers without their consent is improper. Buying contact lists and adding them to your newsletter email subscribers list is distasteful. It is known as spamming or unsolicited bulk emailing, and it can make you lose out on a number of potential buyers. Refrain from communicating with consumers who are not interested in your services.

    8. Not responding to complaints

    The most serious offence that a marketer can commit is not responding to negative feedback from a customer. The disgruntled consumer can spread the negative comments on social media which can lead to bad word of mouth publicity. A prompt reply and proactive solution can go a long way in cementing the relationship and getting a loyal customer for life.

    End Note

    Owning a business is a dream opportunity that gets realised after a lot of hard work and investment. Thus it is easy to fall prey to dirty marketing tactics to increase the number of buyers and sales in minimum possible time. However, these tricks seldom work in favour of the owner and end up in a fiasco. So if you are planning to set up your own business or wish to buy an existing business for sale in South Africa, make sure you stay miles away from these malpractices.

  • Author Info Lethabo Moodley

    A business expert, Lethabo Moodley is a management consultant who has been working across domains since 2005. His rich experience includes a Masters degree in business administration from the prestigious Gordon Institute of Business Science and Doctor of Business Leadership degree from Unisa Graduate School of Business Leadership. He has been actively working as a consultant with the biggest firms in South Africa and his contribution in the growth of these organisations is considered invaluable. He has saved a lot of small businesses from going bankrupt and has renewed the lost success streak of the big fish in the market. Business2Sell is delighted to have him onboard for his insightful blogs.