The Impact of Misleading Advertisements and Pester Power on Consumers

This essay examines misleading advertisements and pester power, focusing on the ethical responsibilities of businesses, particularly in the context of marketing to children. It utilizes a case study of Clarabel's dolls to illustrate how misleading advertising practices can exploit children's influence (pester power) on their parents' purchasing decisions. The essay explores the role of Australian government regulations, including those enforced by the ACCC and the AANA, in establishing ethical business standards and protecting consumers. It analyzes the impact of such practices on vulnerable communities and discusses the benefits of adhering to codes of conduct, emphasizing the importance of social responsibility, consumer loyalty, and ethical marketing. The analysis highlights the potential psychological and emotional harm caused by misleading advertisements and the importance of businesses upholding ethical principles to maintain a positive relationship with consumers and the community.

Running Head: MISLEADING ADVERTISEMENT
MISLEADING ADVERTISEMENT
Name of the Student:
Name of University:
Author Note:

1MISLEADING ADVERTISEMENT
Code of Conduct or the business ethics is crucial for the business organisation in order to
bring a balance of understanding between the customers and the business corporates. It is
important for the companies to ensure its business ethics and facilitate a positive measure for the
customers in order to enhance sustainability in business. In this regard, marketing child products
is crucial and complex enough for the companies because the target customers are not only
restricted to the children but their parents are also identified as target consumers. In Australia,
the government certainly follows a range of corporate laws that are vital to retain a good
relationship between the customers and the organisations. Based on this understanding, this essay
is going to find out the role of government regulations and the organisational practices that are
responsible to formulate an effective and ethical business practice all over the country. For the
discussion, the essay will take a case study of Clarabel’s pester power marketing that affects the
consumers extensively.
Pester power is considered to be one of the important tool that the current business
organisations are practiced in order to attract the children to buy the products. In this regards,
there are certainly a range of issues that the pester power creates which is highly detrimental to
the consumers. Based on the research of McCartney (2010) it can be seen that kids at a very
young age are easy prey for the business organisations to influence and shape their consumer
habits. As a result of that the decision making the children are highly depended on the pester
power of the company without having an idea about the consequences. Globalisation changes the
business perspective to a great extent where children play a crucial role in the consumer market.
The Pester power instigates the kids to influence the purchasing decision of their parents through
nagging and emotional blackmail. However, the emotional pressure imposed by the children
through Pester power was not a deliberate move rather a spontaneous one where they had zero

2MISLEADING ADVERTISEMENT
knowledge of the detrimental impact of pester power. As a result of that it becomes a problem
for the parents because they do not want to deprive their children by any means. However, they
know the adverse impact of the product. As a result of that a genuine dilemma has been created
where a huge gulf between the decision making and understanding of the situation.
In addition to this, the pester power and the misleading advertisements leave a great deal
of impact on the vulnerable communities and people due to their financial stringencies.
According to accc.gov.au (2019) the falsification and mislead in advertisements pave the way for
an unethical business practice where the image of the company can be damaged extensively.
However, the impact on the vulnerable people is more intensified. Lack of financial ability to
purchase a high price product and then ending up with wasting money feel them cheated. As a
matter of fact, attaching the misleading advertisements with the pester power is devastating for
the parents. McCartney (2010) opined that the parents did not have the money to buy but they
failed to overlook the demands of their kids. An emotional pressure makes the situation
inhospitable that can dismantle the good relationship between the parents and their children. On
the other hand, Taghavi, M.S. and Seyedsalehi (2015) advocated that Pester power and
misleading advertisements have long drawn negative impact on the psychology of the children.
Based on the research, it can be stated that due to lack of understanding about the consequences
and the value of money kids are nagging around their parents. In case of not getting what they
want, it makes the kids to get aggressive and isolated as they feel isolated and unwanted. In
future, this problems can lead to bigger psychological challenges where frustration and isolation
drive them towards depression.
The Australian government tries to reduce the adverse impact of advertisement on the
kids. Henceforth, Australian Competition and Consumer Commission (ACCC) tries to develop a

3MISLEADING ADVERTISEMENT
better and healthy environment where the business companies have to understand their
responsibility towards the society and communities. As far as the argument of accc.gov.au
(2019) is concerned, it can be derived that breach in the business practice through advertisements
and promotion is definitely against the business ethics. Therefore, the ACCC tries to create an
effective measure where the activities of the companies are restricted to a great extent so that the
consumers will get benefitted. The purpose of ACCC is to create an amicable relationship
between the consumers and the business companies so that everyone will get equal benefits.
However, in the case study, the interest of Melanie was definitely being hurt because the
advertisement about Clarable doll was clearly an example of exaggeration that the company
deliberately created in order to influence the kids. In fact, misleading advertisements was also
identified in the promotional practices of Clarable dolls. As in the advertisements, the Clarable
dolls were supposed to eat, walk and talk. However, in reality it was a set of dolls and each
performing one function. This message is also televised for a few seconds which is considered to
be a true example of misleading advertisement. The kids are attracted by the multitasking
Clarable dolls whereas the dolls do not provide the same service. Therefore, it is truly justified
for Melanie to get angry about the advertisement and marketing of the doll.
There are some important aspects regarding the regulation of business that the companies
must follow in terms of developing an effective business practice. The voluntary codes of ACCC
and the AANA codes are highly relevant in this discussion that portrays the responsibility of the
companies in order to do business in Australia. The voluntary codes set specific standards of
conduct so that issues like consumer protection and regulatory burdens will be reduced.
However, the Voluntary Codes are trying to deal with the practice of delivering a sustainable
business practice for the organisations. In response to this, focusing on the Competition and

4MISLEADING ADVERTISEMENT
Consumer Act 2010 is considered to be one of the important aspect that the member companies
have to follow which is based on the voluntary industry self-regulatory framework (Aana.com.au
2014). Proper monitoring and evaluation of the business practices are also included into the
voluntary codes so that all the companies have to follow the ethical business orientation. In this
context, Clarable dolls failed to maintain the standard of its business activities in terms of
misleading the consumers. Moreover, focusing on the pester power is not an ethical business
practice that Clarable dolls company follows because it create an emotional blackmail towards
the parents which is clearly violated the public benefits grounds.
In addition to this, Australian Association of National Advertiser (AANA) is also created
certain regulations that are enabled the business corporates to follow a proper and positive
practice. Social responsibility is also considered to be one of the important aspect that AANA
tries to follow in terms of prevailing the community standards and protecting the healthy
wellbeing of the children. The Code of Practice generates an important aspect representing a
marketing advertisement that must not misled or deceive children (Aana.com.au 2014). In fact,
the pricing of the product should not be portrayed negatively. Keeping the social values in
association with respecting all customers irrespective of ethnicity, religion, gender, sex or
financial preferences. Based on both the ethical principles, it can be argued that it is necessary
for Clarable Dolls Company to adhere those clauses in order to set a positive image towards the
society. The benefits of the Code of Conduct will be seen as strong customer loyalty, enhancing
the company reputation, retain good employees and avoid any kind of legal problems.
It is always being ethical to market children and other vulnerable members of society
because they are also considered to be one of the important segments in market. it is associated
with the Utilitarian principle where the service will encapsulate all the people irrespective of

5MISLEADING ADVERTISEMENT
their class, race, gender or financial status. A moral and ethical consideration related to the
maximum benefits for maximum number of people will be identified as one of the important
aspect that Clarable Dolls Company should follow in order to provide happiness to all the
children without discriminating them on the basis of their financial condition or ethnic
background.
The above discussion is trying to analyse the business activities of Clarable Dolls
Company in reference to analyse its responsibilities towards the society and the local
communities. The business regulations and the code of conduct of the Australian government are
also crucial for the business corporates to establish an effective and sustainable corporate
practice. This essay tries to develop a core understanding of the unethical business activities of
Clarable Dolls Company and its detrimental impact on the market. As a result of that the market
penetration and healthy business practice of Clarable Dolls Company can be damaged
effectively. Therefore, the essay creates a better understanding of the ethics and regulatory
practices prevalent in Australia and its significance in the current business environment for
maintaining a good relationship between consumer and corporate enterprises.

6MISLEADING ADVERTISEMENT
Reference
Aana.com.au 2014. CODE FOR ADVERTISING & MARKETING COMMUNICATIONS TO
CHILDREN. [online] Aana.com.au. Available at:
https://aana.com.au/content/uploads/2014/05/AANA-Code-For-Marketing-Advertising-
Communications-To-Children.pdf [Accessed 4 Aug. 2019].
accc.gov.au 2019. False or misleading claims. [online] Australian Competition and Consumer
Commission. Available at:
https://www.accc.gov.au/consumers/misleading-claims-advertising/false-or-misleading-claims
[Accessed 4 Aug. 2019].
accc.gov.au 2019. Voluntary codes. [online] Australian Competition and Consumer Commission.
Available at: https://www.accc.gov.au/business/industry-codes/voluntary-codes [Accessed 4
Aug. 2019].
McCartney, J. 2010. The problem with pester power. [online] Telegraph.co.uk. Available at:
https://www.telegraph.co.uk/comment/columnists/jennymccartney/8211790/The-problem-with-
pester-power.html [Accessed 4 Aug. 2019].
Taghavi, M.S. and Seyedsalehi, A., 2015. The effect of packaging and brand on children’s and
parents’ purchasing decisions and the moderating role of pester power. British Food
Journal, 117(8), pp.2017-2038.