Academic journal article Journal of Applied Management Accounting Research

Green Marketing and Misleading Statements: The Case of Saab in Australia

Academic journal article Journal of Applied Management Accounting Research

Green Marketing and Misleading Statements: The Case of Saab in Australia

Article excerpt

Abstract

This paper is a case study that provides an overview of The Deceptive and Misleading Advertising laws. It focuses on the case brought against GM Holden Ltd (Saab) in Australia in 2008 by the Australian Competition and Consumer Commission (ACCC) and highlights the trip wires that other advertisers must be aware of. It also compares the ACCC's Deceptive and Misleading Advertising Law with United States' Federal Trade Commission's laws on Deceptive and Misleading Advertising and provides insights for practitioners.

Key Words

Green Marketing

Saab

Australian Competition and Consumer Commission (ACCC)

Deceptive and Misleading Advertising Law

United States' Federal Trade

Commission's Laws

Introduction

This study uses the qualitative research technique to analyse Green Marketing claims of a holding company in Australia. More specifically, the paper is a case study that analyses the "misleading claims" charge that was brought in Federal Court in Australia against GM Holden Ltd.1 by the Australian Competition and Consumer Commission (ACCC). It also discusses the implications of misleading advertisements and unfounded claims under the U.S. Federal Trade Commission's Unfair or Deceptive Practices Act and the potential fallouts that a business organisation could suffer from making misleading claims.

In Addition to the ACCC, we also analysed the case of misleading advertisements through the United States' Federal Trade Commission's guidelines for two reasons. First, because of its potential impact on many organisations since the United States serves as a nexus of world commerce. Second, because the Federal Trade Commission (FTC) has a long tradition, if not the longest, in the world of commerce, of regulating the content of commercial free speech, thus indirectly serves as an example for similar in different countries and jurisdictions.

It is hoped that the insights generated from these discussions, in addition to the GM Holden case itself, will serve as "lessons learned" and provide guidance to business organisations. It could also trigger further studies along similar lines of inquiry from other scholars.

The rest of the paper is organised as follows: first, we provide an overview of green marketing and the environmental movement. Secondly, we discuss the charge of deceptive and misleading advertising against GM Holden Ltd (actually Saab, a member of GM Holden Ltd. At that time, was the entity that violated the law) and resolution of the case. Thirdly, we discuss the laws on misleading advertisement in Australia and the United States, and finally conclude the paper by providing some implications of the case and its resolution.

Overview

From the warnings of poplar documentaries such as the "Inconvenient Truth" which was co-produced by a former U.S. vice-president (see Rainier, 2006) and several other scientific reports on global warming or climate change (see Ratnatunga, 2007; Philander, 2008; Shermer, 2006; Oreskes, 2004), the world seems to have finally awoken to the realisation that changes in the climatic conditions may be harbingers of dire future conditions unless remedial actions are taken.

With climate change as a backdrop, many organisations now want to be perceived as environmentally friendly (Zimmer 1994). Being environmentally friendly amongst other things implies a firm's activities leave fewer carbon footprints or are less destructive to the environment.

Green marketing or the claims of being green have become not only trendy in the business world but have also, according many scholars, become a money maker for organisations for several reasons. First, many consumers now buy from organisations that claim to be green because it makes them feel good about themselves. By patronising green organisations, consumers feel that they are taking positive steps to protect the environment (Plonsky et al, 1998).

Furthermore, many consumers feel less guilty about powering their automobiles, equipment and appliances when they believe that the energy used has had no net impact2 on the environment (Hilton, 2001; Ratnatunga and Balachandran, 2009). …

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