Vancouver is the second-worst city in the world if you want to buy a house (1). The median home price of over $600,000 is 9.5 times the average gross annual household income, a multiple that is only exceeded by the Hong Kong housing market. Naturally, the extreme prices are inevitably destined to stabilize and fall once the boom is over. Facts such as that the average price for a detached home in West Vancouver peaked in May last year and has since declined by more than 11% (2) signalize an upcoming stabilization or even recession in the housing market.

Average Prices for Vancouver’s real estate market divisions until December 2011

But a profitable market is not easily given up and some people attempt drastic methods in order to keep the price high: A recent CTV news report showed Chinese women who claimed they were sisters looking for real estate, funded by their parents. As it turned out a few days later, those women were neither sisters nor were they intending a purchase: They were actually two Marketing associates who were assigned by “MAC Marketing” in order to deceive potential Chinese investors into thinking that demand from China is still as high as it had always been. The entire marketing lie backfired and MAC’s CEO Cameron McNeill resigned.

Linking back to my previous blog post about the credibility and honesty in modern marketing, this shows how important it is in nowadays world to be aware of the audience’s possibilities to check everything on credibility. As can be seen in the embedded video above, this bogus was found out after someone revealed the two women’s true identity by checking their LinkedIn profile (4). Such a substantial flaw in detail did cost the CEO his job and further damaged BC’s real estate industry’s reputation (2). When a marketing firm such as MAC Marketing tries to appeal to a target segment, in this case investors from Hong Kong and China, it is essential to keep in mind the risks they are facing. Credible statements that can be supported by facts is an essential foundation to customer loyalty and sustainable marketing relations. In this case, the news spread quickly over to their potential customers in Hong Kong and is likely to have damaged Vancouver’s real estate market’s reputation with an incalculatable financial impact on the market overall (3).

“[…]it will take time, we hope that we can earn back our good reputation and your trust. This situation has been difficult for everyone and as a company, we will learn from this[…]”, says McNeill when confronted with his company’s heavily criticized marketing bogus (3).

Once the trust is broken, it is almost impossible to win it back even if everything that follows is truthful. After all, they may as well just have gotten better at lying.

Sources

1) http://business.financialpost.com/2013/01/22/vancouver-ranked-second-least-affordable-housing-market-in-the-world/?__lsa=e456-918d , retrieved on 22/02/2013

2) http://whispersfromtheedgeoftherainforest.blogspot.ca/2013/02/mac-marketing-scandal-makes-headlines.html , retrieved on 22/02/2013

3) http://www.scmp.com/news/world/article/1155758/bogus-buyers-exposed-scam-boost-property-market-vancouver , retrieved on 22/02/2013

4) https://www.youtube.com/watch?v=Sbfa2xpu9Aw , retrieved on 22/02/2013

When I think of the past classroom discussion about marketing ethics, the most striking memory is about false advertisement on behalf of McDonald’s. In fact, I hear people complaining or making fun of McDonald’s all the time: For example, even though people like Chicken McNuggets, there are a lot of disgusting stories about their manufacturing process and about whether or not they are made out of real chickens at all.

Parts of the chicken used in the production of Chicken McNuggets, according to McDonald’s Canada

Now I stumbled over an interesting reaction by McDonald’s Canada: They answer questions. Not harmless, controlled questions in a staged promotion video, but real questions from real people. Their “Our Food. Your Questions.”-campaign from 2012 invites people on the internet to ask questions publicly and McDonald’s will respond to them. As of January 2013, more than 19,000 questions have been answered, including many of which that are rather uncomfortable for the company such as the ‘McNugget mystery’ (3).

This fresh approach to marketing is necessary in the opinion of Chuck Porter, co-chair of CP+P, who states that “You can’t lie anymore, because there’s the internet” (1). And yes, while the creation of social media, blogs and websites in general provided a great expansion ground for advertisements, it also enhanced discussion and credibility evaluation tools by an infinite amount. When McDonald’s said “100% Beef” in the 1980’s, it was very hard to verify and discuss with people outside the consumers direct social environment. Nowadays one can go online and investigate upon any marketing statement a company makes, leading to increased risks when deciding to exaggerate or make misleading marketing slogans in advertisements.

“Companies cannot hide stuff. If Nike is building their shoes in Southeast Asia in sweatshops, people are going to find out. You really can’t bullshit people anymore…And then you get credit for not trying to fool people.”, (1) says Porter.

In our era of information technology, it will become increasingly harder to trick people into thinking patterns to have them make a purchase. One way that companies like McDonald’s Canada discovered to conquer this problem is to create the asset of honesty in promotion and advertisement, to create an honest and credible interaction between the company and the customer. Of course McDonald’s is still not perfect and many of the answers still seem shady to critics, but this opening of a company who is aware of their many critics is definitely a promising step towards future marketing strategies that incorporate and accept the presence of the Internet’s capabilities.

Sources

1) http://www.marketingmag.ca/news/media-news/porter-tells-ad-week-audience-%E2%80%9Ctransparency-is-the-new-black%E2%80%9D-71038 , retrieved on 05/02/2013

2) http://www.marketingmag.ca/news/marketer-news/marketer-of-the-year-2012-mcdonalds-canada-70067 , retrieved on 04/02/2013

3) http://yourquestions.mcdonalds.ca/questions/8596