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Bad Business Tactics that Business Owners Should Avoid Malpractices should be avoided by the companies as it results in the loss of credibility, ruins the reputation and also effects on the company's performance

By BusinessEx Staff

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Dicey situations often emerge in businesses leading to dwindling of operations and company revenue. At the time of crisis, a company has to counter the bad effects and shore up the business anyhow. Sometimes, companies drift from ethical codes and stop playing fairly, in turn, start using tricks to increase sales.

The shortcuts and tricks that companies deploy offer short-term results but, in the long run, they cost a lot. A company's reputation and even its future comes at stake if it gets caught doing malpractices to allure customers to increase revenue. Thus, fair play should be practiced in the business ecosystem.

Companies Should Avoid These Bad Business Tactics

For sustaining competition, companies employ various kinds of business strategies. In essence, these business strategies comprise of marketing strategy, branding strategy, sales strategy and so on. There is a common agenda while creating strategies, that is, revenue generation.

The emerging companies should be well-versed with business tactics; though, they should also know which business tactics are good and which are not. The differentiation between good and bad strategies is important to understand as it ultimately affects their rapport with the customers.

1. Misleading the Customers

Offers, discounts and rewards are some of the common things that most companies offer for attracting customers. Even these alluring marketing techniques work very well, but in some cases, the marketing strategies act as a trap too.

If a particular company states to offer discounts or rewards on purchasing its products or availing its services and, later, does not do as promised then the company is totally misleading the customers.

In 2016, QNet, a direct marketing company, was caught fooling its customers. The company had a pyramid structure wherein the members were promised to offer money if they purchase as well as sell the company's products. Later on, the futile marketing scheme got noticed by the Bombay Court and the directors of the company got arrested, as reported by the Indian daily news.

2. The Bad Practice of Planned Obsolescence

Basically, "planned obsolescence' is an industrial term, which means that the durability of a product is artificially decreased so that it gets worn out soon. It is one of the strategies of companies to engage customers and in turn increase revenues. The main idea of planning a product's obsolescence is that once the product wears out, which it does much before time as planned and executed by the company itself, the customers will be coming back to purchase another product, and in this way, the sales will remain in an uptrend.

In December 2018, an investigation was led against iPhone manufacturer Apple by the French government. The probe was launched under allegations of "planned obsolescence" of iPhones. The tech-giant Apple was accused of deliberately slowing down "iPhones through software updates". Later, the company admitted to reducing the efficiency of iPhones and had sworn to ensure transparency in the future, as reported by the international daily news.

Similar cases of these kinds have come up with other companies as well such as HP, Canon and Epson who have been alleged to reduce the life of the cartridges.

3. Promoting the Brand via "Green-washing'

In the effort of gathering attention and increasing sales, there are some companies who deceive customers by claiming its products to be eco-friendly. These claims are not evident through any source or research.

The companies mainly use the "green-washing' technique to promote products, where a word is quickly spread via campaigns and advertisements that a particular product is wholly or partially environment-friendly. Though, such claims are not true as they are not supported by evidence.

In 2015, Volkswagen, an automaker company, massively campaigned in the US that its diesel cars are eco-friendly. Later, the reports emerged that the cars of German automaker Volkswagen had tricked the pollution emission systems and in reality, released pollutants beyond the permissible limit, as reported by the Indian daily news.

Such malpractices should be avoided by the companies as it results in a loss of credibility, ruins the reputation and in many ways affects the company's performance as well. The companies should play fairly and shore up a healthy competition.

This article was originally published by Jaspreet Kaur.

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