Name: Siu Chun Hei

Student Number: 12121608D

Unethical marketing activity of DR Group Limited

In Hong Kong nowadays, there is no doubt that the beauty-service is the most
controversial industry. DR Group was one of the leading companies in Hong Kong
since 1995, being well-known for its low-priced medical cosmetics service and
product which guarantee customer to reach a satisfactory cosmetic results or body
weight reduction. However, it was shut down five months ago due to a serious
Medical malpractice, which drawn public attention once again about the inappropriate
marketing activity of selling cheap medical cosmetics service. The ethical issue of
this activity will be discussed and analyzed in this paper and suggestions will be given
as well.
According to the the American Marketing Association (AMA), Marketers are
expected to embrace the highest professional ethical norms and the ethical values
implied by our responsibility toward multiple stakeholders. The marketing activities
of DR Group are considered as below ethical standard of business based on AMAs
code of ethics, including Honesty, Responsibility and Respect.
First of all, the value of Honesty and responsibility in AMAs code of ethics
are not fulfilled by this beauty company. According to some news reports of the
malpractice mentioned above, The DR group referred their clients to a doctor for a
intravenous infusions treatment, their blood would be extracted by the doctor and
send it to a stem cell research centre, nourished with a liquid essence for fourteen days
and finally the blood would inject back to the clients by the doctor. Unfortunately, the
treatment that claims can enhance the immune systems has caused one woman died
and three had to stay in hospital. Secretary for Food and Health Ko Wing-man has
pointed out that such treatment is "indubitably a medical procedure" that should be
only held by qualified doctor in a hospital. It clearly shows that the promotions of the
treatment has misled the clients and hide the potential danger.
As states in the Trade Descriptions Ordinance (1981), prohibit false trade
descriptions, false marks and misstatementsrequire information or instruction
relating to goods to be marked or to be include in advertisements, obviously the
clients are the victims of this accident and the DR Group must bare most of the
responsibilities because they are the one who promotes a product with flaw to people.
However, the senior executive of this beauty company claimed that the group merely
plays the role of a middleman and the clients has been asked to sign a disclaimer

Name: Siu Chun Hei

Student Number: 12121608D
declaring their agreement that the services they purchase are health rather than
medical services and they clearly understand the potential danger, so the company
refused to pay compensation to the victims in the beginning. Although DR Group
paid eventually, they do it for moral reasons rather than legal reasons. It reflects that
the group is still avoiding their responsibilities for being dishonest to the clients
It is suggested that the company should obey the AMA's Code of Medical Ethics,
it states that Ethical values and legal principles are usually closely related, but ethical
obligations typically exceed legal duties. If the company can embrace more ethics
value, it is believed that a better brand image can be built.
Apart from honesty and responsibility, DR Group is unable to fulfill the value
of respect. According to President John F. Kennedy (1962), being ethical in
marketing, consumers right have to be fulfilled in the first place, namely right to be
informed, to be heard, to safety and to choose. However, News reports have revealed
that DR Group has a make-over right after the accident happens, the company name
has already changed to DR REBORN and the clients of DR Group are forced to
shift the old contact to DR REBORN or all the service they have paid will be
invalidated, in order words the sales of DR REBORN are threatening the
consumers.
The salespeople are recommended to refer to the Protection of Consumers'
Rights - the Trade Descriptions Ordinance, which clearly states that such practices as
misleading omissions, aggressive commercial practices, bait advertising, bait-andswitch and wrongly accepting payment are illegal. Moreover, the company should
build up a better atmosphere in the company, that is not just pushing their staff to
reach a certain amount of sales, but to encourage them to suit consumers need,
provide a professional service as well as promote the products properly. By providing
suitable training and instructions, a win-win situation between consumers and the
company will be created.
All in all, to become a successful company, DR Group Ltd. or DR REBORN Ltd.
should put the benefit of public as its top concern and always bear in mind the ethical
values mentioned above to ensure its good reputation. We should remember that
business is more than just making money, its about responsibility and public good
(Roddick, 1990).
(786 words)

Name: Siu Chun Hei

Student Number: 12121608D

Reference:
John R. Boatright (2000), Ethics and the conduct of business
Wojciech W. Gasparski (2000), Business Students Focus on Ethics
Marketing Ethics
http://www.marketingpower.com/aboutama/pages/statement%20of%20ethics.aspx
Protection of Consumers' Rights - the Trade Descriptions Ordinance, Chapter 362
http://www.customs.gov.hk/en/whats_new/tdspg/index.html
AMA's Code of Medical Ethics
http://www.ama-assn.org/ama/pub/physician-resources/medical-ethics/code-medicalethics.page?
SingTao Daily DR 2012-10-13
http://www.singtao.com/yesterday/loc/1013ao12.html
MingPao News DR 2012-10-6
http://hk.news.yahoo.com/dr%E9%9B%86%E5%9C
%98%E5%90%91%E7%97%85%E4%BA%BA%E8%87%B4%E6%AD
%89%E5%B0%87%E8%B3%A0%E5%84%9F-120818605.html
SingTao Daily DR 2012-12-25
http://www.singtao.com/yesterday/loc/1225ao07.html