Ethical Issues in Marketing

1
Ethical Issues in Marketing
2
Pricing Issues

• Predatory pricing
• Vertical price fixing
• Horizontal price fixing
• Comparative price advertising
• Bait-and-switch
• Scanned vs. posted prices

3
Pricing Issues

• Price discrimination
• Inside channel systems
• Business to consumer

4
Pricing Issues

• Price discrimination inside channel systems
• Justifications
• Differences in cost
• Differences in quality
• Changing market conditions
• To meet competition
• Deals must be offered on a proportionately equal
  basis

5
Pricing Issues

• Business to consumer price discrimination
• First degree price discrimination (charging more
  to those who will pay it)
• Auto dealers
• Furniture
• Internet sites?

6
Pricing Issues

• Business to consumer price discrimination
• Second degree price discrimination (charging
  different prices based on the nature of the
  offering)
• Multiple unit pricing
• Price bundling
• Coupons
• Rebates

7
Promotional Issues

• False and misleading advertising
• Creating demand for vice or unwholesome products
• Tobacco?
• Alcohol?
• Fattening foods?
• Pornography or sexually explicit material?
• Intrusive promotions

8
Channel Issues

• Slotting allowances
• Buyback / stocklift / lift-out
• Gray market merchandise
• Diverted merchandise
• Exclusive geographic territories
• Exclusive dealing agreements
• Tying contracts
• Refusal to deal

9
Product Issues

• Products that create harm
• Targeted at disadvantaged groups (e.g., cheap
  wine targeted to alcoholics and homeless people)
• Quality deterioration as a result of a harvesting
  strategy
• Planned obsolescence
• Counterfeit merchandise

10
Ethical Frameworks

• Moral idealism universal rights and obligations
• Utilitarianism the greatest good for the
  greatest number
• Social justice emphasis on fairness and
  equality for all individuals

11
Stakeholders

• Stockholders
• Employees
• Customers
• Distributors
• Suppliers
• Society