Ethics of consumer production & marketing
Ethics in MarketingBy Prof. Sugato TripathyThe Competitive
EnvironmentInteractive process that occurs in the marketplace
among:Marketers of directly competitive products (Mobile phone,
laptops) Marketers of products that can be substituted for one
another (Food industry, Apparels)Marketers competing for the
consumers purchasing power (A customer has limited amount of
money)2Levels of CompetitionMaaza/SliceTheme
parkMinuteMaidCoffeeDietCokeDietPepsiDiet-Mnt DewBottled
waterSprite/7UPPepsi/Thums UpBeersJuicesWineFast foodTeaVideo
rentalsIcecreamProduct form competition: Diet colasProduct category
competition: Soft drinksGeneric competition: BeveragesBudget
competition: Food and entertainment3ConsumerismThe concept that an
ever-expanding consumption of goods is advantageous to the
economy
A modern movement for the protection of the consumer against
useless, inferior, or dangerous products, misleading advertising,
unfair pricing, etc.4
Buyers have the right to:not buy a product offered for
sale.expect the product to be safe.expect the product to perform as
claimed.be well informed about important aspects of the product.be
protected against questionable products and marketing
practices.influence products and marketing practices in ways that
will improve their quality of life.
ConsumerismDuty of disclosureDuty not to misrepresentDuty not to
coerceDuty to exercise due care (caveat emptor/caveat vendor)
Caveat Emptor: the principle that a person who buys something is
responsible for making sure that it is in good condition, works
properly, etc.
Caveat Vendor : Tacit warning to the sellers that, unless they
expressly disclaim any responsibility, they will be held liable if
the sold items are found defective in any way or vary from the
specifications
Duty to complyReliability of goods and servicesService
lifeMaintainability of the product (to keep the goods in operating
condition)Product safety
Contract view of Business duties to consumers
GMO Wheat?GMO Genetically Modified OrganismGenetically modified
wheat is wheat that has been genetically engineered by the direct
manipulation of its genome using biotechnology.Monsanto (Oregon)
was the company which developed this.
Resistant to insectsTolerance to heat, drought and salinityHigh
content of glutenin to aid bakersImproved nutrition (high protein
content, dietary fiber)High yieldNo proven health hazardsField
trails have taken place in USA and Europe
Still no GMO wheat has been approved for cultivation anywhere in
the world. Why??
For USA, natural wheat is a highly exported commodity. No demand
for GM product else where in the worldCultural IssuesGMO Wheat
Ethics in Product StrategyProduct quality, planned obsolescence
and packaging raise ethical issuesExample: Packaging strategy
Larger packages are more noticeable on the shelfQuality imagery
Oddly sized packages make price comparison difficultBottles with
concave bottoms appear to have more liquid in them than they do
19Planned ObsolescenceRefers to:
Products needing replacement before they should because they are
obsolete. (computers and software)
Producers who change consumer concepts of acceptable styles.
(clothing and fashion)
Intentionally holding back attractive or advanced functional
features, and introducing them later to make the old model
obsolete. (electronics)
Ethics in PromotionBait and Switch Advertising Bait and switch
advertising is when a company offers consumers an appealing deal
and then changes the deal when consumers make direct inquiries.
Ex?Car dealers, Limited period offer (free items), finance schemes,
original prod.not displayedFalse and Deceptive Advertising Fair and
Handsome, Revital, Perk Energy barPromotional
Allowance?Bribery?Creating demand for unwholesome products
(tobacco, alcohol, fattening foods)
21IncludesPoorly made productsProducts that do not perform
wellProducts that deliver little benefit Harmful products (cause
bodily harm, illness, even death)
How it happensUndue focus on profit, increased production
complexity, poorly trained labor, and poor quality controlNew
products without safety track recordsOutsourcing of production
often leads to quality issues
Shoddy or Unsafe ProductsHigh-Pressure SellingSalespeople are
trained to deliver smooth, glib talks to entice
purchaseHigh-pressure selling persuades people to buy goods they
neither need nor wantDriven by compensation structures (i.e. high
bonus potentials)High-pressure selling ultimately destroys customer
relationships and goodwillMcDonalds and Obesity A 2002 lawsuit
unsuccessfully sued McDonalds on behalf of obese children, claiming
McDs marketed food that is high in fat, salt, sugar, and
cholesterol.
Ethics in PricingPrice FixingPrice DiscriminationA pricing
strategy that charges customers different prices for the same
product or serviceDeceptive PricingDeceptive pricing occurs when a
retailer uses a pricing gimmick to make customers believe they are
getting a bargain when they are notHigh PricingVariable costs
included in the final price
Exclusive distributionDumpingPredatory competition
Ethics in Distribution
