Chapter 6 Marketing and Operations Business Ethics

  1. Lakeside Case Study:

    What are the relevant facts of the case?
    an individual just inherited a small bit of money from a distant relative and wants to buy a vacation home. As he starts to look at a vacation house that is away from the hustle of daily life. He finds a lake where is looking at the local market to assess whether not he is able to afford a vacation home. Lakefront homes in the area are above his budget. He notices that most of the homes in his price range were not up to his likings; he was contemplating whether or not to up the budget were he may be able to find a home that was suitable. As he continue to evaluate homes in the area, he drove pass a for sale sign by owner. He decided to go see the place. 

    The for sale by owner was there to greet him nd welcomed him ih for a glass of milk and cookies. The man begun to explain that he need to the sale the home fast, because he wanted to move to help his daughter out. He mentioned to the potential buyer that he was selling the house for 175k, which the buyer was hestiatant and confused. The house was well more worth what the seller was trying to sell it for. The buyer thought there was something wrong with the house, but knew he could put together and contingency agreement to cover himself. Then he thought the seller hadn't realize that the house was a lot more than he was asking
  2. Lakeside Case study:

    How would you describe the sophistication/expertise of the buyer?
    The buyer had done his homework and had surveyed the area to price the real estate in that market. He knew how much the homes were going for and that he could potentially protect himself if there were anything wrong with the house
  3. Lakeside case study:

    How about the seller?
    The seller it was hard to tell the sophistication level. Could not really assess the real situation for the seller to want to sell the home for below market price. He could have been intelligent enough to know that if he were to sell the home with an agent, that the fees would take most of the profit away. Seems like it was price to sell.
  4. Lakeside Case Study:

    In your view, does the buyer have an obligation to disclose that the asking price is too low? If not, what obligation does the buyer have? Would your answer change if:

    –the little old lady was wealthy?
    –the little old lady was accompanied by her college educated son?
    –the little old lady was a retired real estate broker?
    –the little old lady revealed that she was suffering from dementia and was estranged from her family?

    –the buyer was also a little old lady?
    No he would not have to disclose that the asking price is too low. He should ask how did he come up with the asking price would be a better approach. The buyer has a moral obligation to not take advantage of the person if  they were unable to conduct themselves or wasn't cognizant
  5. Lakeside Case Study:

    What ethical principles that we have discussed in this class are at issue in this case?
    The ethical issues here are character traits. Whether we believe either party is telling the whole story or not. 

    Seller: Should not violate the buyers right by not disclosing any potiential problems on the priority

  6. Discussion of marketing with and without ethics (p. 166)
    There are many different ways to understand marketing and its associate images. We an easily imagine or remember how infidels approach marketing without ethics: 

    Marketing without Ethics

    1. My job is to be focused on the customer when it has a clear direct pay off for my organization 

    2. Marketing has its own standards and makes as much money as possible of the organization. 

    3. Everyone else in my industry markets product like this. Why shouldn't I?

    Marketing with Ethics:

    1. Are you serious about your value proposition and do you use it to shape your brand and the value you deliver to customers?

    2. What does your marketing say about the kind of firm you are and what you are committed to?

    3. Do you consider core stakeholders when you develop marketing campaigns and take steps to ensure that your operations respect not only the law but also basic moral standards
  7. Targeted marketing and profiling (p. 167)
    Profiling: The process of seeking the information and the methods they employ to gather the information

    Target: If the specific good or service is seen as particularly important or an entitlement excluding some pars of the market, or giving differential levels of service and price to different market segments, may be viewed as discriminatory and unfair.
  8. Special issues related to marketing to children (p. 168)
    Marketing products to children's has been an area of huge growth for companies, but also highly controversial. Many of the campaigns _ junk food, tobacco, and violent video games- were designed to appeal to children and teenagers and encourage them to embrace these products that many perceive as inappropriate for your people. 
  9. Pricing (what is a fair price for an AIDS drug)?
    A fair price for an AIDS drug would depend on where the patent is in its life span. If it is out of patent, than the market will determine the fair price of the drug. If not, then the makers should make it available to those who cannot afford by discounting the drug on a affordability situation.
  10. Discussion of operations with and without ethics (p. 172)
    Operations is the process by which firms create and deliver values to their customers; whereas marketing works to match the customer and the product, operations steps in to deliver on marketing's promise

    Operations without ethics:

    1. Employees are treated like cogs in the wheel or cost centers similar to the machinery in the plant

    2. Suppliers need to be held at arm's length and treated like potential competitors in a struggle for power

    3. In order to meet production targets, operations 
    uses any means necessary

    Operations with Ethics:

    1. Are employees a critical asset I have to invest in to create quality and outstanding customer service?

    2. Are suppliers considered stakeholders with whom a company should develop a close and ongoing relationship in order to deliver outstanding value  to the customer?

    3. Are shared goals and values, turrets, and shared responsibility among supply chain members important to the firm's operations?

  11. Privacy concerns (p. 175)
    First, some internet companies use spyware, a program that resides on a given we sit and can be downloaded on the computer of a given visitor 

    second, a variety of stockholders are putting pressure on firms to track specific kinds of information

    Third, Firms need to continually update their measurement system to be sure they are measuring the right things to satisfy their customers and their other key stakeholders.
  12. Issues with supply chain management (pp. 179-181)
    Issue: Managers face fundamental questions about their relationship to these stakeholders similar to this face with employees: Are you able to work with them to create the value? Do they share values and norms of your firm? Are they considered competitors?

    There are some special challenges facing managers that illustrate the complexity of meeting their responsibilities to stakeholders and managing relationships within the supply chain:

    1. Responsibility for international labor issues: The Shift of operations to overseas factories where labor is significantly less expensive has raised the issue of fair wages and working conditions

    • 2. Responsibility when things beak down: 
  13. Discussion of Fingerhut case (pp. 186-201):–Case facts: what is Jane Johnson concerned about?

    –What was the Fingerhut target market?

    -What are the ethical concerns in serving this market?
    Jane Johnson was concerned about the reputation of the firm. 

    fingerhuts targeted market was low income groups that didn't have access to credit. 

    The ethical concerns were if the people were unfairly targeted and being charged very high interest rates knowing that chances of default was high.
  14. Discussion of Fingerhut case (cont.):

    –What was the company’s marketing approach?

    –What was “the database” and why was it important?

    –Describe the company’s pricing strategies.–Who did the company compete with?

    –Describe the NAACP case and the company’s response.

    –Describe the alternatives to traditional credit listed in the case.

    –What do you think the company should do? Why?
    1.The company's marketing approached focused on low and moderate income consumer. Used installment payments with low payments

    2. The database consisted of detailed information about each customer that would allow fingerhut to market their products accordingly to what each customer lifestyle was. It was very important to the firm. It allow them to build organizational value

    3. The NAACP case was design to hold Fingerhut accountable for unfairly targeting minorities and charging them unfair interest rates

    4. Alternatives to traditional credit

    Pawnshops, leasebacks, secured credit cards, payday and tax refund anticipation loans, and rent to own

    5. I think the company should inform the consumer of what they are buying and how the credit structure is setup. The possible situations that they could put themselves in (consumer).

    Why: Because, I believed if most consumers were informed about the dangers of over leveraging themselves, that they will make more inform decisions. They should look at disposable incomes more than just the credit.
  15. What are the key facts in the article in terms of what Coke did?

    What do you think were the factors leading to the actions of the Coke manager?

    Do you think this situation is an outlier or is it common?
    > a rigged marketing test. 

    > Burger King found out about the incident

    • > The Key facts about the case: 
    • Coke decided to work with Burger King to promote their Frozen Coke Drink

    > They decided to promote the product through the purchase of a value meal and a free frozen coke

    > When sells weren't up to par, Coke gave a man $10k to take hundreds of Kids to buy value meals

    > Burger King found out about the Incident and sued Coke

    > Lagging Carbonated drink sales were hurting Coke.

    > The partnership was reconciled

    2. The factors that lead Coke manager to rigged the marketing test was  monetary incentives to do well. Meet quotas and to launch a success product campaign 

    3. I think this situation is probably common practice, especially, at the coke company. I can't go to a restaurant without having to order a coke. I think they promote these contracts to eliminate competition. These unethical lapses are probably more common than we would like to believe.
Card Set
Chapter 6 Marketing and Operations Business Ethics
midterm business ethics