Marketing Ethics

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Marketing Ethics Product Safety and Pricing

• Jerry Estenson

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Four Ps of Marketing

• Product
• Pricing
• Promotion
• Placement

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Basic Concept of the Market

• A place where a seller brings a product or
  service and where a buyer is willing to
  exchange something of value for the product or
  service.

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Big Questions

• Who would be interested in buying the good or
  service?
• What price would they be willing to pay?
• How much can they afford?
• How will the price affect other stakeholders
  (distributors, retailers, competitors)
• Who is responsible for the product should harm
  occur?
• Are requirements different if selling in other
  countries?

5
Ethical Perspectives

• A free exchange is Prima Facie (On its face)
  ethically legitimate
• Kantian respect for individual because they are
  seen as capable of pursuing their own interests.

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Issue Occur When

• Exchange was a result of informed or voluntary
  consent
• No Fraud
• No Deception
• No Coercion

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Kant Again

• Were participants treated simply as means to an
  end?
• Are there real benefits from the transaction?
• What other values maybe at stake (societal
  concerns)

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Coercion

• The more an individual needs the product the less
  free they are to decide (addicts or very ill
  people)
• Informed consent
• What about buyers with impaired skills (reading,
  math, life experience)?
• Addition to Affluenza (higher degree of
  consumption will lead to higher degrees of
  happiness)

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Values beyond needs of buyer

• Fairness
• Health
• Justice
• Safety
• There is a market for children

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Product Liability

• First sense
• Who or what caused the problem
• Second sense
• Assignment of blame or fault who is
  responsible?
• Third sense
• Who is accountable? Such as who is responsible
  for paying an elderly persons bills

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Negligence

• Contract only what is promised
• Contractarian view I have duties to what I have
  narrowly and explicitly assumed
• General duty Not to put others at unnecessary or
  avoidable risk
• One does not neglect their duty to exercise
  reasonable care not to harm other people
• Ought not reasonably oblige someone to do what
  they cannot do
• One ought not to harm others

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• One standard liable only for harms they could
  actually foresaw occurring
• Recklessness or even intentional harm are far
  beyond simple negligence
• A higher standard Avoid harm that even if not
  actually thought about they should have thought
  about.
• What would a reasonable person expect an average
  person to know
• Higher your knowledge the greater your obligation

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Product Liability

• Strict Product performance. Therefore
  responsibility is on producers
• Who pays
• Tough luck consumer pays
• Society Socialized insurance
• Manufacturer
• Deep pockets and ability to pass on cost
• compensatory justice Those who caused the harm
  or have benefited from the transaction should
  compensate people harmed
• Guns and Cigarettes

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Caveat Emptor

• You are required only to live up to your end of
  the bargain. Pay the price Deliver the goods
  or services

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Pricing

• A fair price is one that both parties agree to
• What about availability of buyers and sellers?
  If either limited then no market equilibrium
• Knowledge of buyers
• AIDs drugs in Africa
• What about patents?
• What about monopolistic pricing?
• Wal-Mart, COSTCO, Target, Safeway
• What about stair-step pricing in auto industry?
• What about government subsidies?