Ethical issues in marketingd

Ethical issues in marketingd

• 1.
  Ethical Issues • Deceptiveselling practices- Eg. Paste 100 gms free • Shoddy (Inferior) product Construction • Product Breakdown • Warranties not honoured • Advertisements- Misrepresentation and Exaggeration • Lack of information about the product
• 2.
  Unethical Issues andMarketing  More than 5 lakhs injuries requiring Hospital treatment using toys, nursery equipments and Playground equipments  3 lakhs people injured using workshop equipments  2 lakhs people injured using home furnishing equipments  3 lakhs people injured using construction materials  117 deaths per day due to auto related accidents
• 3.
  In most ofthe cases  government will not take the responsibility  Company will not take the responsibility
• 4.
  Major Issue Businessmen lookat Profit Consumers look at Satisfaction So they buy and sell cheaper and unsafe products
• 5.
  Consumers should insistfor only safer products If no demand for unsafe products- Automatically production of unsafe products stops
• 6.
  ETHICAL PRACTICES INMARKET PLACE Three Theories of ethical duties towards consumers •The Contract Theory •The Due Care Theory •The Social Costs Theory
• 7.
  I. THE CONTRACTTHEORY ( Business Firms’ duties to consumers) “ The relationship between a business firm and its consumers is essentially a contractual relationship and the firms moral duties to the customer are those created by this contractual relationship”
• 8.
  Contractual Responsibilities Firm hasthe responsibility to deliver the goods according to the characteristics Customer has the responsibility to pay the money
• 9.
  According to thisveiw, the duties of the firms to consumers are-------- •Complying with the terms of sales contract •Disclosing the nature of the product •Avoiding misrepresentation •Avoiding the use of undue influence
• 10.
  OTHER DUTIES OFFIRMS TO CONSUMERS •The duty to comply Provide consumers with a product that lives upto those claims expressed by the company. Eg. Winthrop Laboratories marketed a painkiller that it advertised as “Non addictive”. But a patient got addicted and died.
• 11.
  •Reliability Refers to theprobability that the product will function as the consumer is led to expect that it will function •Service Life Refers to the period of time during which the product will function as effectively as the consumer is led to expect it to function
• 12.
  • Maintainability The easewith which the product can be repaired and kept in operating condition. Eg. Whirlpool Corporation. First year– All parts of the appliance found defective in materials or workmanship, Repairs and replacement free of charge including labor Second year- Pay only labor.
• 13.
  • Product Safety Thedegree of risk associated with using a product. Eg. OK Tested. Sometimes reasonable risk expected by buyers----- Container with label: Highly Toxic Danger- Poison Keep away from children
• 14.
  • The dutyof Disclosure The seller who intends to enter into a contract with a customer has a duty to disclose exactly what the customer is buying and what the terms of the sales are
• 15.
  • The dutynot to misrepresent (False Representation) Eg. Writing wool or silk for cotton material Writing regular price on article sold for higher price • The duty not to coerce Getting the consent creating stress, fear or emotions. Eg. Stove and LPG connections.
• 16.
  II DUE CARETHEORY (Business firms duty to consumers) Based on--- Consumers and sellers are not equal. Sellers are knowledgeable and experts Consumers lack knowledge and expertise Caveat emptor is replaced by caveat venditor Eg. Power steering in a vehicle User does not know how it operates.
• 17.
  Due care mustbe taken in- • Design of the product • Choice of reliable materials for the product • Manufacturing process • Quality control tests • Warning • Labelling
• 18.
  Duties • The duty to exercise due care • Design– free from danger • Production- eliminate any defects • Information- Fix labels, notices, instructions.
• 19.
  III Social CostsTheory (Business firms duty to consumers) The view that a manufacturer should pay the costs of any injuries sustained through any defects in the product, even when the manufacturer exercised all due care in the design and manufacturer of the product and has taken all reasonable precautions to warn users of every foreseen danger.