lowest price product, business and finance homework help

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Respond to the following questions in your own words. Your responses should include specific examples and should incorporate concepts and terms from Chapters 8 and 9 in your textbook.

  1. Does the desire to buy the lowest price product ever create any ethical dilemmas for a consumer? Why or why not?
  2. Explain how and when a consumer might be considered "vulnerable" to advertisers. Should the ethics of marketing to the vulnerable be considered in allowing advertisements? Why or why not?
  3. In a local or national newspaper, find an article about a topic related to business ethics. Read the article. Then, write 3–5 paragraphs that answer one of the following questions:

Explain what the article is about. Discuss how the company described in the article developed a "cutting edge" marketing campaign. Is there any part of this campaign that you would consider deceptive or unfair to any consumers? If so, how? How might such an advertising campaign be changed going forward to alleviate some of your concerns?


Writing Requirements:

  • APA format
  • 3–4 pages in length (excluding cover page, abstract, and reference list)
  • Use the APA template located in the Course Information folder to complete the assignment.

Unformatted Attachment Preview

CHAPTER EIGHT: MARKETING ETHICS: PRODUCT SAFETY AND PRICING AN INTRODUCTION TO BUSINESS ETHICS Copyright © 2014 by McGraw-Hill Education. All rights reserved. THIS CHAPTER SEEKS TO       Introduce a range of ethical issues that arise in marketing Provide an ethical framework for evaluating marketing ethics Explain the ethical dimensions of products liability law ranging from caveat emptor to strict products liability Examine the ethical issues surrounding the concept of negligence Provide an ethical analysis of strict products liability Examine some ethical issues involved in product pricing Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-2 DISCUSSION CASE: LIFE-CYCLE RESPONSIBILITY FOR PRODUCTS    Products liability law in the United States has long held a business liable for harms caused by its products if those harms were foreseeable and avoidable The concept of life-cycle responsibility holds that business can be held responsible for the entire life cycle of a product Some European countries have imposed “take back” regulations that require a business to take a product back from a consumer at the end of the product’s life for recycle, reuse, or responsible disposal Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-3 DISCUSSION CASE: LIFE-CYCLE RESPONSIBILITY FOR PRODUCTS (CONT.)   Defenders of life-cycle responsibility believe it will provide an incentive for manufacturers to design products that are more easily recycled or reused, are less toxic, and last longer Some critics raise practical problems with this approach, including: some durable products and components have a lifecycle that could easily outlast the existence of a manufacturer; and requiring individual manufacturing firms to take-back dangerous products might actually increase risk as these products are spread widely rather than collected in a centralized location Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-4 DISCUSSION CASE: LIFE CYCLE RESPONSIBILITY FOR PRODUCTS (CONT.)  Electronic product concerns  Product liability laws and approaches Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-5 MARKETING AND ETHICS The essence of marketing is product, pricing, promotion and placement (the 4 Ps) - Before a product is created, the question is who will buy it. - Once created, the product must be priced so that people will buy it. - Once priced, the producers must consider under what conditions the product will be sold Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-6 ETHICAL ISSUES IN MARKETING A single exchange between two individuals is prima facie ethically legitimate. - Kantians: Upholding respect for individuals by treating them as autonomous agents - Utilitarians: Agreement is evidence that happiness is increased Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-7 ETHICAL ISSUES IN MARKETING In general it is useful to keep three concerns in mind regarding Marketing: 1. To what degree are the participants respected as free and autonomous? 2. To what degree does the transaction provide actual benefits? 3. What other values might be at stake in the transaction? Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-8 ETHICAL ISSUES IN MARKETING  How do you determine when someone is treated with respect?  Free Consent Practices aimed at children and the elderly raise questions of voluntariness.  Informed Consent The complexity of many consumer products and services can mean that consumers may not understand fully what they are purchasing. Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-9 ETHICAL ISSUES IN MARKETING  How do we understand the benefits accrued by consumers?  Impulse buying  Bankruptcies  Affluenza Simple customer satisfaction is not a conclusive measure of the benefits of market exchange. Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-10 ETHICAL ISSUES IN MARKETING  What values exist other than those served in the marketing exchange?  Fairness  Justice  Health  Safety Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-11 ETHICAL ISSUES IN MARKETING  What are the true costs of production? Externalities show that even if both parties to the exchange receive actual benefits from the exchange, other parties external to the exchange might be adversely affected. Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-12 ETHICAL ISSUES IN MARKETING  Market Exchange is prima facie ethically legitimate because of:    Respect for the autonomy/freedom of individuals Mutual benefit for each party to the exchange But, this ethical judgment is conditional because:     The transaction must be truly voluntary Informed consent of each party is needed Benefits might not occur Other values might conflict Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-13 ETHICAL ISSUES IN MARKETING  The preceding 4 conditions therefore imply the following questions, each of which requires considering several factors: 1. Is exchange “voluntary”? 2. Is consent to exchange really “informed”? 3. Are people truly benefited? 4. Do competing values over-ride? Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-14 FROM CAVEAT EMPTOR TO NEGLIGENCE  Three senses of responsibility  Who or what caused something to happen?  To whom should we assign blame?  Who is accountable? Negligence  Strict Product Liability  Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-15 FROM CAVEAT EMPTOR TO NEGLIGENCE Caveat emptor understands marketing as a simple exchange between a buyer and a seller… …every purchase is assumed to involve the informed consent of the buyer and is assumed to be ethically legitimate. Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-16 FROM CAVEAT EMPTOR TO NEGLIGENCE  What are the problems with this approach?  Adequate understanding  Implicit promise of safety  Limited or expressed warranties Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-17 FROM CAVEAT EMPTOR TO NEGLIGENCE  Negligence, a concept from tort law, provides a second avenue of defense for consumers.  Ethical Duty  Ethical Neglect  Involves the ability to foresee the consequences of our actions and failing to take steps to avoid the likely consequences. Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-18 FROM CAVEAT EMPTOR TO NEGLIGENCE  The Reasonable Person Standard “A reasonable person does what we could expect the ordinary, average person to do.” - Assumes thoughtfulness - Assumes judicious decision-making - May assume more of the average person than they are capable of Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-19 STRICT PRODUCTS LIABILITY  Focuses not on the actions of the people involved but on the performance of the product  Some harms occur in ways that can only be described as an accident; neither the producer nor the consumer acts negligently, but the consumer is injured nonetheless  In the absence of fault, the strict products liability standard assigns this responsibility to producers Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-20 STRICT PRODUCTS LIABILITY  Three options  The consumer can be made accountable for their own harms (tough luck standard)  Hold society in general accountable for the harms suffered by the consumer  Hold the producer accountable for harms suffered by the consumer Are these arguments persuasive? Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-21 STRICT PRODUCTS LIABILITY  John McCall:  Strict liability is no more unfair than it would be to hold the injured consumers accountable Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-22 STRICT PRODUCTS LIABILITY  Fairness refers to externalities that arise.  Injured consumers have not voluntarily accepted the injury as part of the cost of the product they are purchasing  The injuries should be paid by those who are benefiting from the exchange, other users of the product and stockholders –McCall Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-23 STRICT PRODUCTS LIABILITY  Strict liability standard does not entail that producers are accountable for every injury caused by their products  Some products are inherently dangerous and might reasonable be expected to cause injury Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-24 ETHICS AND PRICING A fair price is a price that both parties to an exchange agree upon… …but a product’s price also affects third parties, thus… …fairness and equal opportunity are relevant to pricing ethics Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-25 ETHICS AND PRICING  Informed consent can be missing in some pricing situations - Price gouging - Monopolistic pricing - Price fixing Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-26 ETHICS AND PRICING  Price gouging occurs when the buyer has few purchase options for a needed product and the seller uses this situation to raise prices significantly.  Energy companies  Gasoline stations and 9/11 Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-27 ETHICS AND PRICING  Monopolistic pricing and price-fixing are similar  Either individual companies or a group of conspiring companies use their market power to force consumers to pay a higher price than they would have if there were real competition in the marketplace  Microsoft and Windows Operating System  Prescription Drugs  Credit Card Interest Rates Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-28 ETHICS AND PRICING  Could consumers ever be benefited from higher prices than they could otherwise pay?  Wal-Mart and small communities The economic model that suggests that individuals are better off whenever they pay lower prices may be too simplistic. Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-29 ETHICS AND PRICING  Predatory pricing occurs when a product is temporarily priced below the actual costs as a means of driving competitors out of business.  The price of economic efficiency may involve social and political “costs” to the wider community. Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-30 ETHICS AND PRICING  Lessons to be learned  Do not assign blame or praise  The lowest, mutually acceptable price alone is insufficient for determining legitimate pricing policies  The economic system is part of a much larger social and political system; when there are social costs involved in a transaction, then costs not reflected in the price agreed upon make the price unfair Copyright © 2014 by McGraw-Hill Education. All rights reserved. 8-31 CHAPTER NINE: MARKETING ETHICS: ADVERTISING AND TARGET MARKETING AN INTRODUCTION TO BUSINESS ETHICS Copyright © 2014 by McGraw-Hill Education. All rights reserved. THIS CHAPTER SEEKS TO Examine the ethics of manipulation and deception in marketing and sales  Explain and examine the regulatory standards governing advertising  Examine the arguments concerning marketing that violates consumer autonomy  Explore the ethics of target marketing  Analyze the ethics of marketing to vulnerable people and populations  Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-2 DISCUSSION CASE: PREDATORY LENDING: SUBPRIME MORTGAGES AND CREDIT CARDS  Subprime lending involves loans that are riskier than traditional loans  Subprime loans are risky because they carry a higher probability of default  Consumers with low credit ratings have fewer financial choices and particularly vulnerable to exploitation Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-3 DISCUSSION CASE: PREDATORY LENDING: SUBPRIME MORTGAGES AND CREDIT CARDS  When lenders knowingly withhold information and mislead or deceive borrowers, predatory lending crosses the line and becomes fraud Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-4 DISCUSSION CASE: PREDATORY LENDING: SUBPRIME MORTGAGES AND CREDIT CARDS  Adjustable rate mortgages (ARMs) were one means that lenders used to entice borrowers.  ARMs are almost a certain bet to require higher payments in the future Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-5 DISCUSSION CASE: PREDATORY LENDING: SUBPRIME MORTGAGES AND CREDIT CARDS  Are there any ethical issues involved in marketing credit cards to college students? Are college students particularly vulnerable to credit card marketing? Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-6 ETHICS OF SALES  The goal of all marketing is the sale.  A major element of marketing is sales promotion – the attempt to influence the buyer to complete a purchase.  Target marketing  Marketing research Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-7 ETHICS OF SALES Market exchanges that respect individual autonomy and individual liberty are ethically responsible practices  Market exchanges that violate autonomy are unethical practices  Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-8 ETHICS OF SALES  Means for influencing others that respect autonomy  Persuading  Asking  Informing  Advising Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-9 ETHICS OF SALES  Means for influencing others that violate autonomy  Threats  Coercion  Deception  Manipulation  Lying Think about what happens in auto sales. Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-10 ETHICS OF SALES  Manipulation means to guide or direct someone or something’s behavior…total control need not be involved  Implies  working behind the scenes Deception means to manipulate through false or misleading information  Implies understanding what motivates emotionally Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-11 ETHICS OF SALES Do I manipulate someone when I appeal to their motivations?  What are the boundaries of manipulation?  When and under what circumstances is manipulation unethical?  What is the difference between persuasion and manipulation?  Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-12 ETHICS OF SALES Kantians: When I manipulate someone I treat him or her as a means to an end I want Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-13 ETHICS OF SALES Utilitarians: manipulation is unethical depending on the consequences  Erodes bonds of trust  Erodes respect between people  Erodes self-confidence Utilitarians would be inclined to believe that manipulation lessens overall happiness. Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-14 ETHICS OF SALES Particularly despicable forms of manipulation occur when vulnerable people are targeted for abuse - Children - The elderly Anyone else? Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-15 ETHICS OF SALES Marketing research seeks to learn something about the psychology of potential customers - intellectual capacity - emotional states - desires Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-16 REGULATING DECEPTIVE & UNFAIR SALES AND ADVERTISING Deception can occur when things are left unsaid. - What is not said about Tylenol in advertisements? - The role of the FTC - The effectiveness of drug advertising Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-17 REGULATING DECEPTIVE & UNFAIR SALES AND ADVERTISING Consumers get harmed when they buy a product they would not have otherwise purchased, especially when that product is priced higher than consumers would have otherwise paid. Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-18 REGULATING DECEPTIVE & UNFAIR SALES AND ADVERTISING Approaches to regulating deceptive marketing practices - Target practices intending to deceive (need to determine state of mind): J&J and Tylenol - Target practices that actually deceive (an ambiguous standard): Old Frothingslosh Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-19 REGULATING DECEPTIVE & UNFAIR SALES AND ADVERTISING Can we assume that consumers are reasonable or should we assume that consumers are relatively ignorant? Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-20 REGULATING DECEPTIVE & UNFAIR SALES AND ADVERTISING Adopting a reasonable consumer standard comes at a cost: it does abandon protection to those consumers who may well deserve the greatest protection. Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-21 REGULATING DECEPTIVE & UNFAIR SALES AND ADVERTISING It might be reasonable to apply different standards to different products or different marketing practices or different targeted markets. Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-22 CONSUMER AUTONOMY What does advertising or marketing do to people? - Dependence effect (John Kenneth Galbraith, 1958) a. the creation of wants stands supply & demand on its head b. the creation of trivial consumer wants distorts the economy c. the creation of consumer wants violates consumer autonomy Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-23 CONSUMER AUTONOMY The dependence effect - results in only the appearance of satisfaction - results in the reversal of democratic markets - results in dangerous consolidation of wealth in the hands of a few Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-24 CONSUMER AUTONOMY Does advertising control consumer behavior? - Psychologists say “yes” Really? Maybe behavior is not controlled as much as our autonomous desires are. Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-25 CONSUMER AUTONOMY After certain basic needs are met, why do people consume the way they do? We must distinguish between first-order and second-order desires…in other words, do we really want what we think we want? Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-26 CONSUMER AUTONOMY Autonomous desires are those that upon reflection are not rejected or repudiated. Does advertising create non-autonomous desires? Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-27 CONSUMER AUTONOMY Gerald Dworkin suggests two conditions for autonomy (in terms of desires) 1. authenticity: a desire is not renounced or rejected by the person who has it 2. independence: the desire must also be independently accepted by the individual. Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-28 CONSUMER AUTONOMY Consider therapeutic shopping - people shop to feel good - the desire to feel good is autonomous as long as the consumer does not come to regret the purchase and repudiate it - a fully autonomous consumer would ask: why do I feel good shopping? Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-29 CONSUMER AUTONOMY Some consumers do not act in a self-conscious and reflective way So what? - Marketing may be responsible for this. - Marketing exploits those with diminished capacity to reflect. Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-30 CONSUMER AUTONOMY Richard Lippke points out that autonomy is a long term capacity, more a matter of degree than something that characterizes any specific act or desire. Therefore certain conditions are necessary to support the development of autonomous capacities and dispositions. Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-31 CONSUMER AUTONOMY Autonomy requires a variety of intellectual skills, discipline, attitudes, and motivations. The cumulative effect of mass advertising impedes the development of those intellectual capacities necessary for leading an autonomous life. Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-32 CONSUMER AUTONOMY If advertising subverts the social conditions of autonomy… Does this mean that we are all the slaves of marketers? Are we unable to determine for ourselves what we need and what we want? Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-33 TARGETING THE VULNERABLE  Consider two target marketing examples  An automobile dealer targets advertising and direct mailings to simple women, under 35 years old, college educated with an annual income between $30,000 – 40,000  A marketing campaign depicts an elderly woman lying at the foot of a stairs crying out, “I’ve fallen and I can’t get up!” Are these campaigns on equal footing? Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-34 TARGETING THE VULNERABLE  In the first campaign no one is being exploited.  In the second campaign the vulnerability of the elderly creates greater responsibility. Do marketers have a responsibility to the vulnerable? Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-35 TARGETING THE VULNERABLE  What do we mean by vulnerable? A person is vulnerable as a consumer by being in some way unable to participate as a fully informed and voluntary participant in the market exchange.  General vulnerability occurs when someone is susceptible to come specific physical, psychological, or financial harm. Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-36 TARGETING THE VULNERABLE A portion of marketing does target people who are vulnerable as consumers, e.g. children. But there are difficulties in determining who else is vulnerable. Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-37 TARGETING THE VULNERABLE Often a person can become vulnerable as a consumer because they are vulnerable in some more general sense: - the elderly - a family member grieving over the death of a loved one - a person with a medical condition Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-38 TARGETING THE VULNERABLE Some marketing campaigns fit this model: - ambulance-chasing attorney seeking client - ads targeting elderly for supplemental medical insurance Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-39 TARGETING THE VULNERABLE But just as there are people who are made vulnerable as consumers because they are vulnerable to other harms, there are also cases in which people become vulnerable to other harms because they are vulnerable as consumers: - tobacco & alcohol products Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-40 TARGETING THE VULNERABLE There may be some truth to the claim that marketers cannot be liable for individual choices that consumers make because they never target any individual consumer… …but sales can not make that claim because sales people deal with individuals. Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-41 TARGETING THE VULNERABLE The point of this is that the defense against unethical manipulation that might be used in marketing is unavailable in sales. Salespersons have a choice to stop the sales pitch if they reasonably believe that the customer is not fully autonomous in decision making. Copyright © 2014 by McGraw-Hill Education. All rights reserved. 9-42
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Explanation & Answer

Attached.

Lowest Price Product -Outline

Thesis statement: There are various ethics that ought to be observed when doing marketing.
I.

Dilemma in buying low priced produced
A. Quality and price

B. Durability of price

C. Ethical dilemma

II.

Vulnerable Customers
A. Children
B. Aged
C. Alcoholic and smokers

III.

Article identified
A. From Forbes magazine about Apple Inc.

IV.

Cutting edge strategy
A. Customer and product oriented strategy


Running head: LOWEST PRICE PRODUCT

1

Lowest Price Product
Name
Institution

LOWEST PRICE PRODUCT

2
Abstract

The first section of this paper discusses the dilemma that customers' experiences
whenever they want to buy low priced products. Among the dilemma arise as a result of the
goods being high prices. Dilemma also arises when there is a question between the price charged
and the quality of the product. The second part explains about vulnerable customers where in this
case the young and the elderly are cited to be the most vulnerable group of customers as well as
those who consume a product that harms their health such as those smoke tobacco and drinks
alcohol. The paper also justifies why ethics in marketing should be considered when allowing
marketing to the vulnerable customers. The last part of the part discusses the review of an article
that was published by Forbes Magazine about why Apple has maintained to be at the top of the
market for last 5years now. The article explains the cutting-edge techniques of the company that
mainly focuses on three elements that are Focus, Empathy, and Imputes. The company also
employs a marketing gimmick that is customer and product oriented on their marketing. Finally,
the paper highlights deceptive areas in the commercialization techniques and gives a
recommendation such advertisement should be treated.

LOWEST PRICE PRODUCT

3
Lowest Price Produ...


Anonymous
I was having a hard time with this subject, and this was a great help.

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