Discuss Marketing and ethics |Marketing

Discuss Marketing and ethics |Marketing

he ethics case study (PLEASE SEE ATTACHED FILE) is actually 7 mini-cases. Here are the questions for the cases (plus an extra question):

1. When is a tip a bribe? And what is the difference between a perk and a bribe? (Can use outside source)

2. When is it ethical to bill a client for dinner? Should you disclose to the client everything you spend money on? (Can use outside source)

3. In a demanding profession where you’re expected to be “on” all the time, are drugs to be expected and thus condoned? (Can use outside source)

4. Is there a right or wrong answer to this caselet? (Case & outside source)

5. Does the client need to know that the sales person isn’t part of the day-to-day team? Does it matter? Does it matter how the company presents itself to the client? (Case & outside source)

6. What decision should Jain make? How should he advertise the new and old models? (Be specific in terms of price, place and promotion) (Case & outside source)

7. If an ad is accurate, while actually only telling half the story, is it still the truth? It is ethical to change a product dramatically without telling customers? (Case & outside source)

8. Is it ethical to advertise pharmaceutical products direct to consumer? (Case & outside source)

MARKETING AND ETHICS

A Night to Remember: Personal Time on Your Client’s Dime

Frustrated, Florence Drake sat at her desk. Her evening, which was to include a date with the gym and a healthy salad, had just been preempted. Five minutes earlier, Allen Shumann, senior executive producer of News Today New York, had called to ask Drake to dinner that night. She had been trying in vain to arrange dinner with him so that she could talk up her clients. Their schedules had not been compatible—until now. Although she longed for a simple evening at the gym and then at home, she could not pass up this opportunity to pitch her client’s upcoming big event to Shumann. News Today New York exposure would help establish Drake’s credibility in the firm and give her a chance at that big promotion. Drake grabbed her purse and gray wool coat and dashed swiftly out the agency’s front door. Within minutes, Drake was hailing a cab to meet Shumann at Bank Street Grill, one of New York’s finest steak and seafood houses.

While dining on filet mignon and drinking many glasses of her favorite Cabernet

Sauvignon, Drake discussed a variety of topics with Shumann. In addition to telling him about her client’s upcoming event, she gave him some background on the other brands she represented and even spoke about her own journey into the world of public relations. Overall, she felt as though the night had been a great success. She had achieved two goals: establishing a working relationship with one of the nation’s leading producers and bringing her client to his attention. And although there was no guarantee he would cover the event, she believed it was a job well done. After all, he did ask her to send additional information about the event and said he might send someone to cover it. After dinner, Drake parted ways with Shumann and met two of her best friends at a local West Village bar.

After learning about where she had dined and how much she had spent at dinner

(approximately $180), her friends could not believe that she was going to bill this dinner to a client. “Was it really necessary to take this producer out to the one of the finest restaurants in the city when there are numerous other options?” one asked her. Another asked, “Will your client be made privy to the fact that you two ordered a bottle of wine, two martinis, and after-dinner drinks during the meal? Also, how would you even put that on your expense report?” Drake

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knew that her friends just liked giving her a hard time. But something didn’t feel quite right about what they said.

That night, when Drake finally returned to her apartment, she mulled over her friends’

comments. “If my job is based around networking and relationship building,” she thought, “why should it matter how much we spend on dinners with producers and editors—as long as we get the work done?” Is it important to disclose to the client in the expense report that she had had tuna tartare as an appetizer or a chocolate raspberry soufflé for dessert? Was it ethical to expense a client for a dinner when you discussed more than just that client? Even though there was no guarantee from the producer that something would come of this meeting, it was okay to bill the client…wasn’t it?

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Life in the Fast Lane: Getting Personal with Your Staff

In August 2002, Dana Westington founded Red Carpet Communications (RCC), a boutique public relations agency specializing in garnering press for luxury consumer products. Located in New York City, RCC had become the agency of choice for some of the trendiest and most en vogue companies. Now, RCC had over 30 employees and was looking to expand. Most employees at RCC were women between the ages of 22 and 29 who had many things in common, including affable and outgoing personalities and a love for the finer things in life.

It was the middle of 2005’s Fashion Week in New York City’s Morgan Park, which

meant runway shows, paparazzi, photo shoots, and designer after-parties. For some, this was an extravagant week of glitz and glam. For Westington, this week was the busiest time of year. In fact, during New York Fashion Week, RCC employees were expected to meet their clients at the fashion tents each day no later than 8:00 a.m. to prepare for the day’s shows and help facilitate media interviews. Then, after a full day of media interviews and handling photographers, publicists were expected to attend after-parties with their clients or their media connections until one or two in the morning, making for an exceptionally long day.

It was 12:30 a.m. Thursday, just minutes after designer Kit Torrington’s after-party had

ended. It had been a successful evening. The client was happy, and the press had loved the spring line. But Westington could not relax. Just hours earlier, she had overheard a conversation between two young women on her staff about how certain employees in the firm, whom they referred to by name, had been using drugs to stay energized during New York’s Five Fabulous Nights of Fashion. The conversation was brief, and they did not realize Westington was there. Now, however, Westington was unsure what to do with this information. Since it might not be true, and since she only overheard the conversation, should Westington just go ahead and drop the issue? Given that all employees were working under a demanding schedule, should she confront the entire staff about her concerns? Should Westington take these employees aside and speak with them about what she had overheard or even directly confront the employees who might have a problem? Although it had been just a short conversation about something that may or may not be true, Westington asked herself if this were a much bigger issue than she had ever thought. She also wondered if it even mattered whether they were taking drugs. In fact, their performance was top-notch, and their clients were happy. So why should it matter?

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Creative Interview Tactics: The Art of the Half-Truth

Paige Dawson, head of recruiting at HR Enterprises, a boutique government consultancy firm based in Alexandria, Virginia, had just completed an interview with Matt Simons, a Darden Graduate School of Business Administration graduate with extensive experience in the government sector. In addition to having a distinguished pedigree and incredible recommendations, he was well mannered, amiable, and undoubtedly a team player. He was particularly well suited for the job and—so far as Dawson was concerned—it was a done deal. The next day, she would extend an offer to Simons in the hope that he would join the team as early as the next week.

Suddenly she remembered: At the end of the week, she had scheduled another interview

for this position with Cindy Brown, a highly skilled and highly recommended candidate. Although Brown was also impressive in her own right, she just did not compare to Simons. Her relatively low GMAT score and lack of project management expertise placed her farther down the list, so much that Dawson was not certain if it was worth even interviewing her.

Dawson wondered whether she should wait to extend an offer to Simons until she met the

other candidate, especially since Simons had another offer on the table with a tight deadline. Was it fair to interview Brown when her experience did not rival Simons’s? After some contemplation, Dawson thought that the only professional choice would be to interview Brown even if an offer went out to Simons beforehand. Brown could be a great fit for a future position; therefore, she did not need to know that this position had already been filled. In addition, Brown currently worked at Nevis Consulting, HR Enterprises’ biggest competitor. In her HR training, Dawson had learned how to get information out of people by asking the right questions. In interviewing Brown, she could perhaps learn more about Nevis, including how the company was structured, how much it billed clients, and how it attracted new business.

Dawson’s secretary buzzed: “Paige, Cindy Brown is on the line right now. She just called

to confirm her interview on Friday. I was going to tell her that it was scheduled for 11:30 in the morning, but I wanted to confirm with you. Is that still okay?”

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The A-Team: Truthfully Representing Your Company

Eric Madsen was elated. He had just been chosen to be part of a select team of employees at Choi & Barrow Advertising to participate in the company’s biggest new business pitch of the year for Find-It, a leading search engine. Find-It had been a leader in the online industry for years; however, with innovative new capabilities, a fresh directive from the CEO and strong competition, it was imperative that the company differentiate itself in the marketplace. The current advertising campaign for Find-It was nothing better than lackluster. Thus, Find-It had begun its search for a new advertising agency, and Choi & Barrow was up for the bid.

While Madsen had superb presentation skills and a knack for closing the deal (in fact, he

had won three new business projects during his first month on the job), he was not sure why he should be on the pitch team. With no previous technology experience, Madsen knew that he could not bring much to the table in that regard. In addition, there was already a team of technology experts in the office. Why weren’t these experts tapped for the pitch? Further, he was certain he would not be part of the team if the company won it.

Even though he was happy to be chosen, Madsen questioned the ethics behind the

decision. If he weren’t going to be involved in working on the actual account, was it ethical for him to pitch the business? In general, clients assumed that the people on the advertising pitch team would be working on the account. He had clearly been chosen to be on the pitch team because of his highly successful presentation skills. Did it really matter?

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Medical Innovations: The Health of the Consumer OR Company

Saymeer Jain was a first-year sales associate at RMD, a medical devices company that specialized in developing MRI (magnetic resonance imaging) equipment. For years, RMD’s model XR-U72 had been the standard imaging device found in most hospitals. But RMD’s R&D department had just made an internal announcement that the company had produced a new model, MR-S72, which was much less expensive to produce and much more effective (studies showed that it was 30% more effective in imaging than the XR-U72 model).

As the marketing manager of RMD’s MRI equipment, Jain had a difficult challenge: to

unload the seven remaining XR-U72 models. At nearly $2.9 million per unit, the XR-U72 model commanded a very high price compared with its competitors (the range for MRI equipment was anywhere from $1 million to $3 million). Given RMD’s high fixed costs (primarily R&D expenditures) and the high cost of parts, Jain realized that it was not feasible to drop the model’s price. In fact, his boss had given the mandate that the price could not be reduced—there could be no “bargain basement” pricing to unload the XR-U72s.

Jain pondered his options. What kind of advertisements could he create for the old

product, knowing very well that the new model was 30% more effective? Should he wait to sell the new model until after the old ones were sold out? If so, what would the ethical implications of his actions be?

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Little White Marketing Lies: Challenges with Changing the Product

For the past year, Ginger Harrison had been the assistant brand manager for the Italian Foods Division at Klein’s Foods, a high-value food manufacturer. Since she started at the company, her division had been extremely successful selling Klein’s Foods brand of Italian meatballs both direct-to-consumer and business-to-business. Overall, business with the brand was booming. But with the rising costs of ingredients across all brands, the company had not performed well during the previous two quarters.

With a mandate to cut costs in her division and submit a recommendation to management

in a week, Harrison was perplexed about what she should do. Her options were limited. Cutting staff and lowering pay were not options, given that the division was already operating as leanly as possible. Additionally, it would cost too much to change the marketing strategy and the packaging on the product. Further, she could not consider increasing the product’s price because it would probably deter customers from purchasing it (market research suggested that the company’s meatballs were a high-value-based purchase decision; thus, any price increase would significantly decrease sales).

With one week to come up with a recommendation, the Italian Foods Division staff

members met to discuss their ideas. During a three-hour meeting, the room voted (majority rule) that the only way to cut costs was to put less meat in the bags. To remain truthful in their marketing, they would still include the same weight of product, but instead of protein, they would add more sauce and spices. In essence, the customer was receiving exactly what was advertised (four pounds of meatballs and sauce per bag), but Harrison knew this would be misleading the consumers.

Harrison wondered about the ethics of this decision. Even though the product’s marketing

was going to be the same, and was in fact accurate, was it ethical to change what the customer received? Did such an action engender ill will in the customer? How would this affect business in the long run?

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Pharmaceutical Advertising: A Conversation or a Scam?

Jay Thompson, a recent Darden School of Business graduate, was spending his first year postgrad in the marketing department of a large pharmaceutical company, Alphin Brown Pharmaceuticals (ABP), based outside of Philadelphia. It was an optimal situation. He was close to his family, his wife had a great job in the area, and his children were in one of the best school districts in the country. Life could not be better, Thompson thought. In addition, he was currently on the marketing team of Biplexic, a groundbreaking new treatment for bipolar disorder. With a personal tie to the illness (his sister had been diagnosed with it five years ago) and a high level of enthusiasm for the position, Thompson believed he had landed in the perfect job.

During Thompson’s first week at ABP, he was asked to attend a meeting with the

advertising agency to meet the team and to see the unveiling of the new direct-to-consumer marketing campaign. Prior to Biplexic, none of the company’s bipolar drugs was advertised direct-to-consumer, but rather directly to physicians. But because Biplexic was a revolutionary drug and because the company had increased sales approximately 4% in the past year using this method for other products, management believed that it was time for such a campaign. At the meeting, the agency presented the advertising campaign it had created.

PROPOSED DIRECT-TO-CONSUMER COMMERCIAL for BIPLEXIC

Presented by Regal Advertising <SCENE SET-UP>: An older man and woman are sitting at their kitchen table. Neither speaks. The man was reading a newspaper. The woman was staring into her cup of coffee. She breaks the silence. WOMAN: “Honey. I’m not sure what’s wrong with me, with us. <PAUSE> I can’t help the way I feel. I really don’t understand it. But I do know that I don’t want it to affect us. It’s time that I take a stand against it. <PAUSE> For me. <PAUSE> For us.” MAN: “I’m so glad you want help, dear. I know it’s hard for you to live with the mood swings. <PAUSE> One day you’re up, the next you’re so depressed. It must be an emotional roller coaster for you, and I can see how painful it is.” <SCENE SET-UP>: Images of the couple laughing, holding hands, and frolicking through a field appear onscreen as the narrator speaks. NARRATOR: “Do you ever feel down? Do you ever feel really happy? Do your emotions range from extreme highs to extreme lows? <PAUSE> If so, you might have bipolar disorder. And it’s about time that you take a stand! The next time you’re in your doctor’s office, tell him or her about your symptoms, and mention Biplexic. It’s your choice for freedom.”

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Thompson walked out of the meeting frustrated and disturbed. With a sister who had suffered with bipolar disorder, he knew how severe the illness really was. He also knew that marketing directly to consumers had strong implications, including overprescription of drugs and increased health care costs.

He closed the door to his office and questioned himself: “Of course we all have highs and

lows. Isn’t that part of being human? How can they take such a serious problem and profit from it? How was pharmaceutical advertising ever ethical? I get that marketing to physicians is fine— they need to know about the drugs—but marketing to consumers? They really don’t know what’s in their best interest health-wise, and this isn’t helping.” Sitting at his desk, Thompson tried to sort out in his mind what was ethical and what wasn’t about marketing pharmaceuticals directly to consumers. At the same time, a distressing thought came into his head: Maybe this was not the perfect job for him.

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