MARKETING II

RESPONSIBLE CITIZENSHIP WITH GOOD GOVERNANCE 10:20-11:45 MWF

ETHICS IN SALES AND MARKETING

BY: ALMACEN, MYRA ROSE BESA-ANG, KARLA GRACE BUMILAY, MARY GRACE PIDAL, QUEENIE-LYN TICSE, RUBEN

MR. LEE MANN REXON BASINGA

December 20, 2010

I.

Background of the Study What is ethics? Ethics is the study on how people live their lives according to a standard of right or wrong behavior. In the business world, we might think that business establishments are ethical but in reality theyre not, only a few. In the business world unethical practices occur frequently. This occurrence is unavoidable especially when we talk of sales and marketing or business per se. Business, especially today, is all about making money, maximizing profits, thats why business men are enticed to do unethical practices or actions especially if its for their own interests. Right and just and fair are ethical terms. They express a judgment about our behavior toward other people that is felt to be ethically correct. We believe that there are right and wrong ways to behave toward others, just and unjust actions, fair and unfair decisions. These beliefs help to form our ethical standards of behavior. They reflect our sense of obligation to other people, our feeling that it is better to help than to harm other persons. The problem, however, is that it is difficult to avoid unethical actions or practices, and this is particularly true in sales and marketing. Why? Various groups are involved in business, managers at different levels and functions, workers of different skills and backgrounds, suppliers of different materials, distributors of different products, creditors of different types, stockholders of different holdings, and citizens of different communities/countries and benefits for one group frequently result in harms for others. Sales and marketing is a driving force in our economy. It is one of business assets, without it businesses will not be able to climb up the ladder of success. Aside from manufacturing firms, sales and marketing departments should also be inspected or scrutinized. There are various activities and practices done in sales and marketing and who knows unethical practices might be one. Sales and marketing departments should be the first place to build a culture with values that create a climate for sound business decision making and the practice of ethical behavior. We personally think that the public face of corporations is often painted by brand identity, through advertisements and sales representatives who go directly to customers or clients. With an aligned, sound code of ethics for marketing, sales and customer service, organizations would theoretically build consumer confidence and shareholder value.

II.

General Problem The problem is that some businesses today do not comply with their company rules and CSR. One reason is because of their common interests, which is to have greater profit and less sales and advertising cost. Unethical practices occur frequently in sales and marketing. They extend far beyond the commonly discussed issues of price discrimination, shill, greenwash, bait and switch, service discrimination, spams into such areas as marketing policies, false advertising, and attack ads. And these practices will mislead and harm consumers.

III.

Methodology First and foremost we thoroughly chose a topic, which will be accessible and not complicated for us to research on. We checked for references in the library and incorporated concepts from those references. We also surfed the net for more and updated information. Our next step is evaluated and narrowed our topic down, for us to be able to discuss on the topic easily. During the research, we used surveying tools, such as verbal questioning and floating questionnaires to the locality for public opinion and experience. We also documented the research process for truthfulness, that we actually did the research. We also went to observe some of the business establishments here in Baguio City.

IV.

Findings Through the research conducted by our group, we found out some cases wherein ethics in sales and marketing is being violated by businesses here in Baguio. Basing from the facts and survey, we found out that unethical practices really are being practiced by some establishments here, for the benefit of their business. The most common practices are price discrimination and service discrimination. Price discrimination, also called yield management, occurs and is unethical when a firm charges a different price to different groups of consumers for an identical good or service, for reasons not associated with costs. Market segmentation may also be associated with price discrimination. For instance, womens haircuts are often more expensive than mens haircuts which in past times could be accounted for as women generally had longer hairstyles whereas men generally had shorter hairstyles. Another example is basing on peoples social class, whether they are rich, poor or middle; race whether you are a Filipino or a foreigner. Price discrimination has become wide spread in nearly every market. Like monopoly markets, it occurs with oligopolies such as airlines,

and even in fully competitive retail or industrial markets. Here in Baguio City, price discrimination is most likely practiced in the public market. Service discrimination, this is somewhat related with price discrimination. It happens when firms treat different consumers with different ways of service. During the research (in the net), we found a person who has experienced these kinds of treatments (service discrimination and price discrimination) in one of the known places here in Baguio. He stated that his stay at this particular place is far from satisfactory. One of his experiences was that he was attended by staffs that were cold like robots programmed to do exactly what they were told to do. They have constrained smiles plastered on their faces, they took so long to refill coffee, and it was not even complete. He had to request for their order several times before it was served to them. He and his companions again experienced the same behavior in one of the restaurants here in Baguio. He stated: The food was okay at best, but what irked me the most was the behavior of our server. She looked like she was mad at the world. She looked very pissed that we arrived at the last hour, and wouldnt even smile the whole time we were there. When we left, the girl let out a loud squeal of joy just as she was closing the restaurants door. It was very distasteful. I could not say it was because she knew we were not members, because she did not see our guest cards until we left. So I assume this is the service she/the restaurant give to everyone. Then he added, It was a disappointment because I was looking forward to dining in one of Philippine Tatlers Baguios finest. They also have experienced price discrimination, when they went to this, mini bar, where in it has no menu/list to check the contents of the mini bar. They were charged P50 for a Piknik snack which was not there in the first place, however they did not went near the mini bar. His friends were also charged P210 for two bottles of water, which they did not consume. Comparing these establishments with others, you can easily distinguish the differences from facilities to staffs, from staff courtesy to quality service. We also found out, basing from some of the students that service discrimination may occur anywhere. Aside from business, banks, restaurants, etc. it may also occur in schools, like in the libraries. Today Baguio is now filled with so many foreigners, especially Koreans. We know one who has experienced price discrimination. She sometimes notices that when she buys something the prices charged to her were high, while others are not.

V.

Recommendation First and foremost, they must comply with their standards and social responsibilities, to avoid negative feedbacks from costumers/clients and attain a successful business. They must eliminate unethical practices. They should conduct counseling to those employees who do not comply with their standard and do unethical practices. If this wont effect, reprimand or punish them, or most likely dismiss them from their positions to avoid problems in the future. Human resource management should also be responsible in hiring employees. HRM should use assessment tools to help in sound hiring decisions. Assessment tools are necessary components in the hiring process, because you will accurately determine a persons capabilities and thinking skills. Using scenario type, ethically based questions during the interview process and conducting thorough background checks will also help determine a persons capabilities and thinking skills. Actually there are a lot of other alternatives to maximize profits and in the attainment of a successful business, instead of doing unethical practices. All it needs is intensive research in finding new and effective ways/practice.