Ethical Issues in Marketing : Ethical Issues in Marketing Presented by-
MASMS, JAIPUR Pricing Issues : Pricing Issues Predatory pricing
Vertical price fixing
Horizontal price fixing
Comparative price advertising
Scanned vs. posted prices Consumer Rights : Consumer Rights Right to safety
Right to choose
Right to Know-How
Right to be heard
Right to compensation Unethical practices in marketing : Unethical practices in marketing Rural products
Selling low quality products
Selling local products in the name of imported products. Unethical practices in marketing : Industrial products
Damages in poor packaging, handling & tansporatation. Unethical practices in marketing Unethical practices in marketing : Making false promises and gifts.
Using similar colored prints, package & logo of popular barnds.
False claims like pure ghee, preservative free etc. Unethical practices in marketing Unethical practices in marketing : Pharma products
Small fonts on label making it difficult to read.
Full details of the product not provided Unethical practices in marketing Ethics in Personal Selling : Ethics in Personal Selling High pressure sales tactics
Fair trade practices
Forget their obligation to be truthful & satisfy consumer needs. Pricing Issues : Pricing Issues Price discrimination
seller price discriminates when it charges different prices to different buyers. The ideal form of price discrimination, from the seller's point of view, is to charge each buyer the maximum that the buyer is willing to pay. Slide 10: Robinson-Patman Act
Robinson-Patman Act, The act, advanced by Congressman Wright Patman, forbade any person or firm engaged in interstate commerce to discriminate in price to different purchasers of the same commodity when the effect would be to lessen competition or to create a monopoly.
Sometimes called the Anti-Chain-Store Act, this act was directed at protecting the independent retailer from chain-store competition, but it was also strongly supported by wholesalers eager to prevent large chain stores from buying directly from the manufacturers for lower prices. Deceptive pricing : Deceptive pricing Bait and Switch pricing
The bait and switch is a fraudulent sales tactic that is punishable by US law, as false advertising. Though the law forbids the bait and switch, it is commonly used, and one can find examples of it in virtually any advertising circular for major department stores, electronics and computer stores, and automobile retailers.
The purpose of the bait and switch tactic is to get customers to visit a store or business by advertising very low prices. Once the customer is in the store, the salespeople attempt to offer the customer items at higher prices. Bait and Switch pricing : Bait and Switch pricing The bait and switch begins with the bait, an advertisement for a product at what seems like an extremely low price. Sometimes these products, such as a mattress, are of very low quality. Other times, the price may apply to one specific style of, or model of an item. In general, the bait is stocked in very low numbers. In some cases, only one or two of items are available at the low price.
Once the customer has walked into the retail establishment, the bait and switch moves to the switch. The salesperson will inform the customer that the store has sold out of the advertised item and offer a similar item at a higher price. Alternately the salesperson may push hard to be certain the customer understands that the lower-priced product is of inferior quality, and try to sell a better quality product at a higher price. Bait and switch may also be used to bring in customers with bait, low prices, and also raise prices of unrelated items that customers might also pick up at the Unfair Pricing : Unfair Pricing Predatory Pricing is an anti-competitive measure employed by a dominant company to protect market share from new or existing competitors. Predatory pricing involves temporarily pricing a product or providing services at prices that are low enough to drive competitors out of a market, so as to monopolize the market. In other words, Predatory pricing can be defined as the practice of selling a product at low prices in order to drive competitors out, discipline them, weaken them for possible mergers, and/or to prevent firms from entering the market. It is an expensive strategy. Slide 14: Explanation (b) to Section 4 of the Competition Act defines "predatory price" as the sale of goods or provision of services, at a price which is below the cost, as may be determined by regulations, of production of the goods or provision of services, with a view to reducing competition or eliminating the competitors.
Predatory Pricing under the Competition Act, 2002
The five key limbs of the Act are as follows:
(1) Prohibition of Anti-Competitive Agreements2 (Section 3);
(2) Prohibition of Abuse of Dominant Position (Section 4);
(3) Regulating Combinations (Sections 5&6);
(4) Competition Advocacy (Section 49); and
(5) Rendition of Advisory Opinions from competition perspective on public
action (policy, law, proceedings of Government/Statutory Authority) Price Fixing : Price Fixing Horizontal price Fixing- price fixing among competitors
Vertical price Fixing –
Price fixing between manufacturer and distributer.