This document discusses marketing ethics related to product safety and pricing. It outlines the four Ps of marketing - product, pricing, promotion, and placement. It then discusses key questions around who would buy a product, appropriate pricing, product liability, and ethical perspectives on exchanges. The document examines issues around informed consent, coercion, societal values beyond buyer needs, negligence, strict liability, pricing considerations, and caveat emptor.

1. Marketing Ethics – Product
Safety and Pricing
Jerry Estenson

2. Four “Ps” of Marketing
•
•
•
•
Product
Pricing
Promotion
Placement

3. Basic Concept of the Market
• A place where a seller brings a product or
service and where a buyer is willing to
“exchange” something of value for the
product or service.

4. Big Questions
• Who would be interested in buying the good or
service?
• What price would they be willing to pay?
– How much can they afford?
• How will the price affect other stakeholders
(distributors, retailers, competitors)
• Who is responsible for the product should harm
occur?
• Are requirements different if selling in other
countries?

5. Ethical Perspectives
• A free exchange is “Prima Facie” (On its face)
ethically legitimate
– Kantian – respect for individual because they are
seen as capable of pursuing their own interests.

6. Issue Occur When
• Exchange was a result of informed or
voluntary consent
– No Fraud
– No Deception
– No Coercion

7. Kant Again
• Were participants treated simply as means to
an end?
• Are there real benefits from the transaction?
• What other values maybe at stake (societal
concerns)

8. Coercion
• The more an individual needs the product the
less free they are to decide (addicts or very ill
people)
• Informed consent
– What about buyers with impaired skills (reading,
math, life experience)?
• Addition to “Affluenza” (higher degree of
consumption will lead to higher degrees of
happiness)

9. Values beyond needs of buyer
•
•
•
•
•
Fairness
Health
Justice
Safety
There is a market for children

10. Product Liability
• First sense
– Who or what caused the problem
• Second sense
– Assignment of blame or fault “who is
responsible?”
• Third sense
– Who is accountable? Such as who is responsible
for paying an elderly persons bills

11. Negligence
• Contract – only what is promised
• Contractarian view – I have duties to what I
have narrowly and explicitly assumed
• General duty: Not to put others at
unnecessary or avoidable risk
– One does not neglect their duty to exercise
reasonable care not to harm other people
• Ought not reasonably oblige someone to do what they
cannot do
• One ought not to harm others

12. • One standard – liable only for harms they could
actually foresaw occurring
– Recklessness or even intentional harm are far beyond
simple negligence
• A higher standard – Avoid harm that even if not
actually thought about they should have thought
about.
• What would a reasonable person expect an
“average person to know”
• Higher your knowledge the greater your
obligation

13. Product Liability
• Strict – Product performance. Therefore
responsibility is on producers
• Who pays
– Tough luck – consumer pays
– Society – Socialized insurance
– Manufacturer
• Deep pockets and ability to pass on cost
• “compensatory justice” Those who caused the harm or have
benefited from the transaction should compensate people
harmed
• Guns and Cigarettes

14. Caveat Emptor
• You are required only to live up to your end of
the bargain. Pay the price – Deliver the goods
or services

15. Pricing
• A fair price is one that both parties agree to
– What about availability of buyers and sellers? If
either limited then no market equilibrium
• Knowledge of buyers
– AIDs drugs in Africa
• What about patents?
• What about monopolistic pricing?
– Wal-Mart, COSTCO, Target, Safeway
• What about stair-step pricing in auto industry?
• What about government subsidies?