Marketing Ethics – Product
Safety and Pricing
Four “Ps” of Marketing
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.
• Who would be interested in buying the good or
• 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
• Are requirements different if selling in other
• A free exchange is “Prima Facie” (On its face)
– Kantian – respect for individual because they are
seen as capable of pursuing their own interests.
Issue Occur When
• Exchange was a result of informed or
– No Fraud
– No Deception
– No Coercion
• Were participants treated simply as means to
• Are there real benefits from the transaction?
• What other values maybe at stake (societal
• The more an individual needs the product the
less free they are to decide (addicts or very ill
• 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
Values beyond needs of buyer
There is a market for children
• First sense
– Who or what caused the problem
• Second sense
– Assignment of blame or fault “who is
• Third sense
– Who is accountable? Such as who is responsible
for paying an elderly persons bills
• 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
• One ought not to harm others
• One standard – liable only for harms they could
actually foresaw occurring
– Recklessness or even intentional harm are far beyond
• A higher standard – Avoid harm that even if not
actually thought about they should have thought
• What would a reasonable person expect an
“average person to know”
• Higher your knowledge the greater your
• Strict – Product performance. Therefore
responsibility is on producers
• Who pays
– Tough luck – consumer pays
– Society – Socialized insurance
• Deep pockets and ability to pass on cost
• “compensatory justice” Those who caused the harm or have
benefited from the transaction should compensate people
• Guns and Cigarettes
• You are required only to live up to your end of
the bargain. Pay the price – Deliver the goods
• 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?