The document discusses various ethical issues that can arise in the place/distribution component of business, including collusion between retailers and manufacturers to limit competition, price maintenance agreements that restrict pricing flexibility, territorial restrictions that limit where firms can operate, tying arrangements that require purchasing unwanted products, dual distribution systems that disadvantage independent distributors, preferential treatment that favors some distributors over others, full line forcing requirements, refusal to deal with certain channel members, and exclusive dealing agreements that block competitors if certain conditions are met.

1. Business Ethics and Governance
SUBMITED BY
D.TULASI

2. PLACE
Place/physical distribution is the delivery of products at
the right time and at the right place. The distribution
mix is the combination of decisions relating to
marketing channels, storage facility, inventory control,
location, transportation, warehousing etc.

3. ETHICAL ISSUES RELATING TO PLACE
collusion
Retailer and/or manufacturer get together and agree to
limit competition.
Price maintenance
Manufacturers may put pressure on retailers not to sell
their products below or above a certain price. Generally
it is explicitly illegal for retailers and manufacturers to
agree not to sell below a certain price.

4. Territorial restrictions
Firms may be allowed to operate only in selected territory.
Tying
 Here, the customer may required to buy two products even
if he or she only wants to one. Firms may want to engage
in this activity if they have a monopoly - like situation for
one product but face competition for another.
 Tying is legal under some circumstances when it is deemed
to be reasonable but can be illegal if it is abusive and
serves no legitimate purpose.

5. Dual distribution
A producer can use two different channels to reach target
market and put independent distributor out of business.
Preferential treatment/ secretive behavior
This is a situation that develops when a manufacturer has
more than one authorized distributor in a territory.
Manufacturer may sometimes prefer one distributor over
the other. Those kind of actions are damaging, disruptive,
and illegal.

6. Full line forcing
This is a situation were a channel member is required to carry
a supplier’s entire product line to obtain any of its products.
Refusal to deal
Suppliers can choose their distributors and refuse to deal with
others if their decisions are not based on anti-competitive
motives or are not part of an organized refusal to deal with
certain channel members.

7. Exclusive dealing
Forbidding an intermediary to carry products of a
competing manufacturer is anticompetitive if:
 It blocks competitors from 10 percent of market.
 Sales revenues are sizable.
 The manufacturer is larger than dealer.