Vazquez Pablo Ms.

Horner BUS 330 April 16, 2012

Week 4 Chapter 8 & 9 Review Questions Chapter 8 Review Questions 1. Explain three general ethical concerns that should be raised in marketing ethics. Three ethical concerns are: To what degree are the participants respected as free and autonomous agents rather than being treated simply as means to the end of making a sale, impulse buying, and the marketing techniques used to promote it, cannot be justified by appeal to satisfying consumer interests The more necessary an item is to a consumer, the more protection they would deserve from unsafe products and/or unscrupulous manufacturers. The complexity of many consumer products and services can mean that consumers may not understand fully what they are purchasing. Uninformed consumers can be an easy target for quick profits, externalities show that even if both parties to an exchange receive actual benefits, other external parties might be adversely affected.

2. Describe several ways in which consumers are less than free in making choices about which products to purchase. In the complex process of consumer decision making are integrated many of the psychological concepts, social and cultural rights of the individual, In cases of price gouging, price-fixing, and

Vazquez Pablo Ms. Horner BUS 330 April 16, 2012

monopolistic pricing are ways in which consumers are less than free in making choices about which products to purchase. A patient receiving a prescription from her physician many not are in a position to request a generic version of that drug. A consumer who has arthritis may not understand the complexity of the various drugs offered to determine which is the best drug or whether a generic version is safe and effective.

3. Explain why caveat emptor would be the ethically preferred product safety approach of the free market economic theory. The caveat emptor approach understands marketing on a simple model of a contractual exchange between a buyer and a seller. Unless a seller warrants a product as safe buyers are liable for any harm they suffer. Every purchase was assumed to involve the informed consent of the buyer and was therefore assumed to be ethically legitimate. The seller only has an obligation to provide the product at an agreed upon price unless they have explicitly warranted the product as safe. If the seller had not warranted the product as safe, the buyer would be liable for his or her own damages. 4. Explain the concept of negligence and offer an ethical defense of the claim that drug manufacturers should be held liable for negligent testing or production of their products. In a products liability case, the plaintiff usually must prove that the product was defective. A defect is an imperfection that renders a product unsafe for its intended or reasonably, Negligence is at the

Vazquez Pablo Ms. Horner BUS 330 April 16, 2012

very core of tort law and involves a type of ethical neglect, specifically ones duty to exercise reasonable care not to harm others. Negligence can be characterized as a failure to exercise reasonable care of ordinary vigilance that results in an injury to another. If drug manufacturers were only responsible for their contractual terms (i.e., those explicitly stated on the label or in advertising), it doesnt mean they arent negligent in not properly testing a drug prior to marketing or for not informing of known side effects of a drug because they should have been cautious enough to properly test and know the full extent of possible harm that could be done. 5. To what extent should manufacturers be held liable for harms caused by their products? The responsibility of the manufacturer to market its insurance products. Are under the law of torts, as a manufacturer is held strictly liable when one of its products since the market with the knowledge to be used without inspection for defects, proves to have a defect that causes damage to a human being. However, the producers can be held liable for any negligence in the design or marketing of such dangerous products. If a producer knew, or should have known, that a product had the potential to be harmful, there is a duty to inform and disclose this information to consumers in a manner that will make it explicitly clear the possible harm a product can cause. 6. Evaluate three different ethical arguments used to justify the policy of strict product liability.

Vazquez Pablo Ms. Horner BUS 330 April 16, 2012

First the consumers can be made accountable for their own harms, consumers should make informed decisions about alcohol consumption based on accurate and balanced information. Consumers are in the best position to judge the personal risks and benefits of that behavior. Second Society can be held accountable. If society in general were held accountable, it would seem to commit us to a socialized insurance system and would therefore place responsibility for all injuries and diseases on society, Third The product manufacturers can be held accountable When an industrial, medical or consumer product malfunctions in a way that causes injury or illness, the manufacturer can be held accountable for the damage

7. Explain three ways in which the lowest price might not be the ethically best price. The price is the only element of the marketing mix that provides income for the other components only produces costs. What's more, pricing and competition, first Price gouging: This occurs when the buyer, at least temporarily, has few purchase options for a needed product and the seller uses this situation to raise prices significantly, second Monopolistic pricing and price-fixing: These two practices are similar. Individual or groups of conspiring companies use their market power to force real competition in the marketplace and third the greater freedom a consumer has to walk away from a product, the less likely it is that the seller can set an unfair price. The greater the competition within a market, the less likely that unfair pricing can occur

Vazquez Pablo Ms. Horner BUS 330 April 16, 2012

Chapter 9 Review Questions 1. Distinguish between manipulation, deception, and a lie. Does the ethical wrong with these practices depend most directly on the consequences or on the intent? Human beings have enough power to dominate and control people. Through the art of manipulation can control minds, what someone thinks, says, as is or how it performs... So the media are the most power on society by manipulating us to believe certain things, whether or not certain; try to seduce us to accept what they offer without giving reasons, The lies are directly related to self-esteem. We lie when our ego is threatened or when we want to take advantage of a situation. Lying is a survival strategy, a tool of the human evolutionary and deception is a form of manipulation and is in a sense an outright lie. One can be deceived without being manipulated. The more one knows about others psychology (motivations, interests, desires, beliefs, disposition, etc.), the better one can manipulate others behavior 2. Distinguish between ethically acceptable means of influencing another and ethically improper means to influence another. Apply your answer to the case of pharmaceutical ads.

Vazquez Pablo Ms. Horner BUS 330 April 16, 2012

Ethically acceptable means to be just, fair, the right thing to do, best practice. Somethings may be law, rules or tradition, but that doesn't make them ethical ethically improper means include threats, coercion, deception, manipulation, and lying. People suffering from medical conditions are vulnerable to advertisements involving cures, pain relief, or other therapeutic benefits are hit the hardest by the ethically improper means to influence another. 3. Explain how the FDAs standards of deception and unfairness are related. How might an advertisement be both deceptive and unfair? When producers deceive consumers, other competitive producers are unable to fairly compete in the marketplace. Competitive producers undergo losses when the deceptive practices of others succeed. Through the advertising of the drug companies that basically have the same active ingredient in it, but yet claims that their product is faster and better, even though the other drug companies make the same claims. 4. What things do advertising do for consumers? What does advertising do to consumers? In what ways has advertising done anything to you? Advertising is a way for companies to promote themselves and their products, a way for them to reach out and inform the consumers about their products and services. Advertisements provide information to consumers about products and help them make responsible choices. Increasingly,

Vazquez Pablo Ms. Horner BUS 330 April 16, 2012

advertisements have served as entertainment to consumers. In addition, they contribute to the economic market. It is also a way for the companies to compete with other companies that are offering the same products and services. 5. Distinguish between autonomous and nonautonomous behavior. Explain the difference between autonomous and nonautonomous desires. Do you have any desires that you would characterize as nonautonomous? What is the difference between first-order and second-order desires? Autonomy involves the ability to freely make decisions using ones personal independence. When one is influenced by another in the decision making process, their autonomy is not being honored, Autonomous desires has to do with advertising controlling behavior, to create desire on the way of which consumers are acting. Meanwhile nonautonomous desire is desire that is voluntary. First-order desires are those wants that a person just happen to have at any given time. First-order desires are those wants that a person just happen to have at any given time. Any rational and conscious human beings can also step back from their desire and ask second-order questions, such as: Why do I want what I want? And it might turn out that a person does not want (secondorder want) what he in fact wants (first-order want)

Vazquez Pablo Ms. Horner BUS 330 April 16, 2012

6. To what degree do you think that modern marketing has created a dysfunctional affluent economy in which irrational and trivial consumer demand has replaced personal and social needs? Modern marketing makes everything seem good and that every consumer needs to have it. Many consumers are worried about purchasing the most advanced technology for example every time that a new product its coming out people will start to get crazy waiting for the new stuff, we can see this every year in every company. People buy products that they do not need, and seldom do people pay overprice. This way of buying products that we do not need, and on top of that overpay can sometimes take away things from other people.

7. Explain two ways in which a consumer could be described as vulnerable. What factors might make a person vulnerable in each sense? What are the ethics of marketing to the vulnerable? Consumer vulnerability occurs when consumers are not able to independently make an informed decision to purchase a product on their own. Consumers can be described as vulnerable if they lack intellectual capabilities. The other way in which a consumer is vulnerable is in which the harm is other than the financial harm of an unsatisfactory market exchange. In the first sense the target is

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focused on the young and old through advertisements. There are different factors that can make a person vulnerable such as; being poor or being of a particular ethnic group Mostly they are unethical and have no sense of care for people and basically want to sell their product at no matter what the cost.