o Primary social values: fairness, justice, health,
Product Safety & Pricing
LIFE CYCLE RESPONSIBILITY
• a.k.a. EXTENDED PRODUCER RESPONSIBILITY
• A business that creates a product must take
responsibility for managing its entire life to prevent
ethical & envi harms from occurring in the design, prod,
distribution, mktg, use, & disposal of product
• Cradle to Grave
o Early Version
o Responsibility from design & creation to the end-
of-life disposal of the product
• Cradle to Cradle
o Recent Model
o until prod is recycled back into the resource pool
• PRO
1. Provide an incentive for manufacturers to design
products that are more easily recycled or reused, less
toxic & last longer
2. By including recycling costs in orig costs of prod, life-
cycle responsibility would also internalize costs that
otherwise would have been passed on to others and
correct for market failures
• ANTI
1. Some existing durable products & components have a
life-cycle that could easily outlast the existence of a
manufacturer
2. Requiring indiv manuf firms to take back dangerous
products increase risk as these products are spread
widely rather than collected in a centralized location
3. Added cost to consumers and the impossibility of
manufacturers’ controlling what a consumer might do
with a product after purchasing it
• To what degree can & should we hold a business
responsible for harms in the creation, use, & disposal of
every component of a particular product?
o Computers, monitors, televisions, cell phones, and
automobiles are commonly and regularly replaced
every few years. Disposal of these products has
proven a real challenge. Electronics often contain
hazardous materials, including lead and mercury.
Neither the typical consumer nor the local trash
disposal facility has the capabilities to properly
dispose of such wastes.
OVERVIEW
• Prima facie ethically legitimate - two parties freely agree
to their exchange
• Kantian Perspective: upholding respect by treating each
other as people capable of pursuing own ends
• Utilitarian Perspective: agreement translates to an
increase in happiness
CONCERNS
• To what degree are participants respected as free &
autonomous agents rather than simply as means to the
end of making a sale?
• Is the exchange voluntary?
• Is the consent informed? (NO lack of info, NO
deception and NO complicated information)
• To what degree does the transaction provide actual as
opposed to merely apparent benefits?
• Impulse buying due to consumerism
• Affluenza: greater consumption can à unhappiness
• Injuries (hidden defects) in the product
• What other values might be at stake in the
transaction?
and safety
• What are the true costs of production?
o Externalities
§ Costs that are not integrated w/in exchange
between buyer and seller
§ Even if both parties receive actual benefits
from the exchange, other parties external to
the exchange might be adversely affected
RESPONSIBILITY
• The state or fact of having a duty to deal with something
or of having control over someone
• Three Senses
1. Cause
2. Liable
3. Accountability
CAVEAT EMPTOR
• "Let the buyer beware"
• Business has only the responsibility to uphold its end of
the bargain by providing a good or service at an agreed-
upon price
• Every purchase was assumed to involve the informed
consent of the buyer and therefore ethically legitimate
• Assumes that consumers adequately understand and
judge products so that they can reasonably be expected
to protect themselves
• If courts were going to assume that consumers had
been given implied warranty of safety, manuf could
avoid responsibility by expressly limiting/denying any
warranty
NEGLIGENCE
• Provides a second avenue for consumers to hold
producers responsible for their products
o Contract Law
§ Responsible only to duties that are taken
explicitly and voluntarily
o Tort Law
§ Responsible to general duties and not to put
others at risk and harm
• Involves a type of ethical neglect: neglecting one’s duty
to exercise reasonable care not to harm other people
• Failure to exercise reasonable care or ordinary
diligence that results in injury to another
o Commission
§ Doing something ought not
o Omission
§ Failing to do that should have done
• Involves the ability to foresee the consequences of our
acts and failing to take steps to avoid the likely harmful
consequences
o hold people liable for future harms they saw
occurring
o unthoughtful people cannot be negligent
REASONABLE PERSON STANDARD
• People are expected to act reasonably and are held
liable when they do not
• Would require people to avoid harms that, even if they
haven’t actually thought about, they should have
thought about had they been reasonable
• A “reasonable” person does what we could expect the
ordinary, average person to do
• Assumes a standard of thoughtful, reflective, and
judicious decision making
• problem: we might be asking more of the average
consumers than they are capable of giving
 • More appropriate when applied to producers than to
consumers ETHICS OF SALES
Advertising and Product Placement
STRICT PRODUCT LIABILITY
• Focuses on the performance of the product itself and The main goal of marketing is SALE
not on the negligence of the people involved Achieved with the use of:
• “Product accountability” • Promotion
• Harm can occur through accidents o attempt to influence buyer to complete a purchase
• Main question: • Placement of Products
o “Who will be liable for harm caused by these o Seeking to determine w/c audience is most likely to
accidents?” buy and/or is most likely to be influenced by promo
§ Producers
• 3 options for accountability: Ethically good and bad ways to influence market exchanges
o Consumer that respect individual autonomy and liberty are ETHICAL
§ “tough luck” 1. Persuading
o Society 2. Asking
§ generally accountable 3. Informing
o Producers 4. Advising
§ McCall: not as costly and won’t generate
much lawsuits Ethical good and bad ways to influence market exchanges
• McCall: that violate individual autonomy are UNETHICAL
o Injuries are externalities that fairness requires 1. Threats
§ These should be paid for by those who 2. Coercion
benefit from the exchange 3. Deception
o Understands this as a process of compensation 4. Manipulation
than a liability 5. Lying
• Producers are not always liable
• Manufacturers can also be exempted MANIPULATION
• Some products are inherently dangerous • To guide or direct someone or something’s behavior
w/o their explicit consent or conscious understanding
ETHICS AND PRICING • KANTIAN TRADITION
• General ethical concerns as guiding principles o When manipulate someone, I treat them as a
1. Respect for individual autonomy means to my own ends as an object > autonomous
2. Provision of actual benefits to the parties involved person
3. Values other than served by the exchange itself • UTILITARIAN TRADITION
• Buyer – Fair Price – Seller o Offers a more conditional critique towards
1. Respect for Individual Autonomy manipulation
o Lack of informed consent o It can destroy bonds of trust, respect between
§ Price gouging people lessen self-confidence and hinder the
§ Monopolistic pricing development of responsible choice making
§ Price fixing o utilitarians are inclined to think that manipulation
o A price is fair if there is: lessens overall happiness
§ Consumer freedom
§ Available competition DECEPTION
2. Actual Benefits for All • To manipulate through false or misleading information
o Low prices are not always better • An outright lie
§ Small businesses against large competitors • occurs when consumers are tricked
• More competitive local economy
3. Values Other Than the Exchange Itself Marketing research targets the considered & rational
o Fairness and equal opportunity desires of consumers; targeting the fear, anxiety and whims
§ Small businesses
§ Retails and suppliers Regulating deceptive and unfair sales and advertising
o Predatory pricing
§ Price of a product is lower than actual costs TYLENOL ADVERTISEMENT (JOHNSON & JOHNSON)
to drive out other businesses • “Last year, hospitals dispensed 10 times as much
o Social costs Tylenol as the next four brands combined”
§ High prices in the long run • “Hospitals recommend acetaminophen, the aspirin-free
o Political costs pain reliever in Anacin-3. more than any other pain
§ Government subsidies reliever.”
• Johnson & Johnson, the manufacturer of Tylenol, was
supplying Tylenol to hospitals at a greatly reduced cost
• American Home Products, the manufacturer of Tylenol,
Advertising & Target Marketing was supplying Tylenol to hospitals at a greatly reduced
cost
Different Types of Advertising Methods • American Home Products, the manufacturer of Anacin-
1. Print Advertising 3, did not disclose in their ads that the particular brand
2. Outdoor Advertising of acetaminophen that hospitals would recommend
3. Digital Advertising more than any other was Tylenol
4. Mobile Advertising
FEDERAL TRADE COMMISSION (FTC)
• regulating deceptive and unfair marketing practices
• Consumers are harmed by deception when they end up
purchasing product they did not intend to buy
Generic brands are widely available to the public and are
cheap but high cost brands are bought over generic brands.
This is because of the effectiveness of advertising.
DECEPTIVE MARKETING
• Intention of deceiving people in order to manipulate
their buying behavior
o Is to treat them as a mere means to one’s own
ends. (Johnson & Johnson)
o Focused on the marketing practices that actually
deceive. (Old Frothingslosh)
• It really depends on the consumer either being
reasonable or relatively ignorant
IVAN PRESTON
• Threatened a lawsuit over a beer
OLD FROTHINGSLOSH
• “The pale stale ale for the pale stale male”
• The only beer with foam on the bottom
REASONABLE CONSUMER STANDARD
• Is the most fair and reasonable
• RCS would be to create and apply the optimum
standard for each product, marketing practice and/or
target market creating a standard for only certain
products and not create a generic standard for all.
• It assumes the best about consumers and doesn’t hold
marketers to an extreme standard BUT
• It abandons the protection of consumers who deserve it
MARKETING ETHICS AND CONSUMER AUTONOMY
• People may well benefit from businesses’ marketing of
their products.
• People learn about the products.
• There can be indirect and direct influence of marketing.
CONSUMER AUTONOMY
• Dependence Effect
1. Creation of wants stands the law of supply and
demand on its head.
2. Creation of irrational and trivial consumer wants,
which distorts the economy.
3. Creation of consumer wants violates consumers
autonomy
- John Kenneth Galbraith, 1958
• AUTONOMY – involves making reasoned and voluntary
choices
Advertising Consumer Autonomy
Does advertising control consumer behavior?
Psychologically speaking, yes..
AUTONOMOUS DESIRES
• Behavior is not controlled as much as our autonomous
desires are.
• Advertising creates wants & desires of consumers.
o “Why do you buy the things you buy?”
o People buy things for many reasons – desire to
appear fashionable, for status, to feel good & so
forth.
•
NON-AUTONOMOUS DESIRES
• desires that are not voluntary and we do not freely and
rationally choose.
o example: a drug addict who desires more heroin,
alcoholic person wants another shot
• Some think that these desires can originate from
advertising.
o Advertising provides info from which we can learn
and on the basis of which we can freely choose to
desire something.
FIRST-ORDER DESIRES VS. SECOND-ORDER DESIRES
First-Order
• Those wants that happen to have at any given time.
Second-Order
• These are desires about desires, desire to change the
process
• Why do I want what I want? Do I really want this?
• This ability to step back is a central component of
autonomy because it is an essential part of rational
decision making
Autonomous Desires
• desires that are not rejected upon reflection.
Does advertising create nonautonomous first-order wants?
• Robert Arrington said NO. But advertising might control
behavior or produce compulsive behavior.
• “Marketing influences us by appealing to independent
desires.”
• ADVERTISING DOES NOT VIOLATE AUTONOMY
GERALD DWORKIN
Conditions for Autonomous Desires
AUTHENTICITY
• It is not renounced by the person who has it.
• Ex: I desire revenge on someone frm motivation of
jealousy.
• Revenge is authentic so long as I don’t desire that I
don’t need to be so jealous.
INDEPENDENCE
• Authenticity is not sufficient. It must also be
independently accepted by the individual.
• Ex: Might be due to the fact that I have never thought
about my jealous personality in a calm and thoughtful
manner.
THERAPEUTIC SHOPPING
• To feel better
• As a response to depression
• Entertainment
• It makes them feel good or they like it
Some consumers do not act in self-conscious and reflective
way.
• Marketing may be responsible for this.
• Marketing exploits those with diminished capacity to
reflect.
RICHARD LIPPKE
• Autonomy as a long term capacity, more a matter of
degree than something that characterizes any specific
act or desire. Advertising undermines consumer
autonomy
TARGETING THE VULNERABLE: MARKETING AND
SALES
EXAMPLES OF TARGET MARKETING
1. Market Research supplied by the manufacturer
• Single woman
• Under 35 years old
• College educated
• Annual income: $300,000 to $400,000
• Enjoys outdoor sports and recreation
2. Selling an emergency call device to elderly widows
who live alone.
• Elderly woman
• Targeted elderly women and their families

Question: Are these marketing campaigns on an equal

ethical footing?

1st Example
• Considered judgments
• Similar beliefs, desires, and values
• Make similar judgments about consumer purchases
• Identifying likely customers based on common beliefs
and values

2nd Example
• Exploiting the real fear and anxiety
• Nonrational factors such as fear or anxiety

CONCEPT OF VULNERABILITY
Vulnerability
• “To be vulnerable is to be susceptible to some harm.”
• A person is vulnerable if there is some factor that
predisposes that person to a greater risk of harm than
what is faced by others.

GENERAL SENSE OF VULNERABILITY

Consumer Vulnerability
• Impaired ability to make an informed consent to the
market exchange
• Harm of not satisfying one’s consumer desires
• suffering the financial harm of losing one’s money.
General Vulnerability
• Physical, psychological, or financial harm
• Harm is other than the financial harm of an
unsatisfactory market exchange.

Are these examples ethically legitimate? For initial

judgment, unethical

“Marketing targets population not individuals”

• Marketers cannot be held liable for decisions that any
individual makes because any individual may choose
not to buy the marketed product.

“An individual salesperson deals not with a general

population but with individual customers.”
• Usually deal directly w/ indiv customers, we can
assume that the choice of sales strategy is based on
a salesperson’s judgment

UNETHICAL DECEPTION
Marketing
• Unintentional
• Unintended
• Targets population > individuals
Sales
• Rely on deceptions
• Salespersons have a choice to stop the sales pitch
• Better positioned to avoid manipulation and deception