NAME: Cher Angeline R.

Rodriguez
YEAR AND SECTION: 2BAF-A

Mini Case Study:

Talent and Profit a right way to Success?

Peter is a talented baker and he owns a bakery. He discovered a secret ingredient of a delicious
and healthy bread. Since it’s one of a kind in the community he sells it double with a 100%
return investment (ROI).

Peter sells a loaf of bread for two hundred pesos against his cost of one hundred pesos to
produce it. This shows that a combination of his talent, skills and discovery, Peter have
produced a revolutionary product and that his consumers are willing to buy at a premium price.
This made a great impact in the success of Peter to gain more profit.

Question 1: With this scenario, is it Peter is doing the ethical or unethical way of making profit?

Personal View

Peter discovered a secret ingredient of a delicious and healthy bread. If I were one of the
consumers who is willing to pay for it in a high price, I think it is not unethical for him to do it. It
states in the situation that he is the only one who sells that kind of bread that people do not
take consideration the costing of the product. It is because people achieve the satisfaction, and
the product adds value to them individually. According to Ellsworth (2019), if you are doubting
about the ethical and legal issues about pricing of a product, you put yourself in customer’s
shoes. In most of the time, unethical pricing happens when your pricing is for yourself to hurt
the competition, skirt the rules of the nation, or discriminate and deceive consumers. On the
contrary, prices are ethical when they are done with customers’ best interest in mind or price
decisions are based on market conditions. In this condition, people praise the product, and the
product might have the quality they seek for the product. Legally speaking, in our country,
Peter does not disobey the law. In Republic Act No. 4164, entitled “An Act to Prevent the
Excessive Increase in the Price of Certain Prime Necessities of life on the Occasion of a Public
Calamity, Penalizing the Violation Thereof, and for other Purposes.”

Religiously speaking, I would say that Peter’s pricing is just and fair if and only if will be based
on the consumer’s reaction to the product. Since people do not look on the actual cost of the
product to produce but do care about the level of trust, branding, transparency, and level of
customer service, it proves that cost of the bread is fair to its value for the consumers.
According to Chafuen (2003), “the price of goods does not depend on their nature but on the
extent to which they serve the needs of mankind…the Late Scholastics posited the idea that the
value we place on goods depends on the utility we derive from them.”.
Conclusion

In conclusion, the price of the product for the consumers are not merely based on the cost of
producing it but rather its perceived value and other factors such as quality, customer service,
etc. Unethical pricing may occur when people are not satisfied to value, they receive from it or
they did not receive the same value as how much they pay for. In this scenario, people praise
Peter’s bread because of his talent, discoveries, and also he gives what these people demand.

Recommendation

I recommend that Peter should do a program wherein he gives back to the community. Since he
prices the product double the cost of producing it, maybe he can have a proportion from his
sales to help his community even in the smallest idea possible. It is a win-to-win situation for
him and to the buyers because he obtains big profit and people consumes quality and
demanded product. At the same time, the buyers receive more as a little give back from Peter.

Citation

Business view: Matt Ellsworth | October 1, 2019- retrieved from https://blog.wiser.com/5-

unethical-pricing-pitfalls-to-avoid/

Religious view: https://tifwe.org/the-myth-of-the-zero-sum-game/

Legal and other view: An Act to Prevent the Excessive Increase in the Price of Certain Prime
Necessities of life on the Occasion of a Public Calamity, Penalizing the Violation Thereof, and for
other Purposes. 1992. Retrieved from officialgazette.gov.ph