Name: Khoirunnida Yasmin

Student ID: 21311338/ Management IP

Subject: Islamic Business Ethics Resume chapter 8

Production and Marketing Ethics

Marketing ethics “is the ethical judgment and standards of behavior in marketing
practice in the field of marketing” (Gaski, 1999). In addition, marketing ethics involves
studying the basis and structure of codes of conduct, standard, and codes of ethics related to
marketing decisions and practices. There are many ethical issues associated with product
strategy. Some companies don't consider and care about the ethical and legal issues in new
products, that's why defective products can be put on the market and these products can be
harmful to consumers. Ethics in production and marketing is something to discuss, because in
fact many individuals still violate consumer rights, especially in the production and
marketing stages. Consumers usually take unethical marketing activities such as false
advertising, intentional sale of harmful products, etc. as unacceptable and often refuse to
enter business relationships with people who have such behaviour. Therefore, marketing
decisions should be evaluated by the position of ethics. Everyone, however, has different
ideas about what is ethical and what is unethical depending on personal ideas and life
experience.

There are 3 views theory in production and marketing ethics. The transaction between
us and the company is like a contract. In this contract, we, as buyers, purchase goods at a
certain price with the belief that the goods we purchase are worth according to the amount we
pay and when both parties agree, then the contract arises. This theory is called The Contract
View aka Caveat Emptor. So, if something happens to the buyer after the transaction, the
seller is not responsible. For example, if the buyer dies or becomes poisoned after consuming
the product, it is the fault of the buyer. However, this view has several controversial
conditions, including:

Parties in the contract must have full knowledge of the agreement in the contract. In
other words, the buyer must know the condition of the product. In fact, most sellers try to
hide flaws or omissions in the products they sell. There must be no misunderstanding or
confusion in understanding the contract. The parties must voluntarily agree, without coercion
by either party.
 The caveat provider can say that the view is the opposite of the previous view. Here,
the manufacturer or the manufacturer is liable if there is a problem with the product. This is
due to the premise that if a buyer buys, manufacturer takes care of it. This view stems from
the fact that producers and consumers have different conceptions of their products. Of course,
the factory makes the product, so they know more about the product. Therefore, if something
goes wrong with the product, it is the responsibility of the manufacturer, not the consumer.
According to this view, the manufacturer is fully responsible for any damage caused by the
products it produces. From this point of view, it has three criteria that manufacturers must
meet to prevent bad cases from happening in their products due to manufacturer's negligence,
that is:

1. The factory is responsible for product design. Manufacturers must ensure that
their products are designed to be safe and pose no danger to buyers. As Aqua uses
plastic packaging.
2. Quality control of the production process. The production process must be done
consistently according to existing standards such as: 4744 B. ISO compliance etc.
So, if Aqua follows this standard and a consumer dies after drinking Aqua, it is
not Aqua's responsibility. Indeed, Aqua follows existing standards and controls
the quality of its products. It also only occurs in 1 in 1 million people. In this case,
in this view, the merchant who purchased the aqua is liable.
3. Manufacturers are required to provide information such as labels, warnings, and
instructions. For example, bottled water often has a warning: "Do not drink unless
the product is sealed." But since the buyer consumes anyway and dies or poisons
himself, Aqua is not responsible and cannot be held responsible but is the
responsibility of the consumer himself.

The drawback in due care view:

1. Lack of a clear way to determine when due diligence or corporate discretion is

performed. ISO and other standards exist, but the word care is still too subjective
to be defined.
2. Manufacturers cannot seem to assume that risks can be identified or detected
before consumers purchase and use their products. Because even if companies
know their products better, that doesn't mean they also know the risks. Those are
two different things. This is because of the uncontrollable situations that can occur
 during the process from factory to consumer. For example, if someone is selling
martava, they may not know that a bad guy poured poison into the barrel to mix
with the paste.
3. This vision is considered too patriarchal. Patriarchism is the idea that a child must
obey his parents 100% of the time and does not have the authority or time to make
his own decisions. In the spirit of due diligence, we, the buyers, do a good job
maintaining the quality of the products manufactured by us and
companies/factories 100% that the information on these products is correct and
100% requires 100% confidence. real intention. Although sometimes companies
do marketing gimmicks.

Social cost view

The social cost or social cost view has the same basic assumptions as the previous,
due diligence view. The distinction, according to this third point of view, is stricter. If from
an appraisal point of view the fault is indeed on the factory, but if it can be proven that the
factory has implemented the 3 standards including design, manufacture, and information,
then the factory can be exonerated from itself. of any fault charged with it. Meanwhile, in
terms of social costs, all responsibility is assigned to the factory without reason. Although the
factory has met the above 3 standards, has met ISO standards, but if consumers are poisoned
or die, the company must be responsible.

KHIYAR

Khiyar is something that is closely related to trading in Islamic teachings. In a

nutshell, khiyar is a buyer or seller's right before making a transaction. In the language,
khiyar means to choose the best. In trading activities, the seller and the buyer have the right
to continue the contract or terminate the contract at the discretion of each party. In other
words, he decides to continue or cancel a transaction based on agreed reasons, according to
Islamic teachings. For example, if a buyer purchases a defective or damaged item, the buyer
has the right to return the product to the manufacturer or seller. Example, if Mr. A buys water
from a street vendor and discovers that the seal on bottle has been broken before he opens it,
Mr. A will not be able to return it to the vendor based on the point of contract because it was
pre-agreed. However, according to Islam, A can return and ask the seller for a replacement.
Here you can see how fair the rules of Islam are. As a hadith in, Prophet sallallaahu'alaihi
wasallam. “A transaction with Khiyar can be made unless both parties die in the majlis
(place) or until both have left the majlis. And if you try to hide a product defect or lie, the
transaction will be revoked."

There are several types of khiyar, which means we can cancel the transaction if one of
these types of khiyar occurs, namely:

1. Khiyal Al Majlis (ie as long as the buyer has not left the place of transaction, then he
has the right to continue or cancel the transaction)
2. Khiyar Ash-Syarat
3. Khiyar Al-’Aib
4. Khiyar At Tadlis Khiyar Al Ghabn
5. Khiyar Fil Ba’I bon Takhyirits Tsaman
6. Khiyar li Ikhtilafil Mutabayi’an