Chapter 7
Chapter 7
Chapter 7
Price
Predatory pricing (which undercuts the
competition unfairly)
Price discrimination (charging more to some
customers than others)
Misleading prices
Price fixing (with other competitors)
Introduction
Promotion is the most visible face of
marketing and for this reason it draws the
greatest moral scrutiny
Promotion
Sales techniques
Deception and manipulation in advertising
Direct marketing – spam
Introduction
Distribution
Anticompetition practices
Controlling the channels of distribution
Paying so-called slotting allowances for shelf space in
stores
Marketing
Others
Agreeing to pay kickbacks or outright bribes with or
without the company’s knowledge
No close supervision
Misrepresent their work
Pad their expense account
Cheat their employers
Sales Practices
Deception: -
Consumers are led to hold false beliefs about
a product
Knowingly make a false statements
Sales Practices
Examples: -
‘Special sale’ ends today but fail to add that another ‘special
sale’ will begin the next day
Markdowns from ‘suggested retail price’ that is never charged
Introductory offers
Bogus clearance sales in which inferior goods are brought in for
the ‘sale’
Packaging and labeling - size or shape of a container, a picture
or description
‘Economy size’
‘new and improved’
Warranties that cannot be easily be understood by the average
consumer
Sales Practices
Manipulation: -
No false or misleading claims
Taking advantage of consumer psychology to make a
sale
Sales Practices
Examples: -
“bait and switch”
A consumer is lured into a store by an advertisement for a
low-cost item and then sold a higher-priced version
Often the low-cost item is not available
Sales Practices
Price discrimination
Predatory pricing
Pricing
Unfair pricing
Unconsciously high prices (price gouging)
Misleading prices
Distribution