Chapter 17 Ethical and Legal Responsibilities of Sales Managers

12/7/2010
Chapter 17
Ethical and Legal Responsibilities
of Sales Managers
The likelihood of unethical behavior is
directly proportionate to the size of the
carrot.
Michele Marchetti
Fig. 17-1 Evaluating the Ethical
Status of a Business Decision
• Questions to help a sales executive evaluate the ethical
status of proposed actions:
– Is this sound from a long-run point of view
– Would I do this to a friend
– Would I be willing to have this done to me (The
Golden Rule)
– Would I want this action publicized in national media
– Would I tell others about it
– Who is damaged by the action
Fig. 17-2 The American Marketing Association’s
Code of Ethics
• Professional Conduct
Marketers’ professional conduct must be guided by:
• The basic rule of professional ethics: not knowing to do harm;
• The adherence to all applicable laws and regulations;
• The accurate representation of their education, training and experience; and
• The active support, practice and promotion of this Code of Ethics.
• Honesty and Fairness
Marketers should uphold and advance the integrity, honor and dignity of
the profession by:
• Being honest in serving consumers, clients, employees, suppliers,
distributors and the public.
• Not knowingly participating in conflict of interest without prior notice to all
parties involved; and
• Establishing equitable fee schedules including the payment or receipt of
usual, customary and/or legal compensation for marketing exchanges.
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Fig. 17-2 The American Marketing Association’s
Code of Ethics
• Rights and Duties of Parties in the Marketing Exchange Process
Participants in the marketing exchange process should be able to expect
that:
• Products and services offered are safe and fit for their intended
uses;Communications about offered products and services are not
deceptive;
• All parties intend to discharge their obligations, financial and otherwise, in
good faith; and
• Appropriate internal methods exist for equitable adjustment and/or redress
of grievances concerning purchases.
Laws and Regulations
Affecting Sales Executives
• Price discrimination
– Clayton Antitrust Act (1914) and Robinson-Patman (1936)
• Unfair competition
– Bribes
– Misleading information (about products, competitors)
• Green River Ordinances
– Enacted by many cities to regulate door-to-door salespeople from
firms located outside the city
• Cooling-Off Laws
– Protects consumers requiring a time period (usually 3 days) to
cancel contract, return merchandise for refund.
Illegal Sales Practices
• Granting price concessions that are not justified or that
are not necessary to meet competition
• Making false claims about your product and the services
that accompany your product
• Representing a product to be new when it is rebuilt or
second-hand
• Misleading customers into thinking they are getting a
bargain when this is not the case
• Bribing customers’ employees in order to acquire or
hold an account
• Using bribery or espionage to learn a competitor’s trade
secrets
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In Conclusion
• Unethical and Dishonest Behavior is not the
Norm
• Unethical and Dishonest Behavior will yield
short-term gains
• As a Salesperson and a Sales Manager your
“good word” and your “good name” are the
most valuable assets you have. Develop them,
nurture them, and use them wisely. Once they
are lost finding them again is a long, slow,
painful process.
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