Incredible Shrinking Potato Chip Package

Julie has been concerned about the profitability of the various items in her line of potato chips. According to her
potato suppliers, the recent drought caused a 35 percent reduction in the potato crop compared to one year ago,
resulting in a 25 percent hike in potato prices to large buyers like Julie’s company. Potatoes accounted for almost
all of the content of her chips (which also consisted of vegetable oil, one of three different flavoring spices, and
salt), plus there were packaging costs. To hold the line on margins, which of late had been slim at only about 5
percent due to fierce competition from several other local and regional brands, Julie would need to raise potato
chip prices about 15 percent. On her most popular 7.5 oz. size, which had a price spot of $1.59 on the package, this
would require a price hike of $.24, bringing the price up to $1.83.

Julie wondered what would be the appropriate strategy to deal with this unfortunate circumstance. She was very
reluctant to raise the price to maintain the margin. First, she feared incurring the bad will of her loyal customers; it
wouldn’t be perceived as fair by them. Moreover, she was worried about competitive responses; her other larger
competitors might be willing to incur a loss in the short-run to keep their customer bases and to attract price-
hiking rivals’ customers. Julie couldn’t afford such a strategy since she was evaluated solely on the basis of monthly
net profits. Historical data in this industry revealed another possible competitive maneuver in the face of rising
ingredient costs: hold the line on prices and package size while reducing the net weight of the package.

Julie was concerned that this might be a deceptive practice. She recalled from a Consumer Behavior course she
had taken in college a concept known as the “just noticeable difference.” This said that relatively small changes in a
stimulus (such as a price hike or content shrinkage) go unnoticed by consumers. Julie felt intuitively that the price
increase necessary to maintain margins would be noticed, given the price sensitivity of buyers for snack foods.
However, the past industry data suggested that perhaps buyers might not notice the package size reduction
needed to sustain profits, which in this case would be 1.1 ounces.

Julie asked her boss, Dave, the Marketing Director, about the advisability of reducing the net weight of the potato
chips. Dave said that this was a practice known variously as “downsizing” and “package shorting.” It was a very
common practice among packaged goods manufacturers. For instance, he said, candy bar manufacturers are
subject to constantly fluctuating ingredient prices, and because there are expected (“fair” or “reference”) prices for
candy bars, package sizes are frequently adjusted without informing consumers. Jim said that was a nonissue since
marketers have been above board in labeling products accurately as to weight, serving size, price, and quantity.
Furthermore, the Food and Drug Administration had no laws against the practice. Dave recommended downsizing
the potato chips, but he made it clear to Julie that the ultimate decision was up to her. Julie still had her doubts.
After all, it would seem that consumers who are in the habit of buying a particular product size generally don’t
scrutinize the net weight label on subsequent purchases. If this were true, it seemed to Julie that downsizing would
be a deceptive practice.

GUIDE QUESTIONS

1. Discuss the relevant of the facts (What are the issues?)

2. What actions should Julie take to solve the problem?
3. Do you think it’s necessary to take the advice of Dave to reduce the net weight of potato chips? Yes or No,
explain.
4. Do you think it’s possible to lessen the content of the product at the same time to change the price?
(Defend your answer)
5. Do you believes that consumers don’t usually examine the net weight label on subsequent purchases? Yes
or No, explain.
 Justifying Price Increases

Last year Sam was promoted to manager of marketing research for the sole television station in a small
metropolitan market. Sam had earned a bachelor’s degree in marketing research three years earlier and
immediately accepted an entry-level marketing research position at the television station because its
management had a reputation for honesty and helping small businesses gain access to the mass media.
The television station was sold six months ago to an international conglomerate. At that time, the
general manager was replaced by John. John has developed a reputation in the industry of raising
revenues and cutting costs.

John just finished reviewing the policies of the former general manager and noted that, although the
cost of servicing the numerous small business accounts was high, the profit margin on these accounts
was about the same as for large business accounts. John decided that revenues and profits could be
increased by 20 percent simply by charging small business accounts proportionately more for television
air time. John calls Sam and wants him to conduct a survey that would guarantee data that would justify
his price increase.

Sam is dismayed at the prospect of conducting such research. In his college coursework, Sam had
learned the importance of conducting objective, unbiased research studies. Furthermore, Sam had won
a national competition with his senior marketing research project. Through the first two years with the
television station, Sam was consistently complimented by the small business owners that he worked
with for his integrity in conducting research studies. It was this work and these compliments that led to
his promotion to manager of marketing research.

After Sam got off the telephone with John, he stared into space and pondered his dilemma. Jobs were
not readily available in the town, and he did not wish to relocate elsewhere. Yet if he produced the data
that John wanted, it would go against his training and pride in conducting proper research studies. And
what about all of those small businesses that have come to rely on the television station for their access
to the mass media? How many would be able to pay the higher price for television air time?

GUIDE QUESTIONS

1. Discuss the possible issues in the case.

2. What should Sam do?
3. Which alternative would you select if you were in Sam's shoes? Why would you pick this
alternative?
4. Regardless of what Sam does in this situation, how can he prevent this situation from arising in
his future employment, whether at the television station or elsewhere?
 The Nonuser Celebrity Endorser

Annie, copywriter for Laird & Laird (L&L) Advertising, has just been assigned the Bud’s Best (BB) bacon
account. She is tickled pink, because she knows that Bud’s Best has just signed a one-year contract to
use Lance Willard as a celebrity endorser. Lance is a well known, well loved, young, handsome, and
vibrant Hollywood movie star who specializes in action drama roles. Victor, President of L&L, tells Annie
that she will be writing commercials using Lance in the role of giving product testimonials. Victor
explains to Annie that this endorsement is a testimonial given by a celebrity rather than an average
consumer. He tells her that Lance has signed an affidavit swearing that he is a bona fide user of the
product, as is legally required. The TV commercials featuring Lance, explains Victor, should feature Lance
testifying as to the quality, value, and tastiness of the bacon. Victor suggests that this will take some
good acting on Lance’s part, since he has just recently become a vegetarian. Annie wonders whether a
testimonial by Lance might not be dishonest, but she says nothing to Victor since she doesn’t want to
blow her opportunity to meet Lance in person. She figures she can get all of the details later from Lance.

Lance turns out to be as charming in person as he is on the silver screen. After some small talk, Annie
decides to query Lance about his experience with Bud’s Best. Lance explains that he has had personal
experience with the product, as is legally required for a testimonial. He tells her that he has done many
celebrity endorsements in the past and knows that the American Advertising Federation's “Advertising
Principles of American Business” state that “advertising containing testimonials shall be limited to those
of competent witnesses who are reflecting a real and honest opinion or experience” and that as long as
the endorser’s comments are based on verifiable personal use, the message cannot be challenged as
deceptive. In fact, he says, it has been his favorite brand of bacon ever since he was a small child, and
bacon and eggs were his favorite and most frequently consumed breakfast until about a month ago
when he became a vegetarian for health reasons. Lance tells Annie that a recent checkup by his
physician revealed that his cholesterol level was 200--in the danger zone. His doctor had warned Lance
to cut down on high cholesterol foods, such as bacon and eggs. Lance decided to go even further and
abstain from meat since so many meats are high in cholesterol.

Annie asks Lance diplomatically whether he feels comfortable testifying about how much he likes Bud’s
Best bacon when he no longer uses the product. Lance replies that his conscience is clean. He has
discussed the legalities with Victor, who told him that technically it was okay for him to discuss his past
enjoyment of the product. After all, Lance reminds Annie, the selling points he would discuss in the
commercials would be the bacon’s quality, value, and good taste. Lance explains that in his view, as far
as bacon goes, Bud’s Best is second to none along these criteria. He tells Annie that nothing regarding
the bacon’s healthiness, or lack thereof, will be mentioned. As long as people are going to eat bacon,
Lance asserts, they might as well eat Bud’s Best.

GUIDE QUESTIONS

1. Is it deceptive to use Lance as a celebrity endorser given that, although in the past he used and
preferred the product, he no longer does because he believes it is unhealthy?
2. Is it ethical to promote a product which potentially poses a health hazard to at least some
consumers?
3. How can Annie resolve the dilemma caused by the clash between her personal view as to what is
honest, the nature of the campaign, and what the law apparently allows?
 4. What are the possible alternatives to solve the problem.

Life Insurance: Who Benefits, the Consumer or the Company?

Mark is a sales representative for a large life insurance company. He has been with the company for
about 18 months. Things have been going well, or so he thinks. One concern he has is about the product
he sells most.

This product is an insurance and savings plan bundled together. It provides protection for premature
death, savings that can be used for retirement, or an emergency fund that can be accessed quickly
without hassle.

The problem Mark faces is that this insurance product is more expensive to purchase, and for young
families it provides the least amount of protection in case of premature death of the breadwinner.
Another drawback is the low return on savings, somewhere between 3 percent and 6 percent net. The
company pushes sales of this product because it is more profitable. The commission Mark earns is 110
percent of the first year’s annual premium, so it is very profitable for him and his family.

Mark also has another product that is considerably cheaper, that can provide much greater insurance
protection, and at the same time would let the insured invest the difference in another product (i.e., an
annuity) that provides a greater return. But the commissions paid by the company are very low, and
management frowns on too many of these policies being sold.

The quandary is: If Mark does what is right for the consumer, he can’t provide for his own family; if he
sells the more expensive insurance product, then the protection doesn’t come anywhere near meeting
the needs of the family should the breadwinner die prematurely. What should Mark do?

GUIDE QUESTIONS

1. What actions should Mark take?

2. Which alternative would you choose in Mark’s position, and why?
3. What rights do salespeople have with respect to the integrity of the products that they present
to consumers?
4. What are the possible alternatives to solve the problem?
 The Speedy Sale

Bernie is very interested in buying a color television. He tells Sam, the salesperson in the discount store
where he feels he can get the best buy, that his old color TV recently died and he really misses seeing his
favorite shows. The sooner he can buy and get a new TV delivered, the better, he explains. Sam knows
that the particular model which Bernie seems to prefer by far to the others will go on sale for 15 percent
off in three and a half weeks. However, he assumes that Bernie is not willing to wait that long and might
look elsewhere. Also, Sam will not make as much commission on the reduced price. Therefore, he
reasons that it would make little sense to inform Bernie of the pending sale.

When Sam tells Bernie that the TV set he is interested in is currently out of stock and will not be in for
another week, Beanie is dearly disgruntled. Fearing losing the sale, Sam goes out to the back room to
ask his sales manager, Michelle, if anything can be done to speed up delivery. Michelle says that this
would be impossible, and she suggests that Sam could tell Bernie that the store can get the set within 24
hours and simply sell him the demonstration model. Michelle explains that the demo is in as-new
condition and Bernie will never know the difference.

Sam feels that selling the demonstration model to Bernie wouldn’t be on the level. Knowing that it will
take five working days to have a new set delivered to the store, Sam thinks of a different sales strategy--
tell Bernie he can get a set to him in two days, then call Bernie tomorrow to say it will be sometime next
week due to a flood of orders at the factory. Sam wonders how he can lock in the sale today.

GUIDE QUESTIONS
1. What is the seller’s duty to inform the buyer of all conditions of the sale?
2. Is it fair for a seller to make promises to a buyer that he can’t keep?
3. Does a salesperson have a responsibility to his superior to make a sale, even if it might mean
compromising his own ethics?
4. To whom is the salesperson’s primary responsibility: the customer, himself, his manager, or the
company?
5. What sales practices are necessary for building trust and long-term relationships with customers?
 Inside Information

Tom Jones has recently joined the sales force of Wood Truss, a manufacturer of wooden structural parts
for commercial buildings. Large contractors issue requests for bids for a bill of materials required to
construct a commercial project. Tom’s job includes reviewing the bill of materials and developing his
firm’s bid.

Tom’s new boss, Mark Smith, gave Tom a request for bids from Strong Built, a commercial contractor.
The request involved the construction of a 300,000 square foot warehouse. Tom immediately set about
costing out the materials specified in the bill.

The day before the bid was due, Mark came in and handed Tom two brown envelopes. Mark said the
envelopes, which contained copies of the bids from Wood Truss’s two main competitors, had just been
received from their inside man at Strong Built. He also said that the Wood Truss bid must be just under
the lowest bid from the competition. Wood Truss was always the lowest bidder on major jobs;
competitors were allowed to win a few of the smaller jobs so as riot to arouse suspicion.

When Tom protested that using the information was not right, Mark said that this is the way things are
done in the construction industry. The firm with contacts stays in business. He said Tom is now working
for a winner and should be glad that he signed on with the right company

GUIDE QUESTIONS

1. What actions should Tom take?

2. Does inside information destroy the fairness of the competitive bidding process?
3. Can Tom avoid using the bid information and still comply with Mark’s orders to be the low
bidder?
 Affirmative Action vs. Client Wishes

After graduating from college, Jennifer tried repeatedly to secure an Account Executive position in an
advertising agency. Finally, after two years of working as a receptionist and “go-fer” at the XYZ
Advertising Agency, she got a highly sought-after job as a junior Account Executive Trainee at the same
agency. It is now three years since Jennifer started her current job.

Sharon (the Account Executive with whom she works) has just made a major sales presentation for the
ABC Client Company account. XYZ Advertising is a small agency, and top management (Mr. Hurn) feels
this account is essential to XYZ’s ability to retain its employees and remain financially solvent. In fact, the
agency has lost its two most important accounts in the last year and will have to lay off half of its
employees if the ABC account is not secured.

The day after the presentation, Mr. Bohlen, Director of Advertising at ABC, calls Mr. Hurn to inform him
that XYZ Advertising Agency has the ABC account if the television advertisement presented in
yesterday’s sales presentation is changed. Specifically, Mr. Bohlen wants the two African-American
actors in the advertisement replaced with two white actors.

His reason is that the advertisement is superb, but the African-American actors will offend his target
market. Mr. Hurn agrees to this request. He hangs up the telephone, calls Sharon and Jennifer into his
office, and informs them of the need to recast/replace the actors. Sharon refuses. Although tests of the
advertisement show that the target market is uncomfortable with the actors’ race, she feels it is wrong
to change this advertisement. She feels that more African-Americans in general should be in television
advertising.

After two hours of discussion, with Jennifer in the room, Mr. Hurn informs Sharon that she is fired for
insubordination. He then turns to Jennifer and tells her that she can replace Sharon (which is a
promotion to Account Executive). “Of course,” Mr. Hurn states, “you must recast the commercial as I
have asked, or you, along with Sharon, will be released from this company due to insubordination.”
Jennifer, who has wanted to be an Account Executive ever since her freshman year in college, is torn.
Her decision is complicated by her strong belief in affirmative action, the general scarcity of jobs due to
a poor economy, and the fact that Account Executive positions rarely become available. Furthermore,
she is already behind in her student loan payments.

GUIDE QUESTIONS

1. To what extent is Jennifer responsible for promoting affirmative action?

2. Does she have an obligation to speak up when she believes marketing is promulgating an inferior role
for African-Americans in society?
3. Should she be concerned with her boss’s immediate agreement to such a request by a possible client?
4. Does Jennifer benefit more or less by refusing the offer for the new position? By accepting it?
5. Is there a difference, in regard to long-term versus short-term benefits/burdens, if Jennifer takes the
position? If she does not take the position?
 Inside Information

Tom Jones has recently joined the sales force of Wood Truss, a manufacturer of wooden structural
parts for commercial buildings. Large contractors issue requests for bids for a bill of materials required
to construct a commercial project. Tom’s job includes reviewing the bill of materials and developing
his firm’s bid. Tom’s new boss, Mark Smith, gave Tom a request for bids from Strong Built, a
commercial contractor. The request involved the construction of a 300,000 square foot warehouse.

Tom immediately set about costing out the materials specified in the bill. The day before the bid was
due, Mark came in and handed Tom two brown envelopes. Mark said the envelopes, which contained
copies of the bids from Wood Truss’s two main competitors, had just been received from their inside
man at Strong Built.

He also said that the Wood Truss bid must be just under the lowest bid from the competition. Wood
Truss was always the lowest bidder on major jobs; competitors were allowed to win a few of the
smaller jobs so as riot to arouse suspicion. When Tom protested that using the information was not
right, Mark said that this is the way things are done in the construction industry. The firm with
contacts stays in business. He said Tom is now working for a winner and should be glad that he signed
on with the right company.

GUIDE QUESTIONS

1. Can Tom avoid using the bid information and still comply with Mark’s orders to be the low bidder?
2. Should Tom be concerned about using the competitors’ bid information, seeing that it came from a
Strong Built employee?
3. Does using the information put Tom and/or his company in jeopardy?
4. If everybody in the construction industry acts this way, should Tom?
5. What actions should Tom take?
 The Pizza Puzzle

George Hansen is General Manager for the Marigold Inn in Augusta, Georgia. Sharon Coombs is
Restaurant and Food Services Manager for the Inn. She reports to George. Two years ago, Sharon
noticed a decline in room service business, the highest margin portion of her operation. This decline
coincided with an increase in the national sales of pizza delivery and carryout firms as well as an
increase in the number of empty pizza boxes from these firms being left in guest rooms in the Inn. Her
immediate response was to install a pizza oven in the kitchen and offer room service pizza to guests.
The effort met with modest success, though it was well below her expectations. Questionnaires
completed by departing guests revealed a problem of product quality.

Focusing on this problem, Sharon improved the Inn’s pizza until blind taste tests judged it at least
equal in quality to the products of the two major pizza delivery competitors in Augusta. Sales did not
improve, convincing Sharon that the problem was a perceived mismatch between the hotel’s image
and guests’ expectations of pizza makers. Guests simply did not seem to believe that the traditional
steak and seafood restaurant at the Inn could make a high-quality, authentic pizza. Based on this
conclusion, Sharon presented the following proposal to George:

“Sales of room service pizza are stagnant due to guests’ misperception that our product is lower in
quality than that of competitors. This misperception is based on the belief that until we disassociate
our pizza from the Marigold Inn name. Therefore, to capture more room service pizza business, we
should create a ‘Napoli Pizza’ image for our guest room delivery service by:

• Preparing ‘Napoli Pizza’ brochures for each guest room, complete with a phone number with a prefix
different from that of Marigold Inn. The number will reach a special phone in room service, which will
be answered, Napoli Pizza, authentic Italian pizza from old, family recipes.’
• Using special ‘Napoli Pizza’ boxes for delivering room service pizza to guests.
• Issuing ‘Napoli Pizza’ hats and jackets to room service personnel for use in pizza delivery. Room
service waiters and waitresses will wear these garments to deliver pizza. They will change to their
regular uniforms for other deliveries.”

GUIDE QUESTIONS

1. Is the proposed marketing program for “Napoli Pizza” deceptive?

2. Does the proposed marketing program respect guests’ right of free consent?
 ANOTHER TYPE OF DESCRIMINATION

Paula is a Brand Manager at a large consumer goods company. The position is one that Terry aspires
to. Paula has spent the last six months working on an important new marketing plan for a floor
scrubbing soap. Paula’s superior has approved the plan and believes that successful execution of it
would likely result in Paula’s being promoted to a different, more desirable product line.

It bothers Terry that the marketing plan calls for the product to be associated with a series of
spokespersons who are physically unattractive. She feels this plan promulgates a stereotype which
results in discrimination that hurts people born with lower physical attractiveness. Paula (a very
physically attractive young woman) feels strongly that persons of less physical attractiveness are the
most credible for this product. In fact, Paula supports this notion with a specific article in a top
marketing journal. The article reports empirical evidence showing that it is financially advantageous to
use physically unattractive spokespersons when marketing mundane products (such as those for
cleaning and cooking) and to use physically attractive spokespersons when marketing glamorous
products (such as perfumes and [clothing]).

For a special college project, Terry had reviewed over 1,000 scientific studies pertaining to “the
physical attractiveness phenomenon.” She found ample documentation showing discrimination that is
subtle, pervasive, and powerful. Specifically, attractive people are valued more by society than are
those who are unattractive. She found that unattractive people are disadvantaged in employment,
education, and throughout life. The differences are internalized, resulting in lower self-esteem,
inferior social skills, and higher blood pressure. Other results include a significant role in the increase
of eating disorders (bulimia and anorexia) as well as cosmetic surgery by people who often cannot
afford it. Recently, Terry has read that this discrimination is becoming an increasingly important social
issue with new developments that include boycotts and lawsuits.

Terry, a marketing major in college, has long been disturbed by marketing practices that promulgate
the physical attractiveness phenomenon. For example, she has noticed that when comparative
advertising is used, a physically attractive person is combined with the “right” product or the right
choice and a physically unattractive person with the “wrong” product or choice.

GUIDE QUESTIONS

1. To what extent is Terry responsible for alerting the company about an increasingly important social
issue that many experts are expecting to develop into boycotts of products and companies in the
future, and possibly even result in related lawsuits?
2. Does Terry have an obligation to speak up when she believes marketing is promulgating an inferior
role for those people born with lower physical attractiveness?
3. Which possible alternative provides the greatest benefit to the greatest number of people/entities?
4. Do the benefits outweigh the financial costs to the company which, if the marketing plan is not
changed, is expected to be successful (as a result, in Terry’s opinion, of a social injustice)?
 COSMETIC APPLICATIONS

Maria is an Assistant Marketing Communications Manager with TruBlush Cosmetics, a manufacturer of

facial cream and other skin moisturizing products. She is relatively new to the cosmetics industry,
being a recent college graduate with limited “real world” experience. As part of her orientation,
however, she recently had the opportunity to spend one week with the TruBlush marketing research
group, sitting in on several focus group discussions with regular cosmetics users.

Today Hans stopped Maria in the hallway and told her to coordinate the artwork on both the new
package label design and the storyboards for an upcoming advertising campaign, to reflect an increase
in the recommended application of a facial cream product from one to three applications daily. While
delighted with the opportunity to finally be assigned something substantive where she can
demonstrate what she is capable of doing, she is troubled by the directive.

Maria recalls that in each of the four focus group sessions the week before, the majority of consumers
interviewed revealed that just one application of this product “did the job.” While changing the
recommended usage would dearly contribute to additional sales volume, what she knows about the
product indicates that such an increase would not significantly benefit consumers. On the other hand,
Hans is the Group Product Marketing Manager, and he makes the decisions on promoting recent hires
for this product.

GUIDE QUESTIONS

1. Which of the alternatives would provide the greatest benefit to the greatest number?
2. How would costs be measured in this vignette (loss of consumer trust, risk to Maria’s
advancement)? 3. Do the benefits of being consistent with focus group data outweigh the “cost” of
lower sales volumes?
4. Which alternative(s) would not respect your rights if you were Maria? A TruBlush customer?
Stockholders of TruBlush?
 WASHING DIRTY LAUNDRY

Bruce Seth, a project manager at a consumer products company, was wondering how he should
proceed with his recommendation for the Endirt commercials. Endirt had been doing well in the
market, but not a week went by without a customer (or former customer) writing to complain about
the commercial.

There were variations of the commercial, but the central theme was “Dirt on your shirt.” It typically
featured a woman saying, “Dirt on your shirt! Dirt on your shirt!” in a taunting voice to a man whose
shirt was soiled. The man looked at another lady (presumably his wife), who was very embarrassed at
the entire situation. Later shots showed her washing the shirt after rubbing Endirt into it, and the
other woman (or women) saying, “No more dirt on your shirt!” The complaining letters, almost
exclusively from women, expressed objections to the commercial because it was demeaning to
women and otherwise offensive as well. On the one hand, the brand was doing well; it was the brand
leader in a growing market, though a much larger competing company was quite capable of beating
Endirt with its brand. On the other hand, were the rights of the women being infringed? All the letters
seemed to imply that. Bruce was a believer in the profit motive, but not at the cost of condoning
unethical behavior. He had been asked to make a recommendation for the commercial for the next TV
season. After reviewing the sales data and reading the letters of complaint, Bruce was contemplating
his next move.

Marketing research managers and project managers worked along with brand managers on specific
brand research issues. Bruce reported to Priscilla Wheeling, a marketing research manager, and would
provide recommendations to her and to the brand manager responsible for Endirt. Priscilla was a
capable, promising executive with excellent graduate degrees. She was supporting her husband
through his Ph.D. in history. She did not like the Endirt commercial and made no secret of it. She
proclaimed that she would never buy the brand because the message was offensive and because of
the role of the woman in the commercial. Bruce was pursuing a graduate degree while working and
putting his wife through college; he certainly needed the job and the income. He was a recent recruit
still in his probationary period.

Bruce had reviewed all the letters, practically all of which were from women and strongly negative.
Many of them said, as Priscilla did, that they would not buy the brand because of the offensive
commercial and because it was demeaning to women. Secondary data showed that the primary
decision makers and purchasers of the product were women. Part of the reason for Endirt’s success
was believed to be the advertising message, which not only had a high level of recall but a high level of
association with the brand. Bruce wondered if, in spite of its apparent success, it was ethical to
continue with the advertising message if it infringed on the rights of women, the major buyers of the
brand.

GUIDE QUESTIONS

1. What obligations do advertisers have in mass media marketing?

2. Are the rights of women being infringed? If so, should the campaign be stopped?
 3. How would a decision to stop the campaign affect the brand's market share and competitive
position and, therefore, the company?
4. What actions should Bruce take?
5. Which alternative would you choose in his position? Why would you make that choice?

GOLDEN TAURUS GARMENT COMPANY

Golden Taurus is a garment company managed by a Taiwanese national. The company is
experiencing near bankruptcy because of the current strikes of its employees union. The
management attributes the current difficulty in the company’s financial condition to labor
unrest. Cris Cruz, the owner, has experiencing being bullied and received several death threats.
Some of the issues raised by the employees against the management are the below
minimum wage salaries, series of unpaid SSS premiums, and delayed payment of salaries. Also
employees do not get their 13 th month pay even if the law entitles every employees regardless
of employment status. Also, employees are asked to sign a five-month contract, which excludes
them from getting the year-end bonus. Per company policy, only those employed with six
months employment contract can get the year-end bonus.
Long working hours and less break time add to the complaints of the employees.
Working hours start at seven in the morning and end at six in the evening. Break time in the
morning is from 10:00-10:15 and none in the afternoon. Employees can eat their lunch
between 12:45 and 1:00 which gives them only a fifteen-minute lunch break.
Employees are also concerned with violation of contract. Jethro are given quota which is
against the agreed per piece basis. They are also troubled with the poor working conditions and
the inadequate supply of water for their personal hygiene in the restroom.
Without the knowledge of employees, Golden Taurus files a bankruptcy status, and later
operated under a new company name.
Questions:
1. Does the company’s current financial condition justify the compensations given to
the employees? Explain
2. Is it ethical to deny the employees the information about the company’s financial
conditions and decisions?
3. Is it moral to let the employees sign a five month contract instead of a six month
contract?
 XYZ CEMENT COMPANY
In 1982, XYZ Cement Company began its plant operation in Pampanga. Local residents were
very happy because of the economic benefits they got form the plant especially the 400 local
residents employed. After a few years of operation, the plan started to emit large volumes of
pollution. Local residents noticed the constant vibration and loud noise coming from the plant.
Local residents filed a suit against the company asking the court issue an injunction to close the
plant. The residents claimed that the loud noise and the vibrations posed dangers to their
health and damaged their property.
The company was using the best available technology in their operation. The court refused the
injunction arguing that closing the plant would mean more harm than good to both parties. The
court instead ruled the XYZ should pay the residents a one-time fee to compensate them for
the damage done. The amount was computed based on the fair market price the residents
would receive if they were inclined and able to rent their property.
QUESTIONS
1. Was the decision of the court fair? Why or why not?
2. If you were the owner of the cement plant, what will you do to solve the problem?
 OH SALESMEN

Jim, 27, has recently been promoted to manager of sales personnel at a large car dealership. Mary, a
new salesperson (and the only female salesperson), comes to his office late one afternoon with a
complaint about something she says really bothers her. Specifically, she says she has never seen Tom,
one of the most experienced (and best) salespeople, at any of a series of off-site training seminars (at
which attendance is supposedly required). These seminars are designed to help sales staff learn detailed
technical information about the mechanical advantages of the cars they sell.

Jim’s “grapevine” impression is that most salespeople think the training seminars are a joke, and rumor
has it that a lot of salespeople regularly skip them (although many salespeople can be heard saying
things like, “I’m out of here--I’m going to today’s seminar at the Hyatt”). Jim’s boss, however, regularly
sends him memos that stress the importance of the training. Upper management spends a lot of money
on the training seminars, because they feel that such training will give the dealership a competitive
edge.

Mary is so new that she does not yet have an established sales record. Also, Jim has heard through the
grapevine that a lot of the salesmen are uncomfortable with Mary and wonder if a female can learn to
sell cars. She seems eager, however, and obviously wants to follow the rules. She concludes by telling
Jim that she’ll check back with him tomorrow to see how he’s handling the issue of the absent salesman.

GUIDE QUESTIONS

1. What actions should Mary take?

2. Which alternative would you choose if you were in her position?
3. Why would you make that choice?
4. How can this situation be prevented from occurring again?