2. ETHICAL AND LEGAL ISSUES IN SELLING
chapter 3
ETHICAL AND LEGAL ISSUES IN SELLING
SOME QUESTIONS ANSWERED IN THIS CHAPTER ARE:
Why do salespeople need to develop their own codes of ethics?
What ethical responsibilities do salespeople have toward themselves, their firms, and their customers?
Do ethics get in the way of being a successful salesperson?
Which guidelines should salespeople consider when confronting situations involving an ethical issue?
Which laws apply to personal selling?
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3. ~Georgia Taylor Moore myCRMcareer
“You must practice business with the same integrity and ethics I learned as a child from my grandmother.”
~Georgia Taylor Moore myCRMcareer
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4. Ethics and Personal Selling
Ethics are the ________ governing behavior of an individual or a group.
These ________ establish appropriate behavior, indicating what is right and wrong.
What is ethical can vary from:
Country to country
Industry to industry
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5. Ethics and Partnering Relationships
Partnerships between buyers and sellers cannot develop when salespeople behave unethically or illegally.
Trust deteriorates if ________ becomes questionable.
Legal principles guide market exchange relationships.
Ethical principles become increasingly important as firms move to partnerships, particularly strategic partnerships.
Basic principle: Customer remains free to make a choice.
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6. Ethics and Partnering Relationships (continued)
vs.
Which is unethical?
Persuasion is trying to ________ the buyer’s decision, not force it.
Manipulation eliminates or reduces the buyer’s choice unfairly.
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7. Factors Affecting Ethical Behavior of Salespeople
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8. Personal, Company, and Customer Needs
Conflicting Objectives
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9. Factors Influencing the Ethical Behavior of Salespeople (continued)
Company policies
Codes of ethics
Values of significant others
Relatives and friends
Other salespeople
Sales managers
Laws
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10. A Personal Code of Ethics
Rationalizations:
All salespeople behave “this way”
No one will be hurt by this behavior
This behavior is the lesser of two evils
This conduct is the price one has to pay for being in business
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11. Checklist for Making Ethical Decisions
Would I be embarrassed if a customer found out about this behavior?
Would my supervisor disapprove of this behavior?
Would most salespeople feel that this behavior is unusual?
Am I about to do this because I think I can get away with it?
Would I be upset if a salesperson did this to me?
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12. Checklist for Making Ethical Decisions (continued)
Would my family or friends think less of me if I told them about engaging in this sales activity?
Am I concerned about the possible ________ of this behavior?
Would I be upset if this behavior or activity were publicized in a newspaper article?
Would ________ be worse off if everyone engaged in this behavior or activity?
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13. Choices You Can Make if Your Manager Asks You to Act Unethically
Ignore your personal values and do what your company asks you to do.
Take a stand and tell your employer what you think.
Refuse to ________ your principles.
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14. Selling Ethics and Relationships
Principle of fairness
Equal and fair access to information
Withheld information or misrepresented information is unfair
Kickbacks, bribes, and other unethical activities are unfair
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15. Relationships with Customers
Deception
Telling ________-truths
Withholding important information
Bribes, gifts, and entertainment
Check your motives for gift giving
Make sure the customer understands no strings attached
Make sure the gift does not violate either companies’ policies
Safest gifts are inexpensive business items imprinted with the salesperson’s company logo
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16. Relationships with Customers (continued)
Special treatment
Confidential information
Backdoor selling
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17. Buyers’ View of Unethical Sales Behaviors
Exaggerates benefits of product.
Passes the blame for something he or she did to someone else.
Lies about product availability.
Misrepresents guarantees.
Lies about competition.
Sells products that people do not need.
Makes oral promises that are not legally binding.
Is not interested in customer needs.
Answers questions even when he or she does not know the correct answer.
Sells hazardous products.
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18. Relationships with the Salesperson’s Company
Expense accounts
Act as though you are spending ________ ________ money
Reporting work-time information and activities
Switching jobs
Give ample notice
Offer assistance during the transition
Don’t burn your bridges
Don’t take anything with you that belongs to the company
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19. Relationships with Colleagues and Competitors
Sexual harassment
Taking advantage of other salespeople
Relationships with competitors
Don’t make false claims
Don’t criticize
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20. Legal Issues
Statutory law is based on legislation passed by either state legislatures or Congress.
Administrative laws are established by local, state, or federal regulatory agencies.
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Common law grows out of court decisions.
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21. Legal Issues (continued)
Uniform commercial code
Agency
Sale
Title and risk of loss
Oral versus written agreements
Obligations and performance
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22. Legal Issues - Warranties
A warranty is an ________ by the seller that the products will perform as represented.
An expressed warranty is an oral or written statement by the seller.
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An implied warranty is not actually stated but is still an obligation defined by law.
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23. Misrepresentation or Sales Puffery
“This is a top-notch product.”
“This product will last a lifetime.”
Misrepresentation
“Mechanically, this oil rig is a 9 on a scale of 10.”
“Feel free to prescribe this drug to your patients, doctor. It’s nonaddicting.”
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24. Illegal Business Practices
Sherman Antitrust Act of 1890
Clayton Act of 1914
Federal Trade Commission Act of 1914
Robinson-Patman Act of 1934
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25. Business Defamation Reciprocity Tying agreements
Conspiracy and collusion
Interference with competitors
Restrictions on resellers
Price discrimination
Privacy laws
Do-not-call law
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26. International Ethical and Legal Issues
Subordination
Resolving cultural differences
Salespeople need corporate support and guidance
Legal issues
U.S. salespeople are subject to U.S. laws
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27. Summary
Legal and ethical responsibilities of salespeople are important because salespeople may face conflicts between their personal standards and the standards of their firms and customers.
Salespeople’s ethical standards determine how they will conduct relationships with their customers, employers, and competitors.
Many companies have ethical standards that describe the behavior expected of their salespeople.
Good ethics are good business.
Statutory laws guide the activities of salespeople in the United States.
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