Chapter 2: Ethical and Legal Issues

Ethics are ==principles governing behavior== of an individual or a group and establish appropriate behavior indicating ==what is right and wrong==.

Factors Affecting Ethical Behaviors of Salespeople: personal growth, social norms, customer goals, company goals, company policies, laws, and values of significant others.

The personal selling step that began ==before 1930== was production.

The objective of production is ==making sales==.

The orientation of production is ==short-term seller needs==.

The role of salesperson in production is to be the ==provider==.

The activities of salesperson in production is ==taking orders and delivering goods==.

The personal selling step that ==began in 1930 to 1960== was sales.

The objective of sales is ==making sales==.

The orientation of sales is ==short-term seller needs==.

The role of salesperson in sales is to be the ==persuader==.

The activities of salespeople in sales in ==aggressively convincing buyers to buy products==.

The personal selling step that ==began in 1960 to 1990== was marketing.

The objective of marketing is ==satisfying customer needs==.

The orientation of marketing is ==short-term customer needs==.

The role of salesperson in marketing is to be the ==problem solver==.

The activities of salespeople in marketing is ==matching available offerings to buyer needs==.

The personal selling step that began ==after 1990== was ==partnering==.

The objective of partnering is ==building relationships==.

The orientation of partnering is ==long-term customer and seller needs==.

The role of salesperson in partnering is to be to ==value creator==.

The activities of salespeople in partnering is ==creating new alternatives, matching buyer needs with seller capabilities==.

Unethical behavior ==hinders the relationship between buyers and sellers== and ==destroys trust==.

Ethical principles become increasingly important as firms move toward ==longer-term relationships==.

The key principle of ethical selling is the ==customer is free to make a choice==.

Manipulation is eliminating or ==reducing a buyer’s choice unfairly== (unethical).

Persuasion is ==influencing the buyer’s decisions==, but the decision still remains the buyer’s.

Common areas of ethical concern: using ==deception==, offering ==bribes, gifts, and entertainment==, providing ==special treatment==, divulging confidential information, and ==backdoor selling==.

Deception is telling ==half-truths== or ==withholding important information== which is manipulative and unethical.

Providing special treatment upsets customers who do not get the special attention.

Backdoor selling is when a salesperson ==ignores the purchasing agent’s policy== and contacts people directly involved in the purchasing decision.

What buyers hate about salespeople: ==exaggerating== the benefits of products, ==passing the blame== to someone else (usually after a failure), ==lying== about product availability, pricing, or competition, misrepresenting guarantees, ==pushing products that people do not need==, making oral promises that are not legally binding, ==not being interested in customer needs==, and answering questions even when he or she does not know the correct answer.

Puffery is exaggerating the benefits of products.

Problem areas with relationship with salesperson’s own company: ethically handling ==expense accounts==, ==reporting work time== information and activities, and ==switching jobs== (without notice; emotional outbursts).

Relationship with customers and colleagues can result in ==taking advantage of other salespeople==.

Poaching is the unethical practice of ==stealing potential customers from other salespeople==.

Relationships with competitors can result in making ==false claims about competitors’ products== or sabotaging their efforts and is unethical and illegal.

Making false claims about competitors’ products or sabotaging their efforts will ==damage salespeople and companies’ reputations==.

==Criticizing a competitor is not advisable==.

The Uniform Commercial Code (UCC) Terms involves the ==agent, sale, offer, and orders==.

An Agent is a person ==who acts in place== of company.

A sale is a ==transfer of title== to goods by the seller to the buyer for a consideration known as price.

A sale is ==different from a contract to sell==.

A contract to sell occurs ==when a buyer accepts an offer, but title is not yet transferred==.

An offer is when a salesperson ==quotes specific terms==.

An order is a written offer that ==becomes a contract when it is signed by both parties==.

The UCC terms related to salespeople involves ==oral agreements, warranty, and puffery==.

Oral agreements are ==as binding as written agreements==.

When the salesperson and the customer agree on the terms of a contract, ==both firms must perform according to those terms in good faith==.

A warranty is ==assurance== by the seller that the products will perform as represented.

The two types of warranties are ==expressed warranty== and ==implied warranty==.

Expressed warranty is an oral or written statement by seller.

An implied warranty is not actually stated but still an obligation defined by law (ex: buy a car, the engine should start).

Puffery is exaggerated statements about the performance of products and services (legal, but unethical).

Unethical business practices: ==business defamation==, ==reciprocity==, ==tying agreement==, ==conspiracy==, and ==price discrimination==.

Business defamation is the ==unfair or untrue statements to customers about a competitor==, its products, or its salespeople.

Reciprocity is an arrangement in which ==two companies agree to buy products from each other==.

Tying agreement is when a buyer is ==required to purchase one product in order to get another== (ex: Apple OS lack of compatibility)

Conspiracy is an ==agreement between competitors before customers are contacted== which is an illegal practice.

Price discrimination is providing unjustified ==special prices, discounts, or services to some customers==.