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CHAPTER 3
ETHICS FIRST… THEN CUSTOMER RELATIONSHIPS
COMMENTS ON CHAPTER 3 SALES APPLICATION QUESTIONS
1. Who knows? It is often difficult to tell if these are socially responsible actions. These 3 actions may
2. Your decision would probably be influenced by both standards. If a business practice is encouraged
3. Have the students share their situations where they were in an ethical dilemma. Be sure they
4. "Sales puffery" are the opinions of the salesperson while misrepresentation is when the customer
5. While all stakeholders are important, you must remember that shareholders ultimately cannot be
6. A code of ethics brings order to the firm, but it cannot be expected to be abided by unless the
COMMENTS ON CASES
Case 3-1: Perfect Solutions
Cases entitled Perfect Solutions (3-1), Sales Hype (3-2), Dumping Inventory (11-3),
and Steve Santana: Pressured to Close a Big Deal (13-4) were created from
watching their videos. The write-up for each of these cases is an overview of the
video. For this overview and example multiple-choice test questions for each case
please see Part II of your IM entitled “Videos Accompanying Fundamentals of
Selling: Customers For Life Through Service: Outlines and Test Questions.”
Taking two or three class periods (about 3 hours) to cover Chapter 3 “Ethics First…Then Customer
Relationships” and using these four sales ethics cases where you feel appropriate throughout the course
The following are possible guidelines for answering questions at the end of this case:
1. Describe the situation faced by both Scott Patterson and Larry Ingram.
Players: Scott Patterson, salesperson of Perfect Solutions (PS) and Larry
Ingram has been a distributor of PS products for 10 years and PS's top
distributor for the last two years. Scott recently signed up Barber
Distributing, a competitor of Ingram. Ingram calls Scott into his o2ce to
Mr. Ingram tells Scott that Barber undercut their prices by 10% to get the DIS
project. Ingram had cut their prices to the bone. "Did PS give Barber special
bid or lose his business.
Ingram says Dymotzue is trying to get his business from PS. Dymotzue's
prices are on Ingram's desk, including the price for the new adhesive. Ingram
one truckload by the end of the month.
Ingram says Barber Distributing was in the o2ce of one of his customers
them as a new prospect.
The video ends with Scott caught looking at Dymotzue's price list on Ingram's
desk.
2. What would you do if you were Scott Patterson?
Scott is the salesperson. You might divide this question into two areas:
A. What would the lying, cheating, stealing salesperson, Scott,
now do?
What might be the consequences of these actions short- and
long- term?
B. What would be done by the salesperson who follows the
Golden Rule? See Chapter 1’s Exhibit entitled “Salesperson
Di;erences” which compares the traditional, professional, and
What might be the consequences of these actions in the short
and long-terms?
3. What would you do if you were Larry Ingram?
Larry is Scott’s biggest distributor. You might describe to class what a
Scott’s previous A and B questions can be also used to discuss Mr. Ingram’s
4. What are the ethical considerations, if any, in this case? Make the
following overhead to show your class and lead class discussion.
Salesperson’s Ethics in Dealing with…
A. Ethics Related to Employer
(1.) Misusing company assets—samples to reduce list
(2.) Cheating—getting sales unethically affect
B. Ethics in Dealing with Customers
(1.) Free samples—bribes, kickbacks, price discrimination.
competitor.
(3.) Price discrimination—sell cheaper to Barber? We do
C. Customer Ethics to Salesperson (Not discussed in textbook)
(2.) Put pressure on Scott to get best price—does that
1. What level of moral development are Patterson and Ingram operating at in
this business relationship?
A. Scott Patterson—the salesperson—Level 1.
Case 3-2: Sales Hype: To Tell the Truth or Stretch It, That is the Question
Cases entitled Perfect Solutions (3-1), Sales Hype (3-2), Dumping Inventory (11-3),
and Steve Santana: Pressured to Close a Big Deal (13-4) were created from
watching their videos. The write-up for each of these cases is an overview of the
video. For this overview and example multiple-choice test questions for each case
please see Part II of your IM entitled “Videos Accompanying Fundamentals of
Selling: Customers For Life Through Service: Outlines and Test Questions.”
Taking two or three class periods (about 3 hours) to cover Chapter 3 “Ethics First…Then Customer
Relationships” and using these four sales ethics cases where you feel appropriate throughout the course
1. Describe the situation faced by Kara.
This video is about two retail furniture salespeople, Sally and Kara, who are
about to have performance reviews based on their sales numbers. Kara is
2. What would you do if your were Kara?
A. Kara needs to see what happens when she goes into management for her
performance review. Two of her options are:
(1.) If management is happy with Sally’s unethical sales practices, Kara
(2.) If management is in agreement with Kara then Sally can change her
B. Make an overhead of Exhibit 1 in this case answer, and give it to your class
3. What are the ethical considerations, if any, in this case?
A. Ethics With Employer Dealing with Employees
(1.) The textbooks clearly discuss that it is the ‘leader(s)’ responsibly to
B. Ethics Related to Employer
(1.) Sally is lying to customers. Let’s you and I tell our students the truth.
Sales hype is sales lying. Sally seems to be willing to do anything to
(2.) The unnamed man in the video seems to view selling the same as
(3.) However Kara can not go by what Sally does and the man says. She
C. Ethics Related to Customers
(1.) Sally is treating customers how I would not want to be treated.
D. Salespeople’s Ethics Related to Other Salespeople (not in textbook)
(1.) It is easy to see by this video the impact one salesperson can
(2.) By lying to customers and stealing other salespeople’s customers,
(3.) Kara might be the better salesperson, but Sally's unearned sales can
4. What level of moral development are Sally and Kara operating at in this business situation?
A. Sally—Level 1.
Insert 1
Clayton Antitrust Act - Section 2C
"...It shall be unlawful for any person engaged in commerce, in the course of such commerce, to pay or grant,
Lack of knowledge, intent of illegal payment, and/or proof of actual competitive injury cannot be raised as a
defense under this section.
Her use of "full-line forcing" a type of tying agreement, is a more concrete transgression (see Insert 2). The
issue in a tie-in case is usually the effect of the tie-in on competitors of the seller. In some cases, however, the
Insert 2
Clayton Antitrust Act - Section 3
That it shall be unlawful for any person engaged in commerce, in the course of such commerce, to lease or
make a sale or contract for sale of goods, wares, merchandise, machinery, supplies or other commodities,
whether patented or unpatented, for use, consumption or resale within or any insular possession or other place
under the jurisdiction of the United States, or fix a price charged therefore, or discount from, or rebate upon,
SS must adopt a code of ethics that explicitly states what type of behaviors are illegal and, more
broadly, unethical. These behaviors would then become unacceptable and grounds for dismissal. SS must
Replacements of fired sales representatives should make it clear to the abused customers that the
Many tests and guidelines have been proposed to determine ethical behavior for corporate
