Chapter 8 'Think Theory' answers

Consumers and Business Ethics

 

THINK THEORY 1

Take a look at the ASA UK website where you will find details of recent rulings. Have a look through some of the cases and consider the extent to which they contravene an ethic of duty presented in Chapter 3.

A product listing for a jumper, seen on www.boohoo.com in September 2018, stated "Faux Fur Pom Pom Jumper", alongside an image of the product. Humane Society International, who understood that the pom poms were real fur, challenged whether the ad was misleading. The ASA ruled the ad to be misleading as the jumper was found to be made of real fur. Thus, it could be argued that Boohoo contravened the Ethic of duty principle of consistency, as if all companies were to lie in their adverts consumers and societal trust would be seriously damaged. Also, if all companies used fur then this would risk species extinction. In addition, it could be argued that company broke the Ethic of duty principle of universality as it is unlikely that all other rational human beings would believe that it was acceptable to lie in such a manner, with the intent of generating high sales for a company.

THINK THEORY 2

Think about the question of whether marketers should be responsible for the aggregate consequences of their actions. Which ethical theories do you think would typically be used to argue either for or against this proposition?

One could use a utilitarian argument to suggest that marketers should be responsible for the aggregate consequences of their actions. For example, promoting the sale of sports utility vehicles (SUVs) to the urban mass market may generate utility for the company as well as many, if not most, who buy the product. Yet it is possible that the aggregate effect does not create the greatest good for the greatest number, since SUVs emit more air pollution and CO2 emissions and are louder, plus take up limited space in urban areas.

On the other hand, egoism can be used to argue against such a proposition. In this argument, the marketer is providing individual consumers with information about their product. As long as the information is not misleading or untrue, the consumer is then able to exercise their free will to make a purchasing decision. If someone chooses to use a product it is because they consider it to be in their own interests. A marketer can no more be held responsible for the aggregate decisions of their actions than can the inventor of a particular technology.

THINK THEORY 3

Fairness in pricing will obviously depend on how we define fairness. One way we can do this is by using Rawls’ theory of justice. How would the practices outlined here be assessed according to this theory?

Rawls might assess these four ethical problems with pricing as follows:

Excessive pricing

  • If the excessively-priced products are basic non-discretionary items necessary for enjoying basic freedoms (e.g. housing), then the excessive pricing is unfair, as customers are not free to leave the market at will.
  • If the items are discretionary (e.g. chocolate), then the decision on fairness would depend on the outcome of Rawls’s second test, which checks whether any inequalities in pricing leave those who profit least from the arrangement better off than they would otherwise have been, and whether everyone has a chance to get the better price conditions (e.g. by going to Finland to buy a cheaper car).

Price fixing

  • This is unfair pricing, because it fails Rawls’s second test: inequalities are systematic and consumers are unable to get better conditions.

Predatory pricing

  • Such pricing is unfair: by undermining competitors’ ability to compete fairly (a basic liberty in a market economy), predatory pricing fails Rawls’s first test.

Deceptive pricing

  • Deceptive pricing is unfair, because it fails the second test. By not providing true information to customers, deceptive pricing creates inequalities that do not leave those who profit least from such pricing better off than they would have been.

THINK THEORY 4

Compare arguments based on consequences with arguments based on rights and justice in assessing the impact of a Starbucks launch in a developing country context? What recommendations do you think proponents of these theories would for responsible marketing practice in such a context?

Consequentialist arguments about responsible marketing of Starbucks in a developing country context would focus on the extent to which such marketing could affect both the society in question, as well as the natural environment. So, an argument could be made that no marketing should take place due to the detrimental effect of coffee production, and accompanying packaging waste, on the environment. Conversely, the jobs that would be provided by the company, and the tax they would pay, could have a positive impact on the country.

From a rights and justice perspective, consumers within the developing country context have a right to access the products that Starbucks produces, particularly as they may provide safe alternatives to those locally available. Through arguing that marketing should be reduced or not engaged in, it could be argued that the individual citizens right to equality is not being respected.

THINK THEORY 5

Think about the challenge of sustainable consumption from a consequentialist point of view. This is the main approach to justifying increased consumption, but can it also provide the basis for moving towards a more sustainable level of consumption?

Yes, although more sustainable consumption may decrease economic growth and thus jeopardise employment opportunities and tax revenue, the costs associated with climate change related to unsustainable consumption are arguably far greater. For example, potential displacement of millions of people due to rising sea-levels, damaging weather events linked to climate change and other costs such as those associated with ‘environmental fixes’, for instance, attempts to draw carbon out of the air. Also, considering less-tangible factors and costs, such as preservation of animal and plant life, maintenance of nature and eco-system services, which can all be maintained and protected through more sustainable consumption.