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Ethical and Legal Issues in Selling

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Aaron Gleiberman

on 28 January 2013

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Transcript of Ethical and Legal Issues in Selling

chapter 2 Ethical and Legal Issues in Selling Business defamation
occurs when a salesperson makes unfair or untrue statements to customers about a competitor, its products, or its salespeople.
statements are illegal when they damage the competitor’s reputation or the reputation of its salespeople. Business Defamation Principle of fairness
Equal and fair access to information
Withheld information or misrepresented information is unfair
Kickbacks, bribes, and other unethical activities are unfair Selling Ethics and Relationships Exhibit 2.4 Ethics Policy for
Motorola Salespeople What is ethical can vary from:
Country to country
Industry to industry Ethics and Personal Selling Lubrication
Resolving cultural differences
Salespeople need corporate support and guidance
Legal issues
U.S. salespeople are subject to U.S. laws International Ethical and Legal Issues Sherman Antitrust Act of 1890
Clayton Act of 1914
Federal Trade Commission Act of 1914
Robinson-Patman Act of 1934 Illegal Business Practices Sales puffery
“This is a top-notch product.”
“This product will last a lifetime.”
“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.” Misrepresentation or Sales Puffery Warranty
an assurance by the seller that the products will perform as represented.
Expressed warranty
an oral or written statement by the seller.
Implied warranty
not actually stated but is still an obligation defined by law. Legal Issues - Warranties Switching jobs
Give ample notice
Offer assistance during the transition phase
Don’t burn your bridges
Don’t take anything with you that belongs to the company Relationships with the Salesperson’s Company Expense accounts
Act as though you are spending your own money
Reporting work-time information and activities Relationships with the Salesperson’s Company Exhibit 2.7 Buyers’ View of Unethical Sales Behaviors Exhibit 2.6 One Doctor’s Request for Ethical Behavior 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 Relationships with Customers 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 compromise your principles. Choices You Can Make if Your Manager Asks You to Act Unethically Exhibit 2.5 Checklist for Making
Ethical Decisions 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 A Personal Code of Ethics Company policies
Codes of ethics
Values of significant others
Relatives and friends
Other salespeople
Sales managers
Laws Factors Influencing the Ethical Behavior of Salespeople Exhibit 2.3 Conflicting Objectives Exhibit 2.2 Factors Affecting Ethical Behavior of Salespeople Should you give an expensive Christmas gift to your biggest customer?
If a buyer tells you it is common practice to pay off purchasing agents to get orders in his or her country, should you do it?
Is it acceptable to use a high-pressure sales approach when you know your product is the best for the customer’s needs?
Is it okay to not share information about your product that could cost you a sale? Difficult Situations that Salespeople Face Ethical principles become increasingly important as firms move to partnerships, particularly strategic partnerships.
Basic principle: Customer remains free to make a choice. Ethics and Partnering Relationships Partnerships between buyers and sellers cannot develop when salespeople behave unethically or illegally.
Trust deteriorates if integrity becomes questionable.
Legal principles guide market exchange relationships. Ethics and Partnering Relationships Exhibit 2.1 The Evolution of Personal Selling Ethics
the principles governing behavior of an individual or a group.
These principles establish appropriate behavior, indicating what is right and wrong. Ethics and Personal Selling “Doing the right thing is not an option, but an obligation.”

Patricia Gietl , HP Why do salespeople need to develop their own codes of ethics?
Which ethical responsibilities do salespeople have toward themselves, their firms, and their customers?
Do ethics get in the way of being a successful salesperson?
What guidelines should salespeople consider when confronting situations involving an ethical issue?
Which laws apply to personal selling? Some Questions Answered in This Chapter Are: Reciprocity
Tying agreements
Conspiracy and collusion
Interference with competitors
Restrictions on resellers
Price discrimination
Privacy laws
Do-not-call law Business Defamation Uniform commercial code
Title and risk of loss
Oral versus written agreements
Obligations and performance Legal Issues (continued) Special treatment
Confidential information
Backdoor selling Relationships with Customers (continued) Deception
Telling half-truths
Withholding important information Relationships with Customers Administrative laws
established by local, state, or federal regulatory agencies.
Common law
grows out of court decisions. Statutory law
based on legislation passed by either state legislatures or Congress. Legal Issues Relationships with competitors
Don’t make false claims
Don’t criticize Relationships with colleagues
Sexual harassment
Taking advantage of other salespeople Relationships with Colleagues and Competitors Persuasion
trying to influence the buyer’s decision, not force it. Manipulation
eliminates or reduces the buyer’s choice unfairly. Ethics and Partnering Relationships
Full transcript