Topic: Unethical Sales Presentation Techniques
Characters: Sam, Consumer electronics salesperson for an outlet of a major discount store
Bernie, Sam’s customer for a color television set Michelle, Sales manager for the consumer electronics department at the discount outlet
Bernie is very interested in buying a color television. He tells Sam, the salesperson in the discount store where he feels he can get the best buy, that his old color TV recently died and he really misses seeing his favorite shows. The sooner he can buy and get a new TV delivered, the better, he explains. Sam knows that the particular model which Bernie seems to prefer by far to the others will go on sale for 15 percent off in three and a half weeks. However, he assumes that Bernie is not willing to wait that long and might look elsewhere. Also, Sam will not make as much commission on the reduced price. Therefore, he reasons that it would make little sense to inform Bernie of the pending sale.
When Sam tells Bernie that the TV set he is interested in is currently out of stock and will not be in for another week, Beanie is dearly disgruntled. Fearing losing the sale, Sam goes out to the back room to ask his sales manager, Michelle, if anything can be done to speed up delivery. Michelle says that this would be impossible, and she suggests that Sam could tell Bernie that the store can get the set within 24 hours and simply sell him the demonstration model. Michelle explains that the demo is in as-new condition and Bernie will never know the difference.
Sam feels that selling the demonstration model to Bernie wouldn’t be on the level. Knowing that it will take five working days to have a new set delivered to the store, Sam thinks of a different sales strategy–tell Bernie he can get a set to him in two days, then call Bernie tomorrow to say it will be sometime next week due to a flood of orders at the factory. Sam wonders how he can lock in the sale today.
Author: Geoffrey P. Lantos, Associate Professor of Marketing, Stonehill College.
What Are the Relevant Facts?
- Bernie, a customer at a discount outlet, is very eager to buy a new color TV set to replace his broken TV so that he can resume watching his favorite TV shows.
- Sam, the salesperson who is waiting on Bernie, knows that the particular model Bernie is interested in will be on sale in three and a half weeks but doesn’t inform Benue of this fact, figuring that Benue will take his business elsewhere and that he will not reap as large a commission.
- Sam discovers that Bernie is not even willing to wait an extra week to take delivery on the set.
- Sam asks his manager, Michelle, if delivery can be hastened. She says no, but suggests selling Bernie the demonstration model.
- Sam decides that this wouldn’t be honest and instead is thinking of telling Bernie that the TV will be available within two days, and then delivering it in five.
What Are the Ethical Issues?
- What is the seller’s duty to inform the buyer of all conditions of the sale?
- Is it fair for a seller to make promises to a buyer that he can’t keep?
- Does a salesperson have a responsibility to his superior to make a sale, even if it might mean compromising his own ethics?
- To whom is the salesperson’s primary responsibility: the customer, himself, his manager, or the company?
- What sales practices are necessary for building trust and long-term relationships with customers?
- To what degree should the sales manager demonstrate the ethical conduct she requires in her sales force through her own actions?
- Truth telling.
Who Are the Primary Stakeholders?
- What is the appropriate level of analysis (systemic, corporate, individual) to use in identifying the primary stakeholders?
- Who are the primary stakeholders?
- The retail outlet employees
- The retail chain stockholders
- Competitive stores and TV set manufacturers
- What are Sam’s responsibilities to the various stakeholders?
What Are the Possible Alternatives?
- Sam could tell Bernie that the set will go on sale in three and a half weeks and that he (Sam) is willing to wait, thereby taking a lower commission but fully informing Bernie.
- Sam could try to convince Bernie that waiting a week will be well worth it.
- Sam could go along with Michelle if he can try to sell Bernie the demonstration model right now, possibly at a reduced price.
- Sam could promise Bernie two-day delivery, even though it will take a week.
- Sam could ask Michelle if Bernie can be offered a monetary incentive for having to wait a week.
What Are the Ethics of the Alternatives?
- Ask questions based on a “utilitarian” perspective. For example:
- Which alternative would offer the greatest benefit to the greatest number?
- How would costs be measured in this scenario? How does one quantify the possible ill will towards the local outlet and the discount chain?
- Do the benefits of receiving a higher commission outweigh the possible loss of the sale or potential customer ill will?
- Do the benefits of being consistent with personal values outweigh the costs of losing personal and company income potential?
- Ask questions based on a “rights” perspective. For example:
- What does each stakeholder have a right to expect?
- Which alternative would you not want imposed on you if you were Bernie? Sam? Michelle?
- What rights does Bernie have as a customer?
- Ask questions based on a “justice” perspective.
- Which alternative distributes the benefits and burdens most equitably among the stakeholders?
- Which stakeholders bear the greatest burden for each alternative?
- Which alternative(s) demonstrate a fair process? A fair outcome?
What Are the Practical Constraints?
- Sam needs to consider his sales manager’s preferences.
- Sam needs to consider that Bernie’s reactions are uncertain in each alternative.
- Sam needs to consider the legal ramifications of withholding information or of giving the buyer false information.
What Actions Should Be Taken?
- What actions should Sam take?
- Which alternative would you choose if you were in his position? Why would you make that choice?
- Which ethical theories (utilitarian, rights, justice) make the most sense to you as they relate to this situation?
1f you were in this situation, what would you do?