Case Study Ethics Guide Dialing For Dollars Marketing Essay

Case Study morals Guide Dialing For Dollars trade EssayIn Dialing for Dollars, a high society is set ab turn up with low gross gross sales. Desperate to meet quota, a pigeonhole authorizes a sales representative to wish customers a 20% sack if they select delivery in the beginning the give up of the disembowel, and to inauguration dialing for dollars. Get what you billet. Be harvest-tideive. This prompts the salesperson to try out a few creative but questionable ways of nerve-wracking to boost sales. The sales person moves from customer to customer hard diverse tactics to convince the customers to buy some products. This article raises the question of how further sensation is leave behinding to go to succeed. In this report, we aim to discuss the creative sales tactics the salesperson employed, to evaluate if they were exhaustively or non, and in instances, to evaluate whether they were legal or not. We will too discuss the merits and demerits of apiece tactic, and whether they were in the scope of what the c in aller-out would find acceptable. The four questions asked areIs it good for you to write the telecommunicate agreeing to restitution the product back? If the email comes to cryst everyise later, what do you think your boss will say?Is it honest for you to offer the advertizement rebate? What effect does that throw out deem on your orders equilibrium tab?Is it ethical for you to ship to the fictitious company? Is it legal? strike the impact of your activities on future(a) quarters inventories.Case Study QuestionsQ1. Is it ethical for you to write the email agreeing to take the product back? If the email comes to dismay later, what do you think your boss will say?According to the American Marketing Associations Statement of moral philosophy, marketers should be forth business in dealings with customers and stakeholders. To this end, marketers should accomplish to be truthful in all situations and at all time s.1In business, stakeholders refers to any person(s) and/or entity/ies that has/have vested interest in the decisions businesses make. In general, these quite a little are usually employees, customers, melodic phraseholders, consumers, and even society at large if a companys business decisions were to affect them.In the case of Dialing for Dollars, a salesperson finds himself in quandary when the sales forecasting system predicts every quarter sales to be substantially under quota, prompting the salespersons boss to suggest that the salesperson start dialing for dollars. Get what you can. Be creative. This offsprings in the salesperson offering a management-authorized 20% discount on indian lodges that are delivered before the end of the quarter to its customers. nameless to management, the salesperson also offered to take back any unsold stock the adjacent quarter. He confirms this offer by email to the customer alternatively of on the purchase shape, as accounting would no t log the order this quarter under those conditions.The question is Who is affected by this decision? And what would be the outcome to those affected? In the case of the salesperson, his total sales would be upped, including his commissions, closureing in a net gain to him. In the case of the customer, he gets his 20% discount on the modernistic trade in, a dogged with a endorsement than unsold blood line could be cedeed the following quarter. For the customer, this is also a victorious situation. In the case of the company, the companys bottom line shows hearty sales and income flow rates for the quarter as a result of this decision. In the short time, it is a good business decision. But businesses do not exist to operate for a short term. They exist with the hope that they will continue operations indefinitely. So a decision such(prenominal) as this that may appear to be a net positive in the short-term, could have disastrous consequences in the long term. This brings me t o the other stakeholders, the stockholders. Stockholders purchase stock in a company based on the faith they have that the company will go on to thrive. A business decision that seeks to be deceitful and sign up corners in one quarter, which will negatively affect business the following quarter, is a bad one from the point of view of stockholders. A companys ordinary reputation is dependent on the internal ethics of the company and its employees. every hit to its public image could perceivably build stock prices to plummet drastically, as was the case with Martha Stewart stock during her insider-trading scandal.To answer the question, it was not ethical to write the email to take the product back without the expressed consent of management, and if the email comes to light, the boss would probably be disappointed at the action. To quote the American Marketing Associations mantra referred to above marketers should strive to be truthful in all situations and at all times. Clearly t his was not the case.Q2. Is it ethical for you to offer the advertizement discount? What effect does that discount have on your companys rest period sheet?Be work the companys sales forecasting system has predicted that quarterly sales will be substantially under quota, the vice chair of sales has authorized a 20-percent discount on new orders, with the only stipulation being that customers must take delivery prior to the end of the quarter so that accounting can book the order. Start dialing for dollars, she says, and get what you can. Be creative. With that said, three creative strategies were implemented.The stake strategy that the salesperson tried was that instead of offering the discount, the salesperson offers the product at full price, but agrees to pay a 20-percent credit in the next quarter, that way the full price is booked for this quarter. The salespersons toss out claims that the companys marketing department analyzed past sales with a witness new computer syste m and determined that increase advertising will cause additional sales, so if they order more product now, next quarter the company will give 20-percent of the order back to pay for advertising. The unequivocal is that the customer is going to receive the credit next quarter and not buy product in that quarter, killing your sales for that quarter, but thatll be a problem for next quarter.According to the Journal of Indian Management, publicize is the life blood of all business organizations, without which the products or services cannot flow to the distributors or sellers, and on to the consumers or users. Unethical issues in advertisement include providing misleading information, using ambiguous terms and defaulting and promised rewards.2After analyzing the given passel that the companys salesperson bring into beingd, legion(predicate) of these unethical issues were brought up. The salesperson first gave misleading information, by claiming that the marketing department analyz ed past sales using a fancy new computer system that determined increasing advertising will cause additional sales. Secondly, the salesperson promised a reward, by stating that by buying more product in this quarter, the company in return will reward 20-percent of their order back for advertising. Lastly, the whole sales pitch apply ambiguous terms. For example, the salesperson used terms such as, our fancy new computer system, but mainly well give you 20-percent of the order back to pay for advertising. What and how exactly will the company determine whether or not the 20-percent given back to the customer will be used for advertising, as that is a part of the agreement in the salespersons pitch?With all said and make, the salespersons advertising discount offer strategy for increasing the companys quarterly sales is highly unethical and raises several red flags. If the advertising discount offer is accepted by both sides, then the balance sheet for the current quarterly sales wi ll show a ruin in sales, however in the following quarter, the advertising discount will show up as a bust in the balance sheet, because that is when the 20-percent of the customers order will be credited back to the customer for advertising purposes.Q3. Is it ethical for you to ship to the fictitious company? Is it legal?According to championship Law and the Legal Environment by Beatty and Samuelson, Ethics is the study of how hoi polloi ought to act.3We believe the Dialing for Dollars salesperson acted very unethically for the reasons stated below.Many organizations create a Code of Ethics which states the organizations primary values, and sets the rules employees should abide by. No authoritative business will have a Code of Ethics that makes air such as this salespersons actions acceptable.Due to expected low quota, the vice president allowed employees to offer a 20% discount on new orders. The manner of speaking start dialing for dollars and get what you can. Be creative are not book of instructions to behave unethically. They mean that the salesperson should use creativity in trying to sell as much merchandise as possible, but in an ethical and legal fashion.This particular salesperson, out of desperation, sold $40,000 dollars worth of merchandise to a fictitious company owned by his brother-in-law. It is not ethical to ship to a fictitious company. The quota is met but the product is returned in the next quarter. A big lying final cause was formed with the brother-in-law. This deception causes the company to produce more merchandise based on deceptive sales amounts, which will result in the company being harmed in the long run.According to the Association of Certified Fraud Examiners, their mission is to reduce the relative incidence of fraud and white-collar crime. They performed a research using Benfords law to invent fraud,4which intented at investigative and audit sampling methods. They described something similar to what was done by the salesperson to be an embezzlement scheme. It is also illegal because the sales person created a fictitious company using his brother-in-law as the count person and allowed the company to perform a credit check. Moreover, this salesperson is also causing his company to record fictitious revenue which is also fraud. This is a serious problem as the company is not aware of the scheme it is being unwittingly involved in.The CPA Journal provides ways for company auditors to catch this type of fraud. They provide the following advice Be skeptical nigh large revenue transactions recorded near the fiscal closing and In reviewing purchase orders, auditors should look for cancellation clauses that could negate the sale. Auditors should read sales contracts and look for cancellation privileges and lapse dates. Revenue should not be recorded until the cancellation privilege lapses.5In summary, shipping products to a fictitious company is both unethical and illegal. It causes many problems f or the company in the long run. Ultimately, the company is responsible as it should take the proper steps in reviewing sales to ensure no such scheme is happening. Since the salesperson represents the company, if caught, they will both be charged with fraud.Q4. tell apart the impact of your activities on next quartersinventories.The impact of the three sales actions above would have terrible effects on the inventories. All of the returned stuff would become overstock. Since the automated system noticed the trend of increase in sales of the product it would wrongly forecast higher demand of the product. This would result in compounding the overstock problem by eventually increasing the amount of finished goods of the product in stock even more. On top of receiving back the returned product, the automated process to increase production would cause increase orders for raw materials for the manufacture of the product. With the finished product overstock from the returns as well as ill -advised over-production and increase raw materials, space for storing all of the inventories within the warehouse may also become a problem. Further, with the increased orders for the raw materials and possible negative net income from all of the returns, the company could be placed in jeopardy with its cash flow. Depending upon how bad the situation gets, the company may be put in a position to have the sales team sell the product at a deprivation in order to get inventory levels back to normal and not take any further, worse losses.In terms of accounting for inventories, one can also look at the calculation for Cost of Goods change as referenced from Cornerstones of Managerial AccountingCost of Goods make+ undone goods inventory (beg. of period) Finished goods inventory (end of period)Cost of Goods SoldThe Finished Goods inventory at the end of the next quarter (regardless of when the items are returned) would be increased dramatically by the returned product. This in turn wo uld inevitably have a negative effect on the Cost of Goods Sold at the end of the next quarter.Materials inventory as used in calculations for Cost of Goods Manufactured would also be affected because of the increase in raw materials purchased. The manifestation for Cost of Goods Manufactured as shown in Cornerstones of Managerial Accounting is condition Materials+ Direct Labor+ Overhead+ WIP (beg. of period) WIP (end of period)Cost of Goods ManufacturedSince the Direct Materials would be increased because of the increase in purchases, then the Cost of Goods Manufactured would be increased, which in turn would increase the Cost of Goods Sold again.Summary wherefore is ethics in business important? Society views unethical behavior by business leadership as being socially irresponsible. mischievousness ethical behavior can result in crushing blows to a companys public image, resulting in a greatly decreased bottom line. Ethics is so critical that management has to pay close attentio n to it in order to survive. Customers reaction to unethical management behavior can personnel department an organization out of business. Additionally, deceptive behavior and short cuts usually result in lawsuits and injuries, adding to a companys woes. In the end, its always best to do the right thing from the outset.