Foundations of Marketing

Ethics and Pricing

People feel better when they think they are getting a great bargain when they shop. Knowing this, some retailer's markup items above the traditional retail price and then offer a 60 percent discount.

If they had simply discounted the normal retail price by 20 percent, the resulting "sale price" would have been the same. One retailer says that he is just making shoppers happy that they got a great deal when he inflates the retail price before discounting.

Significantly marking up prices in order to offer "deep discounts" is not an unethical pricing practice per se, but it may be considered misleading advertising. The retailer is not really reducing its profits as a result of offering the sale price, even though a 60 percent discount implies a financial sacrifice on the part of the retailer for the benefit of the customer.

The situation described above could, perhaps, be considered a sales promotion that uses deception or manipulation.

1. As a consumer think of a place you like to shop at because of the so-called great bargains, coupons, cash back and or discounts they offer.

2. From your shopping experience explain if the discounts you received on your purchase you feel was a bargain deal or do you feel you overpaid.

3. Did you believe the retailer is sacrificing revenue for you the consumers' benefit?

4. Why or Why not?

5. Do you find their sales practices to be ethical and beneficial to the consumer or perhaps unethical and misleading?

The requirements below must be met for your paper to be accepted and graded:

· Write between 500 - 750 words (approximately 2 pages) using Microsoft Word.

· Attempt APA style, see example below.

· Use font size 12 and 1" margins.

· Include cover page and reference page.

· At least 60% of your paper must be original content/writing.

· No more than 40% of your content/information may come from references.

· Use at least two references from outside the course material, preferably from EBSCOhost. Text book, lectures, and other materials in the course may be used, but are not counted toward the two reference requirement.

· Reference material (data, dates, graphs, quotes, paraphrased words, values, etc.) must be identified in the paper and listed on a reference page.