MKTG 315 Case 4

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Saint Cloud State University *

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Marketing

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Apr 3, 2024

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pdf

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2

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Maia Ouimette, Dylan De Baldo, Austria Lewis, & Veronica Quinn Professional Selling MKTG 315 Section 55 Case 4.3 6, September 2023 Case Summary: (Maia) Samantha Wells, a marketer at Vernex, learns that 300,000 HS200 fire alarm sensor circuits are being shipped out of inventory by the shipping manager Duke Stilwell. These circuits were sold to Executron by Ed Naughton, the director of marketing. Sam questions the sale due to its timing before a merger and the introduction of new HS300s. Carrie Ventana, an administrative manager, checks that Executron is a first-time customer. Sam worries about the legitimacy of the sale, given the market overestimation and Ed's close ties to Executron's president. Carrie defends Ed's actions, but Sam is concerned about the sale's integrity in relation to Ed's potential promotion. Case Important Points: (Maia) Samantha questions the sudden sale of 300,000 HS200 fire alarm circuits to Executron by Ed Naughton. Concerns about timing, market overestimation, and Ed's relationship with Executron's president. Carrie confirms Executron's first purchase. Carrie defends Ed, Sam worries about sale's legitimacy and potential motives. Sam considers potential circuit return after merger. Case Questions: 1. What are the main ethical issues, if any, in the Vernex, Inc., case? (Austria) Duke informed Sam that Ed Naughton, the director of marketing, sold the sensor circuits to Executron, at full price. This is the first ethical issue as it was voiced that there was no discount given to the company, a misleading business practice in this case. Another ethical up issue is the fact that Ed Naughton sold old sensor circuits at full price, even though they were about to announce the new versions of the sensor circuits, breaching another misleading business practice. Sam was confused and questioned why Ed would charge Executron full price since the HS300s are about to be introduced. However, Duke assures Sam that Ed knew what he was doing. Sam alludes to concern for marketing, who overestimated the market for those circuits and suddenly, Ed sold the circuits to a company that has no effective use for them. This raises a much higher ethical concern because this seems like Ed made this selling decision to benefit himself and own reputation within the company. This also raises concern because it does not seem like Ed was going to inform anyone on this matter of selling in which it would be unethical to bring attention to himself and his financial profit rather than putting the Vernex company and its customers first. 2. What are Samantha (Sam) Well’s options? (Austria) Sam Well’s has the option of confronting Ed, reporting Ed, or letting things slide. Sam could seriously consider confronting Ed about this situation and bring the problem forward and
question what he did and why he did it. Sam could next report Ed immediately to the management above her and bring this to their attention where they can deal with it themselves. Lastly, she could not do anything, and she could say nothing about this situation. If she does not want to say anything, it could be due to the worry of the loss of sale in this situation. 3. How do the three levels of moral development relate to Sam’s situation? (Dylan) In this case, Ed Naughton is operating at the first level of moral development, preconventional. Ed took advantage of his relationship with the Executron president. Through this relationship Ed sells Executron HS200s at a higher than market price, an unethical maneuver. Carrie, the administrative manager is operating at the second level of moral development. She has told Sam all she knows and given her job description; she is not required to do anything else. Carrie has done nothing wrong herself and therefore chooses not to act since she has general trust of Ed given his reputation. Sam is operating at the third level of moral development - principled. Sam sees the moral issues with the whole situation. Ed has sold outdated product at a higher than market value through his personal relationship and Ed is now up for a promotion, which is partly due to this sale. Ed may very well get his promotion but it’s possible the product gets returned once Ed’s friend reali zes they paid way too much for it. Sam has not done anything wrong, but she sees that there is a dilemma and she is choosing to raise alarm bells by speaking with others such as Carrie. 4. What would you do? Our group decided that the best thing to do if one of us was Sam would be to confront Ed directly. As much as going to someone with more power would probably be more direct, it would be more respectful to Ed, a coworkers, to speak with him first. It would be important to express to Ed exactly our side and how we are seeing the situation. It would also be important for us to be direct in telling Ed that he is acting unethically by taking advantage of his relationship at Executron and its even worse if he gets a promotion based on a sale that results in a return. At the end of the conversation, it would be important to tell Ed that he has the power over the situation and that he must make it right. If Ed refuses to make the situation right, our group agreed it would be best to seek out someone with higher authority for sake of at least protecting the client, Executron.
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