Ethics

2961 Words Dec 25th, 2014 12 Pages
4.12 4.13 ETHICS IN MARKETING RESEARCH: MINI-CASE STUDIES – courtesy of Mr. Hicks
PART 1: Read the 4 mini-cases below. For TWO of the following 4 cases,answer the following questionson a separate sheet of paper: 1. What are the relevant Facts? 2. What are the ethical Issues? 3. Offer your opinion on what actions should be taken (at least 2-3 paragraphs)

Case Study 1
Incredible Shrinking Potato Chip Package
Topic: Cost vs. price vs. value issues
Characters:
Julie, Brand Manager for potato chips at a regional salty snacks manufacturer
Dave, Marketing Director for the regional salty snacks manufacturer

Julie has been concerned about the profitability of the various items in her line of potato chips. According to
…show more content…
Historical data in this industry revealed another possible competitive maneuver in the face of rising ingredient costs: hold the line on prices and package size while reducing the net weight of the package. Julie was concerned that this might be a deceptive practice. She recalled from a Consumer Behavior course she had taken in college a concept known as the “just noticeable difference.” This said that relatively small changes in a stimulus (such as a price hike or content shrinkage) go unnoticed by consumers. Julie felt intuitively that the price increase necessary to maintain margins would be noticed, given the price sensitivity of buyers for snack foods. However, the past industry data suggested that perhaps buyers might not notice the package size reduction needed to sustain profits, which in this case would be 1.1 ounces.

Julie asked her boss, Dave, the Marketing Director, about the advisability of reducing the net weight of the potato chips. Dave said that this was a practice known variously as “downsizing” and “package shorting.” It was a very common practice among packaged goods manufacturers. For instance, he said, candy bar manufacturers are subject to constantly fluctuating ingredient prices, and because there are expected (“fair” or “reference”) prices for candy bars, package sizes are frequently adjusted without informing consumers. Jim said that was a nonissue

More about Ethics

Open Document