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Fingerhut Case Study Answers

Satisfactory Essays
Fingerhut is a direct marketing company that sells numerous consumer products. A lawsuit was brought on the company indicating that they made their profits from exploiting the poor and disadvantaged. However, Fingerhut views themselves as providing a more affordable way for lower income families to obtain valuable consumer goods on credit. Credit which would not be allowed to them by any other institution.

Fingerhut’s strategy included extending credit to those who otherwise wouldn’t get it, boldface monthly payment amounts, providing personalized catalogs based on a massive consumer database and increasing customer loyalty by “promoting” customers who paid their balance on time, allowing them the opportunity to purchase higher priced products in the future.

Fingerhut justified their actions by saying that they are taking a very large risk in providing this credit and their company suffers more than other providers of consumer products. Additionally, they were supported by several customers who want certain products right away and Fingerhut was the only one who would provide them with the credit to do so.
There are several alternatives to Fingerhut for the poor. They are to name a few, pawnshops
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I don’t see it as preying on the poor. They knew there was a large and profitable market for poor, disadvantaged consumers that wanted the ability to have finer, more valuable products, and didn’t have the means to obtain it. Fingerhut developed a well thought out plan and with an extensive use of time and resources developing a database to reach these consumers, they were able to provide the service at a much lower cost than any of the alternatives, while taking on a level of risk themselves. The items they sold were not essential items, but rather perks to the daily living of the consumer and these purchases didn’t have to be made, they along with the additional cost were choices made solely by the
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