Chapter3 Salesmanship

PROFESSIONAL SALESMANSHIP
CHAPTER
3:
Ethical & Legal
Considerations
in Personal
Selling
Merwin Mendoza
Paula Angela Simpao
Learning
Objectives A FTER REA DING THIS
C HA PTER, YOU SHOULD
UNDERSTAND:
What are ethics?
Ethical concerns of salespeople
The company’s ethical eyes and ears in
the field
Behaving ethically, everyday
Going beyond ethics: laws affecting
business-to-business personal selling
Ethics and regulation internationa
in sales l
Making ethical decisions
A FTER REA DING THIS Learnin
C HA PTER, YOU SHOULD
UNDERSTAND: g
What ethics are and why there is no Objectives
universally accepted standard for ethics.
Ethical concerns of salespeople in dealing con
with customers, competitors, employers, and
co-workers. t’d
Behavior that salespeople have a right to
expect from their employers.
Legal and ethical issues in foreign markets.
How to approach ethical decisions.
What Are
Ethics?
Study of what is good and bad

Provide a moral code of conduct governing
individuals and societies
Ethical perceptions can vary from Country to
country and Industry to industry
What is Ethical Why do salespeople need
Selling? to be ethical?
Basic principle - Unethical behavior
Customer hinders the
remains free to relationship between
make a choice buyers and sellers
Manipulation vs. Persuasion
Manipulation: Persuasion: The

Eliminating or decision still remains
reducing a buyer’s the buyer’s, with
choice unfairly attempts made to
influence it.
The
Company’s PRICING
Ethical Eyes
•Inflated list prices, not honoring
pricing incentives, and adding hidden
and Ears in the

costs
Field
•Salespeople are the firm’s eyes
and ears in the field, which
DISTRIBUTION
•Using resellers that are aggressive,
helps in decision-making in the dishonorable, “fly-by-night” operators.
following areas of the Using “bait and switch” strategies
marketing mix: and selling lower quality products
PRODUCT QUALITY AND PROMOTION

SERVICE •Deceptive advertising, misleading
• Poor product quality, unsafe products, product warranties, phony promotional
unreasonable return policies, and poor contests, and dishonest fund-raising
after-sales service activities
Behaving Ethically, Every Day
•Insights for behaving ethically include:
1.Ethical conflicts and choices are inherent in personal selling

2.The law is the lowest common denominator of ethical behavior
3.There is no single satisfactory standard of ethical action that is
agreeable to everyone to assist you in making on-the-job decisions
4.There are diverse and sometimes conflicting influences (e.g.,
the
customer, management, your peers, industry standards, competition) on
ethical behavior
5.Your value system will have a dramatic influence on your ethical conduct
6.The lower you are in the corporate hierarchy, the greater the likelihood
you will feel pressure to engage in ethical misconduct
7.Top management will set the tone for your organization’s ethical conduct
Factors Affecting Ethical Behavior
of Salespeople
social norms
personal goals
customer goals
company goals
company policies
Laws
Values of significant others
salespersons personal code of ethics
Ethical Ideas for S alespeople
Going Beyond Ethics: Laws Affecting
Business-to-Business Personal Selling
cont’d
Price discrimination Orders and terms of
Price fixing sales
Collusion Business descriptions
Exclusive dealing Product descriptions
Restraint of trade Secret rebates
Reciprocity Customer coercion
Tie-In sales Unfair competition
Unordered goods Business defamation
Conflicting Objectives
Adverse Effects of Unethical
conduct
Losing self-respect and confidence in self
Compromising long-term customer relationships in
the pursuit of short-term gains
Thinking that the only way to make
sales is to be dishonest or
unethical
Ethical Decision-Making Checklist
BUYERS’ VIEW OF
UNETHICAL SALES BEHAVIORS
Exaggerates benefits of product.

Passes the blame for something he or she did to
someone else.
Lies about product availability.
Misrepresents guarantees.
Lies about competition.
Sells products that people do
not need.
Makes oral promises that are not legally
binding. Is not interested in customer needs.
Answers questions even he or she does not know
the correct answer.
Sells hazardous products.
Unethical Practices
Deception
Deliberately presenting inaccurate information
Bribes vs. Kickbacks
-Bribes: Payments made to buyers to influence their purchase
decisions
-Kickbacks: Payments made to buyers based on the amount of
orders placed
Special treatment
Confidential information
Disclosing confidential information, gives reputation of being
untrustworthy
Backdoor Selling
Salespeople ignore the purchasing agent’s policy and contact people
directly involved in the purchasing decision
Trade Secrets
Information owned by the company by which the company
gains a competitive advantage.
Poaching
Unethical practice of stealing potential customers from other
salespeople.
False Claims
Making false claims about competitors’ products or
sabotaging their efforts is unethical and illegal
Criticisms
Criticizing a competitor’s products or policies is not
advisable.
Expense accounts
Cover legitimate expenses, such as for travel,
accommodation, food etc.
Reporting work-time information and activities

Giving inaccurate information or bending the truth
is clearly unethical
Switching Jobs
Give ample notice and assist during the
transition phase
Misrepresentation
Sales puffery: Unreliable statements that do not state the
inherent capabilities of products or services
False Claims Act (Lincoln Law): Encourages citizens to press
claims against vendors who sell fraudulently to the U.S. government.
Credulous person standard: Company has to pay damages if
a reasonable person could misunderstand its statement.
Illegal Business Practices
1.Business defamation
Unfair or untrue statements to customers about a competitor, its
products or its salespeople
2. Reciprocity
Special relationship in which two companies agree to buy products
from each other
3. Tying agreement
Buyer is required to purchase one product in order to get another
product
4. Conspiracy
An agreement between competitors before customers are
contacted
5. Collusion
Competitors working together while the customer is making a
purchase decision
6. Resale p r i c e maintenance
Minimum price below which distributors or retailers should not resell
their products
7. S p i ff (push money)
Special promotion incentive fund
Special incentives to get a reseller’s salespeople to push
products
8. Price d i s c r i m i n a t i o n
Unjustified special prices, discounts, or services to some
customers
9. Privacy laws
Limit the amount of information that a firm can obtain about a
consumer
Specify how that information can be used or shared
10. Do-Not-Call Law
Limits the conditions under which anyone on the registry may be
telephoned at home or on a cell phone
Lubrication
Paying small sums of money or gifts:
To low-ranking managers or government officials
In countries where these payments are not illegal.
Subordination
Paying larger sums of money:
To higher-ranking officials to get them to do something that is illegal or to ignore an
illegal act.
Cultural Relativism vs. Ethical Imperialism
Cultural relativism: View that no culture’s ethics are superior
Ethical imperialism: View that ethical standards in one’s home country should be
applied to one’s behavior across the world
The Foreign Corrupt Practices Act
Makes it illegal for U.S. companies to pay bribes to foreign officials
An amendment permits small lubrication payments when they are customary in a culture
Violations result in fines for company managers, employees, and agents who
participate in or authorize such bribes
Thank y'all for
listening..
HAV E A NIC E DA Y

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PROFESSIONAL SALESMANSHIP

Study of what is good and bad

Manipulation: Persuasion: The

and Ears in the

PRODUCT QUALITY AND PROMOTION

•Insights for behaving ethically include:

1.Ethical conflicts and choices are inherent in personal selling

Exaggerates benefits of product.

Reporting work-time information and activities

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