108 CHAPTER 5 EXTERNALCONSIDERATIONSINMARKETING
wasthatcompetitionintensified,priceswerelowered(sometimesbelowcost),andmany
once-stableorganizationssufferedhugefinancial losses.
Asderegulationunfolded-newcompetitionwaspermitted,rateregulationwaslOOS-
enedorabandoned-theviciouscyclebegantoreverseitself.Forexample,AT&ThadbeeD
slowtoadoptfiber-opticcable.In 1985 , therewereonly136,000milesofit inAT&T's
system. SprintandMCIhadmore. AT&Tresponded.By1994,it had1.3millionmilesof
fibercable(slightl y morethanMCIandSprint).Airlines,freedoftheCAB'sroutinerestric-
tions, organized" hubandspoke"systems-routingpassengersviamajortransferpoints-
thatprovidedmoreconnections.In1978,about14%ofallpassengershadtochangeairlines
toreachtheirdestination;by1995,thisnumberfelltoabout 1 %.4ConsumerProtection
Sincethebeginningofthetwentiethcentury,therehasbeena concertedefforttoprotect
theconsumer. Forexample, theFood,Drug,andCosmeticAct(:938)wasaimedprinci-
pally at preventingtheadulterationormisbrandingofthethreecategoriesofproducts.The
variousfederalconsumerprotectionlaws includemorethan 30 amendmentsandseparate
laws relatingtofood,drugs,andcosmetics, suchastheInfantFormulaAct(1980)andthe
Nutritional LabelingandEducationAct(' 990 ). Perhapsthemostsignificantperiodincon-
sumerprotectionwasthe 1960s,withtheemergenceofconsumerism.Thiswasa grass-
rootsmovementintendedtoincreasetheinfluence,power,andrightsofconsumersindealing
withtheinstitutions.TheConsumerProductSafetyAct(1972)establishedtheConsumer
ProductSafetyCommission.
Ethicsis generallyreferredtoasthesetofmoralprinciplesorvaluesthatguidebehav-
ior.Thereisageneralrecognitionthatmany,ifnotmost,business decisionsinvolvesome
ethicaljudgement.Considerthe followingdilemma.Anathleticshoe companyisconsid-
eringwhethertomanufactureshoes;na countrywitDa verypoorrecordonhumanrights.
Thenewfacilitywillimprovethecompanyscompetitiveposition,butthehostgovernment
willalsomakea considerableprofit,apnfitthatwillbeenjoyedbytherulingelite,notby
thepeopleofthecountrywhowillbeemployedatmeagerwages.Willthefirmsupporta
COffilptgovernmentinordertomakehigherprofits?
Firmshopethata considerationofethicalissuesduringthedecision-makingprocess
willbehelpfulinpreventing orat leastdecreasingthefrequencyofunethicalbehavior.Hav-
inga corporateethicspolicy alsoseemstofacilitatetheprocessofrecoveryafteranethi-
calscandal-althoughfirmsmaywishotherwise,unethicalactsdooccuranddonotoften
gounnoticed.Thelackofrespectmanypeoplefeeltowardsbusinesstoday,thepress's propen-
sityforinvestigativeteporting, andthewillingnessofmanyinsiderstoblowthewhistleon
unethicalcorporatebehaviorincreasethelikelihoodthatsuchbehaviorswiileventuallybe
discovered. SeeFigure5.2.
Ethicalproblemsfacedbymarketingprofessionalsstemfrom conflictsanddis-
agreements.Theytendtoberelationshipproblems.Eachpartyina marketingtransaction
bringsa setofexpectationsregardinghowthebusinessrelatior:shipwillexistandhowtrans-
actionsshould beconducted.Forexample,whenyouasa consumerwishtopurchasesome-
thingfroma retailer,youbring thefollowingexpectatio:lsaboutthetransaction:(1)you
wantto betreatedfairlyby thesalesperson. (2)you wanttopay a reasonableprice,
(3)youwanttheproducttobeavailableasadvertisingsaysit willandintheindicatedcon-
dition,and(4)youwantittoperformaspromised.UrJortunately,yourexpectationsmight
notbein agreementwiththoseoftheretailer.Theretailsalespersonmaynot"havetime
foryou," ortheretailer's notionofa "reasonable"pricemaybehigherthanyours,orthe
advertisingfortheproductmaybemisleading. Asummaryofethicissuesrelatedtomar-
ketingisshowninTable5.3.