A philosophical branch that studies what is wrong and right in human behavior is known as ethics. Ethics studies moral principles (Winch, 2020). When every customer is treated fairly and with honesty by a firm or a salesperson then this set of behavior is referred to as the ethics of sales. Whenever a firm is selling its product or delivering any services to the consumer it must ensure that it uses sales practices that are trustworthy and should provide accurate and honest information (DeTienne et al., 2022). Sales ethics are generally developed and implemented by the firm along with the sales managers and salespersons. The ethics of sales has become an important topic of argument amongst philosophers as still unethical practices are existing which can be quite dangerous for a company and its product or service sales. The ethics of sale will be discussed in depth in this essay. It will also be highlighted why it becomes important for a company in the present scenario to follow and implement sales ethics. The discussion will further also be provided the opposing theories and opinions. Lastly, it will also be presenting practical examples which support the ethics of sales.
Every company needs to develop some code of ethics which is for the company and its employees so that all the sales practices can be regulated properly (Grewal and Levy, 2021). Training of firm salespersons becomes of utmost importance as they represent the ethics of the company. A company has to follow the Utilitarianism theory according to which a company has to make the ethical decision based upon the decision whether the actions or the production of the firm will be for the greatest benefit of all whoever is concerned with the product. In contrast to this many companies don’t follow this theory and make a product that is harmful to the consumers as well as to the environment. For example - The Volkswagen’s emission scandal which happened back in 2015; the management of the company blamed the software modifications and the software engineers behind the scandal that allowed the vehicles to pass the emission tests falsely but later it was unfolded that the upper management was also aware of the software installation scenario (Hotten, 2015). As a result, the brand lost $20 billion of market capitalization and along with this, the company faced a lot of negative publicity. So, situations like these can mislead the customers and their expectations of the products or the services. Thus, it is the responsibility of the company to be aware and provide honest information to the customer rather than just knowing the hiding and ignoring real facts and pretending like the firm wasn’t aware.
Most of the sales activities are undertaken by the sales team thus, they should be aware of their ethical sales obligations and responsibilities and must fulfill them wholeheartedly. Rather than just focusing on achieving their sales targets the sales team should keep the customers' needs ahead which will ultimately result in good and long-term relationships with the customers (McClaren, 2015). They should be focusing on customer relationships that are based upon reliability and trust. The sales team and the managers should not blame the company or any other person for the mistakes they have committed and should be accountable for the problems they have created (Mishra and Tripathi, 2020). When a company is marketing its products then the company can sometimes face a situation where they are asked for a valid reason why the customer should choose the product of the company rather than going for the competitors’ product/ service. The company in such cases should believe in its products rather than defaming or slandering the competitors. For example- Coco-Cola was sued by PepsiCo as it promoted its sports drink by defaming PepsiCo’s Gatorade for containing fewer electrolytes than that of Coco-Cola. It was later found that it didn’t have any scientific evidence. Thus, being sporty and competitive can always be good as it helps with bringing new changes and improvements to the company.
Many companies to increase their profits and fight their rivals uses marketing tactics that increase their sales. There is a Deontology theory of ethics that isn’t much concerned with the repercussions of the actions of the company but which depends on whether the underlying principles are right or not based on which the decisions are taken. However, some companies don’t follow this theory and believe on rather increasing their profits which is the main motive of the firm even if it is not based on ethical principles. For example – in September 2020, Subway introduced its new ‘‘Meat Stack Sub’’ with online and offline marketing campaigns Subway’s new Sub is a packet with more meat and less marketing or advertisement. This gave an impression to the customer that a company is not spending much on advertisement so the cost will be low for the company and thus, the company will be spending more on the meat that it saved with low-cost advertisements. Thus, the customer ended up thinking that the sandwich will be valuable for the money they will spend. Although in reality that particular Sub was the most expensive on the entire menu and many customers also claimed there weren’t any significant changes in the quantity of meat. Thus, the misleading advertisements set expectations that were unrealistic for the customers and the company lost many customers as a result. Hence, every company should try not to make false advertisements or misleading campaigns that might increase its sales in the short-term but will cost the company in the long term by negative public opinion about its products and a loss of its loyal customers.
Ethical sales always mean that complete honest information is provided to the customers rather than deceiving them with any misleading or wrongful information. Sometimes, companies, to gain high profits, uses policies and techniques that put a customer at a problem. For example – the growing company Airbnb has a lot of sales ethical issues with it. To attract individuals to do more bookings for Airbnb, the company lacks rules and inspections which has violated the customer’s privacy (Carville, 2021). They also pretend to be legal but there are countries where Airbnb is illegal which can put the customer in this trap too. The services offered by Airbnb also is poor as they lack the service for which they promise and earn a handsome amount of money from the customer. It has led to repercussions for the company like taking away the loyal customers, poor ratings, and even legal suites against the company. Therefore, it is important for every firm which is selling its product/ services in the market to be genuine to its customers and trustworthy to them.
VitaminWater twisted its facts stating that its product is a healthy option in comparison to soda but in reality, its single bottle was filled with eight teaspoons of sugar. Companies like VitaminWater do this as they think that customers are now getting health conscious and they will be preferring a healthy option that will maximize the company’s profits. But in reality, they are deceiving the customers which leads to consumer complaints against the firm’s products and services thus, might leading to more losses than what they have gained by twisting the fat s for their product or service.
There was a case where a UK-based beverage company Diageo was bribing the government officials of China and South Korea to help them with the product approvals. The company was later charged with a fine of $16 million for this. Therefore, bribing to pass a product to have that product in the market and thus, providing sales to the company can be an unethical way of earning sales. It can cost the company with huge fines and penalties.
However, there are various viewpoints which are of opinion that ethics in sales must not be followed. Some people don’t believe in the ethics of sales and they lead to an argument that every business has its primary purpose of profit maximization which indicates its growth in the present as well as in the future (Schwepker and Schultz, 2015). When a firm wants to earn higher profits, it becomes a bit natural that it will follow various tactics and techniques that will earn the firm a huge profit. If the company follows the ethics of sales it might result in low profits for the company as it puts on various limits on the company’s operations. The company if follows an ethical way then it can never focus on profit maximization as they need to give attention to the consumer’s interest also. It results in adverse effects not only on the company’s revenue but also on the growth of the company. There are also opinions that implementation of ethics takes a very long time as the ethics of sales need to be properly understood not only by the firm but the salesperson and the sales team needs to be trained as well. This requires a lot of effort on the organization’s part (Ingram, 2019). Companies that are not so giant believe that following ethics of sale is not feasible for them as it will reduce their profits which hampers their growth and with low revenues, it is not pragmatic for the company to survive in this stiff competition. Not only this, the ethics of sales are ever-changing as the business needs and desires keep on changing which requires them to change the ethics of sales too. It requires the company to put a lot of effort and time to understand them and explain them to their employees. This sometimes might not be convenient for the firms to change their standards every single time.
There is also a debate that generally prices, output, and many other decisions are taken based upon the two significant market forces i.e., the demand and the supply. The scope for the ethics of sales thus becomes restricted for the business. There is always a conflict of interest between the buyer and the seller as well as between the other competitors which makes ethical sales of operations next to impossible.
However, despite all these above-stated arguments following ethical sales activities is always good for the company as it increases the profits rather than decreasing them. In the long term, ethical sales activities increase the size of profits for the firm. Higher profits would ultimately lead to the growth of the business (Merkle et al., 2020). For a business to grow it must have good relations with its customers. Customers always stay loyal to those companies which are trustworthy, this trust has to be gained by the company and there is only one way for this following all the ethics for sales and being honest with the customers while selling any product or delivering any service (Ivan, 2014). Customers also stay loyal to those companies where the employees are treated fairly because the customers are now focusing on those brands which are focusing on their social responsibilities. For example – the tech giant company Apple uses the services of Taiwan Company Foxconn which helped Apple with manufacturing. It was accused of employing child slaves in hazardous conditions also there were cases where many employees and workers of Foxconn were facing crappy conditions daily, as a result, Apple is now not using Foxconn services which resulted in huge losses for the manufacturing company.
Thus, from the above-stated discussion, it can be concluded that in an emerging society every firm to happily exist and stay for a longer duration must follow the ethics of sales. Despite the many arguments against the ethics of sale efforts have to be made by the companies, their sales team, and all the salesperson in incorporating ethical sales values in all their decision-making policies and also implements them duly. A firm will always be benefited from large revenues in the long run and will have tremendous growth if the company is trustworthy and honest towards its customers. The examples stated above clearly show that if a company doesn’t follow the ethics of sales, it might have profits in the short run but the cost which it has to pay can be very large in comparison to the gains. Not only this the company will lose away all its loyal customers and have to face negative publicity which will impact the reputation of the company.
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