Bus 303 Practice Midterm
Bus 303 Practice Midterm
Characters: Cathy and Dave, a well-to-do professional couple Al, a real estate salesman
Cathy and Dave are young, upwardly mobile. They hold good professional jobs in downtown Chicago. One day Cathy received an invitation in-the mail, from a resort called Green Acres (GA), which was located near the mountains, about eight hour driving time from Chicago. The mailer invited the young couple to spend two nights free of cost and receive $50 for expenses. All they had to do in return was to listen to a presentation, see a video, and take a tour of the resort for about two hours. Additional conditions included 24 hour advance booking of the room with 24 hour notice for cancellations, and a valid credit card. Green Acres would charge $50 for a no show.
Although the letter made no mention of it, Cathy and Dave knew the invitation was a real estate promotion and guessed that the two hours with the GA staff meant a hard sell for a condo or a timeshare near a lake or a golf course, something they did not want. They decided to take the offer anyway in order to get a free vacation and arranged to visit GA the following weekend.
Cathy and Dave had a good time at GA. The only sour point of the trip was the last exchange they had with Al the salesman. At the end of the two hour presentation when Cathy and Dave had refused to buy any GA properties, Al looked at Dave in frustration and said, “If you knew you weren’t going to buy any property here, why did you come? Our company spent $300 to get you down here, and you have taken food off my family’s table. What you did is immoral. Please don’t do it again.” At this Dave retorted, “Your letter was clear, there was nothing in it that said a purchase of real estate was involved, and we had no obligation to buy anything from you. Your invitation was unconditional, I don’t owe you or your family anything and I resent what you just said.” At the end of this uncomfortable exchange, Cathy and Dave left the room with an unpleasant feeling. But the unpleasant feelings did not last long because the drive back through the mountains was truly spectacular. After a few days Cathy
said to Dave, “You know, I’m still mad about what Al said to us at Green Acres. Should we write to his boss, or to the real estate board or to some government agency? You know, if we don’t do something, some poor unsuspecting people might fall for their gimmicks!” Dave replied, “No, I don’t think we should waste any time on this. Most people know, or should know what they are getting into-there are no free lunches! Besides if we complain, Al may lose his job and when we’ll be really taking the food from his family’s table!”
What Are the Relevant Facts?
1. Cathy and Dave are educated and well paid.
2. They received an unsolicited invitation from Green
3. The invitation had nothing in it that said they had
to buy anything from GA.
4. They correctly guessed that the GA sales staff
would put pressure on them to buy real estate.
5. GA was eight hours driving time from Chicago.
6. Al made a sales presentation.
7. Cathy and Dave listened to the presentation.
8. Al said Cathy and Dave had acted immorally and
had deprived him of a chance of earning a sales
9. Dave said that they had fulfilled their obligation, as outlined in the invitation, and had not acted
What Are the Ethical Issues?
1. What is the role of inducements in marketing?
2. What is the responsibility of individuals who
accept inducements? Do they have any moral
obligations to purchase goods if they accept free
gifts from merchants?
3. Is giving attractive gifts to potential buyers an ethical practice? Does the size of the gift or the
4. Cathy and Dave were sophisticated, educated city
folk and did not feel pressured to buy from GA.
Do less educated or less sophisticated consumers
feel pressured to buy merchandise under
enticements of gifts? Would such business practice
be considered ethical?
5. Should Cathy and Dave complain so that other
vulnerable people may not be pressured into
buying expensive property they do not want?
Who Are the Primary Stakeholders?
• Cathy and Dave
• GA’s stockholders
• Other potential consumers, especially the
What Are the Possible Alternatives?
1. Cathy and Dave can forget the incident and do
2. They can file a complaint with GA.
3. They can file a complaint with the appropriate
4. They can write to Al.
What Are the Ethics of the Alternatives?
1. What is the best course of action for Cathy and Dave from the moral standpoint? What is the best
course of action that Cathy and Dave take that will
provide the greatest benefit to the greatest number?
2. Do Cathy and Dave and other potential customers
have rights not to be pressured or induced into
actions they may not wish to take? Do GA and Al
have rights to pursue their business and personal
interests? Were any rights violated?
3. What is the just thing to do in this case? Which alternative distributes the burdens and
responsibilities fairly? If Cathy and Dave act and if
GA improves its practices everyone except Al may
benefit. Not complaining may mean Al will
continue his tactics and undermine GA’s goals
assuming that word would get around and
additional customers will be offended.
What Are the Practical Constraints?
What Actions Should Be Taken?
1. What should Cathy and Dave do?
2. Which alternative would you choose?
3. Which approach (utilitarian, rights, or justice)
makes the most sense to you in this situation?
Clearly, no action could mean unsuspecting people
may be lured into buying expensive real estate
with potentially severe consequences. Complaints
could lead to improved practice and better
performance but could lead to the loss of Al’s job.
4. What is the right thing to do?