Question

A FRIEND FOR LIFE

The Glades Company is a small manufacturer. It has produced and marketed a number of different toys and appliances that have done very well in the marketplace. Late last year, the product designer at the company, Tom Berringer, told the president, Paula Glades, that he had invented a small, cuddly, talking bear that might have a great deal of appeal. The bear is made of fluffy brown material that simulates fur, and it has a tape inside that contains 50 messages.

The Glades Company decided to find out exactly how much market appeal the bear would have. Fifty of the bears were produced and placed in kindergartens and nurseries around town. The results were better than the firm had hoped. One of the nurseries reported: “The bear was so popular that most of the children wanted to take it home for an evening.” Another said the bear was the most popular toy in the school.

Based on these data, the company decided to manufacture and market 1,000 of the bears. At the same time, a catchy marketing slogan was formulated: “A Friend for Life.” The bear was marketed as a product a child could play with for years and years. The first batch of 1,000 bears sold out within a week. The company then scheduled another production run, this time for 25,000 bears. Last week, in the middle of the production run, a problem was uncovered. The process of making the bear fur was much more expensive than anticipated. The company is now faced with two options: It can absorb the extra cost and have the simulated fur produced, or it can use a substitute fur that will not last as long. Specifically, the original simulated fur will last for up to seven years of normal use; the less-expensive simulated fur will last for only eight months.

Some of the managers at Glades believe that most children are not interested in playing with the same toy for more than eight months; therefore, substituting the less-expensive simulated fur for the more-expensive fur should be no problem. Others believe that the company will damage its reputation if it opts for the substitute fur. “We are going to have complaints within eight months, and we are going to rue the day we agreed to a cheaper substitute,” the production manager argues. The sales manager disagrees, contending that “the market is ready for this product, and we ought to provide it.” In the middle of this crisis, the accounting department issued its cost analysis of the venture. If the company goes with the more-expensive simulated fur, it will lose $5.75 per bear. If it chooses the less-expensive simulated fur, it will make a profit of $14.98 per bear.

The final decision on the matter rests with Paula Glades. People on both sides of the issue have given her their opinion. One of the last to speak was the vice president of manufacturing, who said, “If you opt for the less-expensive fur, think of what this is going to do to your marketing campaign of ‘A Friend for Life.’ Are you going to change this slogan to ‘A Friend for Eight Months’?” But the marketing vice president urged a different course of action: “We have a fortune tied up in this bear. If you stop production now or go to the more-expensive substitute, we’ll lose our shirts. We aren’t doing anything illegal by substituting the fur. The bear looks the same. Who’s to know?”

QUESTIONS

1. Is the recommendation of the marketing vice president legal? Is it ethical? Why or why not?
2. Would it be ethical if the firm used the less-expensive simulated fur but did not change its slogan of “A Friend for Life” and did not tell the buyer about the change in the production process? Why or why not?
3. If you were advising Paula, what would you recommend?

Answer 1

The recommendation is considering legal being that the slogan “A Friend for Life,” isn’t making false clams if they change the fur of the bear, being that it not stating a fact the bear will last for a certain number of years. Keeping the statement “A Friend for Life,” can be considered unethical being that it would be considered misleading and there are customers that may think that the bear will last a life.

It would not be very ethical being that the slogan is misleading ultimately lying to the customer, with also is not very ethical to have a planned obsolescence of only 8 months. This would be very wasteful being the impact the environment from the cause of production of replacement products either another bear or a substitute. Creating more waste and increasing the amount of plastic that will sit on our Earth for years. This new business idea exploits both the customers and environment, adjusting the lifeline of the bear increasing consumer speeding to buy a replacement would have many negative outcomes.

My advise would be to add warranty with the new material. This will make the acts of company ethical and it will also help in gaining trust and confidence of customers. This will help in increasing brand loyalty. Since the company is using a substitute to make fur which will last for 8 months, so it would be ethically justified that company should change the slogan. The company can use such slogans which does not highlight timings. They can use slogan like "Child's Best Buddy". This slogan will save the company from guilt of being unethical. For long term purpose it can conduct some research and use some other environment friendly material in place of plastic as company ows some responsibility towards the society and should aim at providing quality products and contributing to the improvement of environment.