MRKT 661 Week 1 DB Forum 1 Thread Example

Discussion Board Forum 1 Thread: Law, Ethics and a Campus Credit Campaign

MRKT 661 Ethical and Legal Issues in Marketing, Discussion Board Forum 1 Thread

Thread by [Student Name]

The prompt and the payment company are composites standing in for the course's own forum; the scholarly sources and the textbook are real; the requirements follow Liberty's public course guide for MRKT 661.

Thread

A payment company that offers buy now, pay later installments is planning a fall campaign on four college campuses. Students who download the app before move-in weekend will be able to split purchases of laptops, headphones and concert tickets into four interest-free payments, with a $10 credit toward their first purchase. The campaign will run through campus influencers, sponsored posts aimed at users aged 18 to 22 and tables at orientation events. The marketing team has checked the plan with counsel: the offer is disclosed, the late fees are stated in the terms, and nothing in the plan breaks a law. The team's argument is simple: if it is legal, it is fine.

The prompt asks whether that argument holds. Oswald (2011) surveys the large body of law that governs marketing decisions about products, prices, distribution and promotion, and most of it works by setting minimum standards that a marketer must not fall below. Installment products such as this one have grown faster than the rules written for them, which is a reason to be cautious about treating legality as proof of acceptability. The law tells a marketer what will be punished. It does not tell a marketer what is right.

Laczniak and Murphy (2006) make the point directly. One of the seven basic perspectives they lay out is that a marketer acting ethically aims higher than legal compliance, treating the law as the lowest acceptable line of conduct. They argue that the law is a minimum that society can enforce, while ethics concerns what a marketer ought to do when no one is enforcing anything. Their other perspectives include placing people ahead of profit and weighing the interests of everyone a marketing action touches. On that view, the payment company's question is not whether the campaign is legal but whether it treats students as people whose welfare matters or only as a new pool of borrowers.

Carroll (1991) offers a complementary structure. His pyramid of corporate social responsibility places economic responsibilities at the base, legal responsibilities above them, ethical responsibilities above that and philanthropic responsibilities at the top. Each level builds on the one below, and Carroll describes ethical responsibilities as the practices that society expects even when the law does not require them. The payment company has met its economic and legal responsibilities. The campaign falls short at the third level if it encourages young people to take on obligations they do not understand.

Hunt and Vitell (1986) explain how a manager might actually reach that judgment. Their general theory of marketing ethics is descriptive rather than prescriptive: it models how marketers make decisions in situations with ethical content. In the model, a person who perceives an ethical problem considers both deontological norms, rules about which actions are right or wrong in themselves, and teleological evaluations, the likely consequences of each action for each stakeholder, and combines them in an ethical judgment that shapes intentions and behavior. Applied here, a deontological norm might be that a company should not encourage debt among people who cannot evaluate it. A teleological evaluation would weigh the benefits to students who budget well and use installments responsibly against the harm to students who stack several plans and miss payments. The model also predicts that the manager's judgment will be influenced by organizational norms, which is why the team's "if it is legal, it is fine" culture matters.

The question of who is targeted raises the stakes. Surveying the public on a range of targeting strategies, Smith and Cooper-Martin (1997) found that respondents rated a strategy as less ethical as the product grew more harmful and as the target group looked more vulnerable, and the concern held for everyday products, not only for so-called sin products such as liquor and cigarettes. It also increased the likelihood of boycotts and other disapproving behavior. Students in their first weeks away from home are a reasonably clear case of vulnerable consumers: many are managing money alone for the first time, are inexperienced with credit and are making decisions in a period of social pressure and change. Installment credit is not a harmful product in the way cigarettes are, but it can harm a borrower who misjudges future cash flow. The research suggests that the public would judge this campaign harshly, and that the company's reputation, not only its ethics, is at risk.

None of this means the campaign must be abandoned; it means the company should design it for the student it would want to be judged by, the one who is new to credit. I would recommend four changes. First, remove the influencer posts and orientation tables, where the social setting makes careful decisions least likely, and rely on channels students reach on their own. Second, set a low spending limit for new users under 21, raised only after on-time payments. Third, show every installment plan's total due dates in one calendar view in the app, so that a student who opens a third plan sees how the payments pile up. Fourth, waive the first late fee and send a reminder three days before each payment. Each change costs the company something, but each moves the campaign from the second level of Carroll's pyramid to the third.

A Christian view of the campaign adds a further consideration. A proverb puts the matter bluntly: whoever borrows ends up serving whoever lent (English Standard Version Bible, 2001/2016, Proverbs 22:7). The verse does not forbid lending, which Scripture elsewhere permits and regulates, but it recognizes that debt creates a relationship of dependence and that the stronger party bears responsibility for how it uses that power. A company that enrolls students in their first credit product is, for many of them, teaching them how credit works. It should teach the lesson it would want them to learn, and it should be willing to give up some sales from students who are not ready.

There is also a practical argument for going beyond the law. Rules for new credit products tend to follow public complaints, and a campaign that produces stories of students overwhelmed by stacked installment plans invites the regulation the company would prefer to avoid. Exceeding the legal minimum now may protect the business later.

Classmates: do you think the four changes go far enough, or is there a case that a company should not market credit to new students at all?

References

Carroll, A. B. (1991). The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders. Business Horizons, 34(4), 39-48. https://doi.org/10.1016/0007-6813(91)90005-G

English Standard Version Bible. (2016). Crossway. (Original work published 2001)

Hunt, S. D., & Vitell, S. (1986). A general theory of marketing ethics. Journal of Macromarketing, 6(1), 5-16. https://doi.org/10.1177/027614678600600103

Laczniak, G. R., & Murphy, P. E. (2006). Normative perspectives for ethical and socially responsible marketing. Journal of Macromarketing, 26(2), 154-177. https://doi.org/10.1177/0276146706290924

Oswald, L. J. (2011). The law of marketing (2nd ed.). South-Western Cengage Learning.

Smith, N. C., & Cooper-Martin, E. (1997). Ethics and target marketing: The role of product harm and consumer vulnerability. Journal of Marketing, 61(3), 1-20. https://doi.org/10.1177/002224299706100301