This is a set of rules for human moral This is a set of rules for human moral behavior. For retailers they can have behavior. For retailers they can have explicit code of ethics or implicit code of explicit code of ethics or implicit code of ethics.ethics.

Explicit code of ethics: Written policy that Explicit code of ethics: Written policy that specifies what is ethical and unethical specifies what is ethical and unethical behavior.behavior.

Implicit: Unwritten but well understood set Implicit: Unwritten but well understood set of rules/standards of moral responsibilities.of rules/standards of moral responsibilities.

ISSUES ABOUT ETHICS IN RETAILINGISSUES ABOUT ETHICS IN RETAILINGWHAT IS ETHICS?WHAT IS ETHICS?

DISCUSSION ON ETHICS IN DISCUSSION ON ETHICS IN RETAILINGRETAILING

Misuse of Company AssetsMisuse of Company Assets

Confidential codesConfidential codes

Employee TheftEmployee Theft

LEGAL & ETHICAL BEHAVIOR IN LEGAL & ETHICAL BEHAVIOR IN RETAILINGRETAILING

In view of the competitive nature and In view of the competitive nature and dynamic environment within which retail dynamic environment within which retail operates, it is important to monitor the legal operates, it is important to monitor the legal and ethical constraints affecting the sector and ethical constraints affecting the sector (Dunne and Lusch, 1999, pp.176).(Dunne and Lusch, 1999, pp.176).

LEGAL & ETHICAL BEHAVIOR IN LEGAL & ETHICAL BEHAVIOR IN RETAILINGRETAILING

Major Federal LawsMajor Federal Laws Pricing constraintsPricing constraints Promotional constraintsPromotional constraints Product constraintsProduct constraints Channel constraintsChannel constraints(see Dunne and Lusch, 1999, pp.177).(see Dunne and Lusch, 1999, pp.177).

LEGAL AND ETHICAL BEHAVIOR LEGAL AND ETHICAL BEHAVIOR IN RETAILINGIN RETAILING

Other Federal LawsOther Federal Laws Mergers/AcquisitionsMergers/Acquisitions Trade AgreementsTrade Agreements Human ResourcesHuman Resources Taxes and SEC (Securities & Exchange Taxes and SEC (Securities & Exchange

Commission) regulationsCommission) regulations Americans with DisabilitiesAmericans with Disabilities

LEGAL AND ETHICAL BEHAVIOR LEGAL AND ETHICAL BEHAVIOR IN RETAILINGIN RETAILING

State and Local LawsState and Local Laws ZoningZoning Unfair Trade PracticesUnfair Trade Practices Building CodesBuilding Codes Blue LawsBlue Laws Franchise LawsFranchise Laws Green River OrdinancesGreen River Ordinances State LicencesState Licences

LEGAL AND ETHICAL BEHAVIOR LEGAL AND ETHICAL BEHAVIOR IN RETAILINGIN RETAILING

Ethical BehaviorEthical Behavior Buying MerchandiseBuying Merchandise Selling MerchandiseSelling Merchandise Retailer Employee – RelationshipRetailer Employee – Relationship

PRICING CONSTRAINTSPRICING CONSTRAINTS

Horizontal price fixingHorizontal price fixing This occurs when a group of competing This occurs when a group of competing

retailers (or other channel members, i.e. retailers (or other channel members, i.e. within the horizontal or vertical distribution within the horizontal or vertical distribution levels) establishes a fixed price at which to levels) establishes a fixed price at which to sell certain offerings.sell certain offerings.

PRICING CONSTRAINTSPRICING CONSTRAINTS

Vertical price fixingVertical price fixing This occurs when a retailer collaborates This occurs when a retailer collaborates

with the manufacturer or wholesaler to with the manufacturer or wholesaler to resell an item at an agreed-on price.resell an item at an agreed-on price.

PRICING CONSTRAINTSPRICING CONSTRAINTS

Deceptive pricingDeceptive pricing This occurs when a misleading price is used This occurs when a misleading price is used

(usually through direct marketing etc.) to (usually through direct marketing etc.) to lure customers into the store.lure customers into the store.

Usually there are hidden charges or even an Usually there are hidden charges or even an item may not be available.item may not be available.

Mr. Edward Heath (former British PM and Mr. Edward Heath (former British PM and the incident of winning a lottery).the incident of winning a lottery).

PRICING CONSTRAINTSPRICING CONSTRAINTS

Predatory pricingPredatory pricing This occurs when a retail chain charges This occurs when a retail chain charges

different prices in different geographic different prices in different geographic areas (e.g. another state) to eliminate/fight areas (e.g. another state) to eliminate/fight competition in that state.competition in that state.

The case of prices of goods in New York The case of prices of goods in New York and DC (e.g. Sears, Macys etc.).and DC (e.g. Sears, Macys etc.).

PROMOTIONAL CONSTRAINTSPROMOTIONAL CONSTRAINTS

Retail promotion decisions are constrained Retail promotion decisions are constrained by two major pieces of federal legislation (a) by two major pieces of federal legislation (a) the FTC Act and (b) the Wheeler-Lea the FTC Act and (b) the Wheeler-Lea Amendment. These are meant to prevent Amendment. These are meant to prevent unfair trade practices.unfair trade practices.

These refer to deceitful diversion of patronage (falsehoods These refer to deceitful diversion of patronage (falsehoods about other competitors), deceptive advertising, and about other competitors), deceptive advertising, and deceptive sales practices.deceptive sales practices.