Page 380 - Introduction to Business

354 PART 3 Marketing

Ethics in Business

The Use of Incentives by Pharmaceutical Companies

The sales rep of a large pharmaceutical ment. Every freebie given away contributes to the
company walked into a doctor’s office skyrocketing prescription prices.
in New Jersey with samples of a new osteoporosis Sales reps are important to doctors. They provide
drug. The doctor said, “The last rep offered me a trip them with up-to-date information about new
to Florida. What do you have?” The sales rep could medicines—information that they often could not
not offer a trip to Florida, but was empowered to give obtain from other sources. However, the receipt of
free tickets to a Broadway play, free sample products, this information has to be based on trust that the
$1000 if the doctor attended the company’s next edu- information provided is accurate. The quickest way to
cational lecture, and $200 if the doctor would pre- destroy a relationship is to provide bad information!
scribe the new medicine to the next six patients who Salespeople learn quickly that a precious relationship
“fit the drug’s profile.” with a client will diminish if trust is even slightly
Selling pharmaceuticals is a daily exercise in broken.
ethical judgment. Salespeople walk the line between
Source: From “Doctoring Sales,” Sales & Marketing Management by
the common business practice of buying a prospect’s Erin Strout. Copyright 2001 by VNU Business Publications USA.
time with a free meal and bribing doctors to Reproduced with permission of VNU Business Publications USA via
Copyright Clearance Center.
prescribe the drugs. They sell in an industry highly
criticized for its sales and marketing practices, but
find themselves in the middle of the age-old chicken- Questions
or-egg question: Are doctors to blame for the escalat- 1. Should pharmaceutical firms be allowed to give
ing extravagancy of pharmaceutical marketing, or is it doctors incentives for recommending their
the industry’s responsibility to decide the bound- products?
aries? In 2000, it was estimated that pharmaceutical 2. Who is at fault for the escalating extravagancy of
firms allocated around $720 million on event spend- pharmaceutical marketing programs, doctors or
ing. Pfizer led the way with $135 million, $86 million pharmaceutical firms?
for such giveaways as pens, coffee mugs, shirts, and 3. What do you think of the fact that pharmaceutical
umbrellas. Companies’ spending for marketing often firms may spend more on their marketing efforts
exceeds what they spend for research and develop- than they spend on R&D?

LEARNING OBJECTIVE 4
Discuss the ways in which sales personnel can conduct themselves ethically.

Salespeople need to treat customers and potential customers ethically. Failure to
do so will bring reproach on the salespeople, their companies, and the selling pro-
fession. It will also result in lost orders, declining sales, and shrinking profits. In
addition, restrictive legislation is likely to result. A code of ethics for the selling
profession includes

Don’t misrepresent your purpose.
Call on prospects who can benefit from purchasing your product.
Don’t promise what you can’t deliver.
Don’t disparage competitors’ products.
Answer all questions truthfully.
Make sure customers are satisfied.
Handle legitimate complaints and returns promptly and cheerfully.
Observe all laws affecting selling.

reality Think of the last time a salesperson tried to sell you a product or
CH ECK service. Was there anything that the salesperson did or said that you
felt was unethical?

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