Based on the situation below, what will happen to the supply, demand and price o

Question

Based on the situation below, what will happen to the supply, demand and price of the product in the short and long terms. And what would the ethical implications be?

Checkers Pizza was one of the first to offer home delivery service, with overwhelming success. However, the major pizza chains soon followed suit, taking away Checker's competitive edge. Jon Barnard, Checkers's founder and co-owner, needed a new gimmick to beat the competition. He decided to develop a computerized information database that would make Checkers the most efficient competitor and provide insight into consumer buying behavior at the same time. Under the system, telephone customers were asked their phone number; if they had ordered from Checkers before, their address and previous order information came up on the computer screen.

After successfully testing the new system, Barnard put the computerized order network in place in all Checkers outlets. After three months of success, he decided to give an award to the family that ate the most Checkers pizza. Through the tracking system, the company identified the biggest customer, who had ordered a pizza every weekday for the past three months (63 pizzas). The company put together a program to surprise the family with an award, free-food certificates, and a news story announcing the award. As Barnard began to plan for the event, however, he began to think that maybe the family might not want all the attention and publicity.

Discussion Questions:

1. What are some of the ethical issues in giving customers an award for consumption behavior without notifying them first.
2. Do you see this as a potential violation of privacy?
3. How would you handle the situation if you were Barnard?

Hello! I am a student and i am studying at University of Economics. And i am interested in manageable subject, so it chanced that i have been given book Business: A changing world by my friend. I like it! This is a good book.And i don't know how to solve this problem suitably. Can you please give me some ways to deal with this solution?

I hope i will hear from you soon! Thank you!

Have a good day!

Explanation / Answer

1. A potential ethical problem that Checkers might have to is exposing the family to the news channel and giving them an award for their consumption behavior without informing them first. Barnard is gone in the right direction by giving a thought to his action before exposing the family to the news channel. Ethics is choosing an action and thinking it through from several alternatives while providing a solution. After analyzing it in several directions, companies can often choose right and wrong actions easily. In this case, it would be a privacy issue for Checkers to give an award to customers without notifying the family of their actions. The family if mislead or unhappy with the public exposure, on the basis of rights can sue Checkers. It can even lead to closing Checkers. So, the ethical issue here would be a privacy concern. It is better to notify them first before taking performing any kind of marketing gimmick.

2. There are two different cases involved in the question about violation of privacy. In the first case, I do not see this as a violation of privacy. By entering their phone number and delivery address to receive pizza, customers already provide their personal information to Checkers. Checkers is not selling that information to outside companies and earn money to gain profit. They are using the information to build their infrastructure to gain a competitive edge. It is often done by many companies- either small or large. By developing a tracking system, they show much they use their resources in-hand toward valuing their customers. It is actually a good note.

I would go one step further and inform customers beforehand over the phone that their information might help them to enter a pool to win a surprise gift. It would help them to gain even more credibility from their competitors and critics. To argue with critics, Checkers are not selling personal secrets or invading customers' information. They are using the information from their own customers to build a competitive edge from their competitors. I do not believe it's a potential violation of privacy, but I would recommend to put out a note through to the customers how their information is used, to gain credibility.

In the second case, on the other hand, without notifying the family first, giving out an award and a news story is definitely a violation of privacy. It is essential to communicate your actions and be honest with your consumers. Customers might not like their social status be exposed to the public. If customers are offended it might sometime lead them to sue Checkers potentially closing the company. So, to sum up, it is essential to communicate and be transparent in your actions.

3. Communication and transparency are key any business. It is essential to inform customers in a proper manner. If I were Barnard, I would let the family know beforehand that the family has been selected to receive free food certificates along with a news story announcing the award for their loyalty to Checkers. Because, as said in the question, the family might not want the attention and publicity. After letting the family know about the award, if they are comfortable enough, Checkers can go ahead and use the story on the local channel for marketing the pizza company. Unless getting permission from the family, it is not correct to surprise them with either the award or news story. Often advertisers call or email customers about awards, and even though Checkers is a legitimate business without communication to the family, its surprisal might be classified as bogus. It is essential to communicate and be transparent in your actions if you are serious about building and receiving competitive edge. By communicating, I am able to gain the family's credibility and in return, I can gain through marketing and building my business in the future.

Hope this helps, thanks!!!

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