ETHICAL AND

Group LEGAL ISSUES

One! Arellano, Irish
De Chavez, Camille
Dimamay, Rhealyn
Juan, Caila Andrea
Reambonanza, Missy Nicah
Seña, Princess Erica
Villahermosa, Vhanessa
 ETHICS & PERSONAL SELLING
Ethics
Are the principles governing the behavior of an individual or
a group. These principles established appropriate behavior
indicating what is right or wrong.

Personal Selling
Personal selling is a face-to-face selling technique by which
a salesperson uses his or her interpersonal skills to persuade
a customer in buying a particular product.
EVOLUTION OF SELLING
Selling is any transaction
in which money is
exchanged for a good or
service, or goods to
services.

During a sales
negotiation, the seller
attempts to convince or
“sell” the buyer on the
benefits of their offer.
 ETHICS & PARTNERING RELATIONSHIPS
Ethical principles are particularly important in personal selling.
Most businesses try to develop long-term, mutually beneficial
relationships with their customers. Salespeople are the official
representatives of their companies, responsible for developing
and maintaining these relationships, which are built on trust.
Partnerships between buyers and sellers cannot be develop when
salespeople behave unethically or illegally.
 FACTORS INFLUENCING THE ETHICAL
Personal Goals Social Norms BEHAVIOR OF SALESPEOPLE

Ethical
Costumer Goals Behavior

2.2 This Illustrates the factors that affects

Company Goals the ethical behavior of salespeople. The
personal needs of salespeople, the needs of
Company their companies and customers, company
Policies Personal
code of policies, the values of significant others, and
Ethics the salesperson's personal code of ethics
affects ethical issues.
Laws Values of
significant
other
2.3 Shows how the personal needs of salespeople can conflict with needs of their firms
and their customers. Both the salesperson's company and its customers wants to make
profits. But sometimes objectives are conflicting.
 SELLING ETHICS AND RELATIONSHIPS
The core principle at work in considering ethics in
professional selling is that of fairness. The buyer has
the right to make the purchase decision; further, all
competitors should have fair access to the sales
opportunity.
 RELATIONSHIPS WITH COSTUMERS
The most common principle areas of ethical concern
involving customers include using deception;
offerings, gifts, bribes, and entertainment; divulging
confidential information and rights to privacy; and
back door selling.
Deception
Communicating false information as well as by
communicating true information that leads to
false conclusions.

Bribes, Gifts, Entertainment

Bribes are payments made to buyers to influence their
purchase decisions, whereas kickbacks are payments
made to buyers based on the amount of order placed.
Special treatments
Some customers try to take advantage of their
status to get special treatments from salespeople.

Confidential Information
During sales calls, salespeople encounters confidential
company information such as new product
development, costs, and production schedules.
Backdoor Selling
Salespeople engage in backdoor selling when they
ignore the purchasing agent's policy, go around
around his or her back, and contact other people
directly involved in the purchasing decisions.
 RELATIONSHIPS WITH THE COMPANY
SALESPERSON'S COMPANY
Because salespeople's activity in the field
cannot be closely monitored, their
employers trust them to act in the
company's best interest. They put the
interests of their companies above self-
interest.
Expense accounts
Companies provide their salespeople with cars,
company phones, or a budget and reimburse them
for travel and entertainment expenses.

Reporting Work Time Information and Activities

Salespeople on salary are stealing from their employers
when they waste time on coffee breaks, long lunches,
or unathorized days off.
Switching Jobs
When salespeople decide to change jobs, because
over time, salespeople use this training and
information to build a strong relationship with
their customers.
RELATIONSHIPS WITH COLLEAGUES
Salespeople need to work together with other salespeople.
Unethical behavior by salespeople towards their coworkers, such as
engaging sexual harassment and taking advantage of colleagues,
can weaken company morale and harm the company's reputation.

Sexual Harassment
It includes unwelcome sexual chances advances, request for sexual
favors, jokes or graffiti posting sexually explicit material on
bulletin boards or cubicle walls, and physically products.
RELATIONSHIPS WITH COMPETITORS
Making false claims about competitors product or sabotaging
their efforts is clearly unethical and often illegal.
Legal issues
Society has determined that some activities are clearly unethical
and has created a legal system to prevent people from engaging in
these activities.
Statutory Law
Is based on legislation passed either by state legislatures or by
congress. The main statutory laws governing salespeople are the
Uniform Commercial Code and anti-trust laws.
Administrative law
Are estbalished by local, state, or federal regulatory agencies. The
federal trade commision is the most active agency in developing
administrartive laws affecting salespeople.

UNIFORM COMMERCIAL CODE

Uniform Commercial Code (UCC) is the legal guide to
commercial practice in the united states. The UCC defines a
numbers of terms related to salespeople.
Agency
A person who acts in place of his or her company is an AGENT.
Authorize agents of a company have the authority to legally
obligate their firm in a business transaction.
Sale
Ucc defines a sale as "the transfer of title to goods by the
seller to the buyer for a consideration known as price.
Title & Risk of loss
If the contract terms specify free on board (FOB)
destination, the seller has title until the goods are received
at the destination.

Oral versus written agreements

In most cases oral agreements between a salesperson and
a customer are just as binding as written agreements.
Obligations and performances
When the salesperson and the customer agree on the terms of a
contract, both firms must performs according to those terms in
"GOOD FAITH" which means they have to try to fulfill the contract.

Warranties
It is a assurance by the seller that the products will performs
as presented. Sometimes warranty is called Guarantee.

Expressed Warranty
Is an oral or a written statement by the seller.
Implied Warranty
Is not actually stated but is still an obligation
defined by law.

MISREPRESENTATION OR SALES PUFFERY

In their enthusiasm salespeople may exaggerated the performance of
products and even makes false statements to get and order. Over time,
common and administrative laws have defined the difference between
illegal misrepresentation and sales puffery.
 Sales puffery
refers to the use of exaggeration and hyperbole, sometimes to
extreme levels, to promote a product or service. Puffery advertising
examples in common marketing and sales phrases include: The best
product for the job.

Misrepresentation
is a false statement of a material fact made by one party which affects
the other party's decision in agreeing to a contract. If the
misrepresentation is discovered, the contract can be declared void.

False Claims act or Lincoln Law

This law enabled a person bringing a claim of fraud to share in the
proceeds if the contractor was found guilty and damages are assessed.
ILLEGAL BUSINESS PRACTICES
The Sherman Act of 1980, the
clayton act of 1914, The Federal
Trade Commission Act of 1914, and
the Robinson-Patman Act of 1934
prohibit unfair business practices
that may reduce competition.
It occurs when a salesperson
makes unfair or untrue statements
to customers about a competitor,
BUSINESS DEFAMATION
it's product, or it's salespeople.
These statements are illegal when
they damage the competitors
You should avoid making
reputation or reputation of the negative comments about a
salespeople. competitor, it’s salespeople, or
it’s product unless you have
proof to support the statements.
 RECIPROCITY
Special relationship in which two companies
agree to buy products to each other such
interrelationship can lead to a greater trust
and cooperation between the firms. However,
reciprocity agreements are illegal if one
company forces another company to join the
agreement.
TYING AGREEMENTS
A buyer is required to purchase one
product in order to get another product.
Tying agreements are illegal, they are
only legal when the seller can show the
products must be used together.
 Conspiracy and Collusion
Agreement between competitors before customers are
contacted is a conspiracy, whereas Collusion refers to
competitors working together while the customer is making a
purchased.

Interference with competitors

Salespeople may illegally interfere with competitors by:
•Trying to get a customer to break a contract with a competitor.
•Tampering with a competitor's product.
•Confusing a competitor's market research by buying merchandise from
stores.
Restriction on Resellers
At one a time it was illegal for companies to established a
minimum price below which their distributors or retailers
could not resell their products.

Price discrimination
As a seller giving unjustified special prices, discounts, or
services to some customers and not to others.
Privacy Laws
Limits the amount of information that a firm can obtain
about a consumer and specify how that information can be
used or shared.

Do-Not-Call Laws
The Federal Do-Not-Call Registry originally took effect in
2003 and was strengthened in 2007, and limits the
conditions under which anyone on the registry may be
telephoned at home or on a cellphone.
 INTERNATIONAL ETHICAL AND ILLEGAL ISSUES
Ethical and legal issue are complex for selling in
international markets. Value judgements and laws vary
widely across cultures and countries. Behavior that is
commonly accepted as proper in one country can be
completely unacceptable in another country.
 RESOLVING CULTURAL DIFFERENCES
Cutural relativism and ethical
imperialism. Cultural
relativism is the view that no
cultures ethics are superior.

Ethical imperialism is the term used

to describe a situation where a code
of ethical behavior or attitude is
imposed on another community or
society
 LEGAL ISSUE

The Foreign Corrupt Practices Act makes it illegal for

US Companies to pay bribes to foreign officials;
however an amendment to the act permits small
lubrication payment when they are customary culture.
 STATUTORY LAW ADMINISTRATIVE LAW COMMON LAW
grows out of court
Is based on legislation are established by
decicions. Precedents
passed either state local, state, or set by these decisions
legislatures or by federal regulatory fill in the gaps where
Congress. agencies. no law exist.
SELLING YOURSELF
Start working on your
professional reputation now.
Whether or not you decide to
create on intentionally, you
are building that reputation
anyway.
WHAT IS SALES ETHICS?
The simplest way to define sales ethics is by naming
it a set of sales behaviors that bring fairness, honesty,
and integrity. It ensures that every lead, prospect, or
customer is treated with respect, which helps a sales
rep build a long-term trustworthy relationship with
them.
HOW TO INCORPORATE AN ETHICAL CULTURE
IN YOUR SALES TEAM?
Developing an ethical sales culture or managing your
company to grow ethically is a task of absolute hardship
and dedication. It needs to be implemented from every
facet of the organization. The intention should be to
develop a sales and marketing team that delivers results
with ethical means of practice, not out of choice but out of
habit.
 Five ways or step-by-step approach to building
such an ethical environment
1. Hire the right salesperson
It all starts with hiring the right sales rep for your company. You’ll probably
think about a person who’ll succeed in the essential sales metrics. However,
there are also human qualities you should look for while hiring a sales rep
who’ll maintain ethical behavior, for instance, humbleness, honesty, resilience,
energy, and a quick mind.

2. Develop ethical guidelines

Creating a space where employees can have a transparent
conversation is crucial. Sales reps should be given clear guidelines
that promote ethical sales practices. This enables them to operate
efficiently and ethically amidst a lot of challenges.
3. Create a culture of ethical values
When we say creating a culture of ethical values, it’s time everyone in the team
started implementing the code of ethical conduct sincerely. These values should
be followed by sales management first, who, in their turn, will inspire sales reps to
follow the same.
4. Reward the right behavior
Another way to make ethical sales behavior a habit is to appreciate your people’s
efforts in behaving ethically. Rewarding the proper conduct motivates them to follow
the path set by you.
Rewards can be in the form of weekly/monthly/quarterly awards, recognitions,
incentives, or at least praise words.

5. Run regular training sessions

Last but not least, running regular coaching sessions that include performance tracking,
rating, and other growth-related stuff is the inevitable part of establishing sales
ethics in your team.
 IMPORTANCE OF ETHICS IN SALES MANAGEMENT
The whole idea of introducing sales ethics in the sales team revolves
around understanding its importance. Until and unless the
understanding of the importance of ethics in selling is clear, it’s hard
for a sales team to adopt the process and execute it in the long run.

The main benefit of fostering ethical behavior is that it helps you

build trust. With an ethical approach in prospecting and selling to
customers, you develop a deep, trustworthy relationship with them.
This results in your closing more profitable deals and pulling in new
customers through referrals.
Unfair or deceptive business practices
An unfair or deceptive business practice is a claim that would likely mislead the
average person. This claim may also take advantage of a person's inability to
protect their interests during negotiations.

Types Of Deceptive Practices

Misleading Advertising
Advertising is an important part of any business selling products or services.
This is the best way to gain more customers and boost revenue. Unfortunately,
misleading or false advertising is a common issue to navigate for all of us as
consumers.
Overcharging or price-fixing
As consumers, we’re all looking to save where we can. That’s why the price of goods
and services is an important aspect of the buying process. There are some instances
where companies may illegally overcharge or fix prices, leading to deceptive trade
practices.

Commercial fraud
Commercial fraud refers to a deliberate business action that can involve dishonesty or
criminal activity. While there are many different fraudulent activities that can arise in
business dealings, some of the most common include:
Misappropriation of funds Conspiracy
Fraudulent expense claims Breach of contract
Unauthorized financial withdrawals Bribery
False accounting to mislead shareholders Tax evasion
Breaches of fiduciary duty Overstating company profits
Commercial misrepresentation
Making false or misleading statements to urge another party into
a contract can lead to a commercial misrepresentation case.

Defamation
A competitive market is good for our economy, but unfortunately, it can
lead to issues of defamation. This occurs when a company uses deceptive
practices to reduce a competitor’s sales or reputation. It is similar to false
advertising as it is built on misrepresentation and false statements that are
designed to mislead the public. When these comments are made in written
form, such as newspaper articles or books, we commonly call them trade
libel.
WHAT IS NON-CUSTOMER-ORIENTED BEHAVIOR?

Non-customer-oriented behavior: Most buyers will not buy

from salespeople who are pushy and practice the hard sell.
Too much is at stake to fall for the fast-talking, high-
pressure salesperson.
THANK
YOU!