Finger Hut Strategy

“Business ethics is the application of ethical values to business behavior. It applies to any and all aspects of business conduct, from boardroom strategies and how companies treat their employees and suppliers to sales techniques and accounting practices. Ethics goes beyond the legal requirements for a company and is, therefore, about discretionary decisions and behavior guided by values. Business ethics is relevant both to the conduct of individuals and to the conduct of the organization as a whole.” With this statement can we say that Fingerhut’s price strategy is unethical? In order to answer this question we need to digest certain issues of “Fingerhut’s Price Strategy” case with the point of views of Roger Crisp “autonomy and creation of desire” and Milton Friedman’s “capitalism and social responsibilities.” Has Fingerhut exploited the low-income consumers by using unfair and deceptive marketing techniques?

Roger Crisp would indefinitely assert that certain question as being true. He would say that Fingerhut had purposely targeted the low-income customers with the motives that they have recognized that there was less challenged present to manipulate them with their persuasive advertisements. Fingerhut would be seen by Crisp as a creator of desires upon the low-income customers. As stated in the case, Fingerhut had built an extensive database about their customers including age, martial status, hobbies, number of children, and birthdays. Crisp would take the fact that they had all that information from their customers that it would be easy for Fingerhut to know what people unconsciously might need and used that information to mail “specialized” catalog to its customers to create those desires upon them. Desires that would influence the customers to want to buy and make it difficult to refuse those offer within the catalog that had easy low monthly or weekly payments. If the catalog were not mailed, those consumers would have not had the desire to buy those certain goods. The matter that Fingerhut business idea was to specialize each catalog with goods that would comply with each customer makes their whole business plan unethical.

Roger Crisp would raise the issues that the marketing techniques of Fingerhut cause their customers to act automatonously. Crisp would affirm his idea with the fact that the specialized mail catalog created desires that forced (instead of made them want) its customers to buy their goods. The idea of making their payments easy, low and displaying them instead of the real end price, Crisp would see as deceiving. Crisp would say that by Fingerhut relating the real price of the goods to low payments in a way is like brainwashing their customers to believe that the item is actually cheaper when in reality their goods were up 100% more expensive then their competitors. The fact that their customers were in the bottom of the wealth pyramid, it could be seen that they were not well educated and probably could not really see the price differences in the goods they were buying and the price that they should, in a fair market, be paying. So with Fingerhut marketing techniques and motives, Crisp would affirm that the low-income consumers were being exploited and therefore Fingerhut was conducting its business unethically.

Milton Friedman would not agree with Roger Crisp that Fingerhut exploited their low-income customers. Friedman would look at the “Fingerhut’s Price Strategy” case in different point of view; he would say that Fingerhut was acting ethically because they were conducting business in a capitalist way and still managed to do social responsible acts. Friedman would say that Fingerhut’s CEO, Ted Deikel, was following his procedures under capitalism which were to conduct its business to generate as much profits as it could while still functioning the business to basic rules of the society. Fingerhut had found a niche in which to function their business and make great profits out of it. Their niche was to offer specialized goods to the low-income customers. A part of our economy that was fast growing and every other company had ignored.

Friedman would also say that Fingerhut was actually helping the low-income society by offering them ways to build credit. As stated in the case the low-income society had no credit at all, so they lived paycheck to paycheck, which made it impossible for their customers to save money and buy certain goods that they needed. Therefore Friedman would say that Fingerhut was doing a social responsible act by extending a credit line to the low-income class of our society. With that credit line Fingerhut’s customers were able to purchase those goods that they needed or desired without having to wait the time and go through the trouble of having to save money. So by the Fingerhut offering the first credit line to the low-income