Amazon Backing Off Hospital Sales

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Amazon is a juggernaut that seems to enter one market after the next.  Most of these ventures are successful for the firm but not all work out well.  A recent example relates to Amazon’s plans to sell pharmaceuticals to hospitals as detailed in this USA Today article.  Amazon’s goal was to apply their logistics expertise and bulk savings benefits to pharmaceuticals and start supplying hospitals directly.  According to the article, this is looking harder than they originally intended for a a couple of reasons.  The biggest issue seems to be challenges disrupting the existing purchasing process.  Hospitals have existing processes and suppliers and they appear to be unwilling to change those processes.  Another possible issue could be logistical – transporting materials that need to be refrigerated.

There are several marketing concepts that could be tied to this article.  There’s a logistics management issue Amazon would have to address, there’s a direct link to personal selling and the potential advantages that is providing incumbents, a general opportunity to discuss the buying behavior of business and organizational customers, and there’s the specific issue with the existing buying centers being unwilling to change their purchasing processes – presumably even when that change could result in lower cost.  That last issue could potentially represent an ethical discussion as well.  If insurance companies pay the bill, should hospitals be worried about cost management?

Facebook Loses Face

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It was recently discovered that back in 2015 Facebook allowed 3rd party Cambridge Analytica to access private data from over 50 million Facebook users without consent from those users.  Cambridge Analytica used that data to build psychographic profiles and use those profiles for targeted political campaigns.  Facebook actually discovered the issue in 2015 and told the offending parties they needed to certify that they deleted the data but they didn’t verify that deletion and they never notified users.  Now it looks like that data was not deleted and has continued to be used for political purposes by Cambridge Analytica.  You can read more about the incident in this article.

Facebook has received a fair amount of negative publicity recently that continues to erode their brand and the trust their customers have in them.  Ask your students how Facebook should respond.  Ask if they think the negative publicity will actually have a material impact on the number of facebook users or ad sponsors.  If students say it won’t have a material impact, ask whether Facebook should do anything about it or not if that’s the case.  This can lead to a rich discussion that covers business ethics, opportunities for competitors to differentiate, opportunities for startups, and more.  What role should the government play, if any, when it comes to regulating use of consumer information for marketing or other purposes?

The Invention of the Price Tag

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The video linked here is a short 3 minute video sourced from NPR’s Planet Money.  It provides a brief, entertaining perspective on the history of the price tag.  Students may be surprised to know that haggling was standard practice in this country for many years.  The video does a good job of discussing not only the change itself but also various factors that led to the change – ethical considerations and issues with scale.

 

 

Truth in Advertising

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We have all seen our fair share of unethical or misleading marketing campaigns in the world.  In the quest to win customers, companies will often do whatever they can to woo consumers to their value proposition.  Unfortunately, that involves blurring the lines of right and wrong far more than it should or needs to.  A few companies have decided to take a stand in the opposite direction.  Dove made headlines over a decade ago when they decided to use more natural models and CVS Health is following suit with a new set of standards for imagery associated with beauty products.  This article talks about the details of that move.  The article also has a good illustration of what an untouched photo looks like compared to a digitally altered image looks like.  CVS says they want to portray more realistic body imagery and will start appending a “beauty mark” to images that have not been altered.  It will also ban any alteration for imagery associated with CVS-brand makeup marketing.

Ask your students if they think this is a good move or a bad move by CVS.  Will authenticity help them sell more product or are consumers more likely to buy from competitors if those competitors continue to use altered imagery?

 

Ethical lines

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This Bloomberg article, “Two Major Apple Shareholders Push for Study of iPhone Addiction in Children“, describes an effort from two Apple shareholders to get the company to add parental tools that limit child access to the phone.  This raises an interesting question which could lead to a good classroom discussion.  What obligations does a company have when it comes to ethical concerns?  While the suggested action in this case is fairly easy for Apple to implement, should they?  When a company has consumers “addicted” to their products do they have any obligation to reduce that addiction?  What if taking the requested steps pushes some consumers to a competitive product?