Reference no: EM131710990

For the past year, Ginger Harrison had been the assistant brand manager for the Italian Foods Division at Klein’s Foods, a high-value food manufacturer. Since she started at the company, her division had been extremely successful selling Klein’s Foods brand of Italian meatballs both direct-to-consumer and business-to-business. Overall, business with the brand was booming. But with the rising costs of ingredients across all brands, the company had not performed well during the previous two quarters. With a mandate to cut costs in her division and submit a recommendation to management in a week, Harrison was perplexed about what she should do. Her options were limited. Cutting staff and lowering pay were not options, given that the division was already operating as leanly as possible. Additionally, it would cost too much to change the marketing strategy and the packaging on the product. Further, she could not consider increasing the product’s price because it would probably deter customers from purchasing it (market research suggested that the company’s meatballs were a high-value-based purchase decision; thus, any price increase would significantly decrease sales). With one week to come up with a recommendation, the Italian Foods Division staff members met to discuss their ideas. During a three-hour meeting, the room voted (majority rule) that the only way to cut costs was to put less meat in the bags. To remain truthful in their marketing, they would still include the same weight of product, but instead of protein, they would add more sauce and spices. In essence, the customer was receiving exactly what was advertised (four pounds of meatballs and sauce per bag), but Harrison knew this would be misleading the consumers.

Harrison wondered about the ethics of this decision. Even though the product’s marketing was going to be the same, and was in fact accurate, was it ethical to change what the customer received? Did such an action engender ill will in the customer? How would this affect business in the long run?