Problem 1) While at dinner in the dorm last night, a student who lives down the hall and is not a retailing major, told you that ?middlemen are economic parasites who intercept goods flowing from the manufacturer to final consumer to get a markup without adding any value. How would you respond?
Problem 2) As a manager for an on-line music retailer, you have been approached by your manager to develop a competition-based pricing policy. Your manager indicates that because your market is global and pricing of CDs varies by both product and delivery costs, he would like for you to develop a pricing strategy based on your global on-line competitors. Your manager believes that your firm could effectively compete on selection and service if only it could establish a pricing policy that would match competitors, thus eliminating their competitive advantage. In other words, he wants you to gather competitive intelligence from your competitor?s web sites to develop a pricing policy that in effect would make your CDs the exact same price (when delivery charges are included).
Prepare a response to the manager outlining your position on the potential legal and ethical implications of the strategy.