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Case Analysis

Case Analysis

Selling an ATV to Kids*

All-terrain vehicles (ATV’s) are small gasoline engine-powered recreational machines with either three or four wheels that weigh between 200 and 500 pounds. They ride on large, balloon-like low pressured tires. The adult sports models can reach speeds of 75 miles per hour.

From ATVs’ first introduction, consumer protection groups said that the industry targeted the “nicest people” as potential consumers – children and those under 20. It was said that the three-wheeled vehicles looked like large tricycles and gave parents and children a false sense of security. However, according to engineering experts, ATVs make the transition from stability to instability “practically instantaneously” and often with disastrous results.

An agreement between the dealers and the U.S. government, signed by Honda, Suzuki, Kawasaki, Yahama, and Polaris – all makers of ATV’s – in January of 1988, banned the sales of three-wheeled vehicles in the United States. The agreement stated that only vehicles smaller than 90 cc could be sold to children between the ages of 12 and 16. In addition, it limited the sales of larger four-wheeled ATVs to buyers 16 years of age or older. The 2014 estimate for injuries treated in emergency rooms was 93,700, of which 26% (24,362) were of those under 16 years of age. 

You have read two newspaper articles concerning such studies since your new job began at Marty’s Cycle and ATV. In fact, you have talked them over with Leonard and Ramon, the other two college students who work part time at the store. Their attitude is “don’t worry, we’ve never had a 10-year-old come in to buy a cycle anyway.” They’ve also mentioned that Marty has said that the competition doesn’t have any qualms about selling these ATVs, that it’s just a given in this business that you have to do whatever you can to survive and make a buck. Turn the customer away and he’ll buy his machine somewhere else. Moreover, it’s up to the customer to be informed and look out for himself. If he isn’t prepared, he’s fair game for anyone who wants to sell to him. Marty’s motto, “you get our best deal,” may read nice, but the real deal is “we’ll sell you a deal.” It all sounded reasonable to you, and you have not thought about these problems since.

Your job at Marty’s is primarily commission-based, but in order to build a team sense and increase sales, Marty has instituted a policy that provides for a group bonus when weekly sales climb above a certain amount. On Tuesday morning, your fifth day on the job, a man comes in to look over your selection of ATVs. You introduce yourself and tell him you’ll be happy to answer any questions he has about the 125 cc model, which interests him. After a few questions about speed, acceleration, and how easy the ATV is to operate, he says, “I’m sold! My kid’s gonna love this thing. He’s been asking about one for three weeks since he saw a commercial on TV, with the guys jumpin’ the hills and the river. His eleventh birthday will be a big one, alright.” “He’s eleven?” you ask.
“Not till next Friday. But what the heck, I might as well buy it today, right? He’ll be able to handle it. He’s a strong kid.”

You hesitate, a puzzled look on your face. Marty, who’s been listening to your sales pitch, steps over and says, “Right you are, sir! This baby’s so easy to handle that a real baby could run it with no special training.” “Great! Well, wrap her up.” “Ring it up,” Marty says, pointing at you as he walks into the back room.

It is a $6,200 sale, for which you will receive a 5 percent commission. This is your second sale and your fifth day on a job that will contribute significantly to your tuition in the fall. The money is exciting to you, and so is the sweet smell of success. Leonard and Ramon are also pleased, something you can tell from their interested expressions and not-so-discreet nods, which you catch out of the corner of your eye. You also heard from your two colleagues that Marty’s been having some external financial difficulties that could threaten the business.

Use the ethical decision making model to answer the question, if you’re the salesperson in this situation, what would you do?

Carefully review and follow the instructions provi


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