Question

Mathis, Inc. is a designer and manufacturer of women’s clothing and specializes in high-end women’s winter fashions. Normandale, a retailer, sells high-end products in malls throughout the country. With Mathis’s high costs, Normandale is unable to make a profit from the sale of Mathis’s products. Countess Lori-Ann (CLA) is a Mathis competitor. Normandale sends photographs and samples of the Mathis line to CLA and instructs them to make an identical line at a lower price. Mathis labels are easily discernable in the photographs and the samples have the Mathis label attached. CLA copies the Mathis line for Normandale. CLA sells the clothing to Normandale at a low price allowing Normandale to sell the products for a total gross profit of nearly $3 million, an increase of nearly 50% over its sale of Mathis products. Mathis discovers that Normandale is selling counterfeit products, and sends several cease-and-desist letters to them—to no avail. Mathis then sues Normandale alleging Normandale has engaged in illegal conduct. Normandale counters that it did nothing wrong.

Was it ethical for Normandale to sell the alleged knock-off products at a lower price? Explain

Answer 1

No i don't think it was ethical at all for Normandale to sell the knock off products at a lower price as it can be directly attributed to unlawful or unpermitted imitation of products.

As due to sending the photographs and samples of the Mathis production line to CLA , Normandale is engaging itself in a fraudulent and deceiving activity. On account of being a direct distributor of Mathis incorporation , thus engaged in legal agreement with Mathis , Normandale was subject to maintain privacy and property of Mathis which he rather exploited for a private gain.

So through instructing the CLA to imitate and make an identical line of products through supplying the catalogue of Mathis to CLA in order to sell these products at a lower price , Normandale is acting unethically and involving in an illegal conduct.

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Thus it can be concluded , since any act that leads to private gain by harming others or resulting in loss for others cannot be termed as erhical in any sense.

Because this practice of Normandale might result in loss of market share , decrease in customer loyalty and affect the brand and goodwill of Mathis by selling products that are less superior and less quality efficient and thus not worth the price charged , which inturn will hamper the business of Mathis in the formnof customer unsatifaction, resulting in loss of customer base .

The another most important fact to note is that Normandale is not only deceiving its dealer but also the customers

Providing customers low quality or low end products in the brand name of Mathis , but charging the price as high as Mathis high end products , Normandale is cheating on its customers also for its private gains, by supplying products not worth the price.

Thus for exploiting the customers as well as deceiving Mathis ,and his reputation, Normandale is not in any way ethical and Mathis is absolutely right in suing it.

hope i explained well

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