Assessing Financial Performance, your loyalty rewards program product line proposed a marketing and sales campaign targeting low-income neighborhoods. While you were doing your KPI

 

Scenario

In Project Two: Assessing Financial Performance, your loyalty rewards program product line proposed a marketing and sales campaign targeting low-income neighborhoods. While you were doing your KPI analysis, the company’s legal team reviewed the same document to address any legal or ethical concerns.

The company CEO has forwarded you a memo from the legal team that discusses legal and ethical issues. Changes in the plan must be made to address these issues. Without these changes, the legal team will not approve the marketing and sales proposal.

For each issue, the CEO wants you to recommend changes to the proposal that satisfy the requirements the legal team has described. For the legal issues, the company lawyers describe how the company needs to interpret and apply existing laws.

Directions

Your task is to evaluate the memo from the legal department for legal and ethical concerns and recommend ways to address those concerns in alignment with organizational parameters.

  1. Review the memo received from the legal department, available in the Supporting Materials section.
  2. For each legal issue, include the requirements outlined below:
    1. Evaluate the plan for legal issues.
      1. Where in the proposal do the issues occur?
    2. Recommend changes to address the legal concerns.
      1. Cite or quote their language to show what you are addressing.
      2. State what aspects of the plan need to change in some way to address the concern.
      3. Recommend one or more possible changes.
      4. Explain how your recommendations meet the legal requirements.
  3. For each ethical issue, include the requirements outlined below:
    1. Evaluate the plan for ethical issues.
      1. Where in the proposal do the issues occur?
      2. Consider which ethical frameworks apply.
    2. Recommend changes to address the ethical concerns.
      1. Cite or quote their language to show what you are addressing.
      2. State what aspects of the plan need to change in some way to address the concern.
      3. Recommend one or more possible changes.
      4. Explain how your recommendations meet the ethical concerns.
  4. Assess your recommendations for alignment to organizational parameters.
    1. Refer to the mission and vision statement from Project One (linked in the Supporting Materials).

What to Submit

To complete this project, you must submit the following:

Response Memo

Using the Project Three Response Memo Template, create one double-spaced memo of 3 to 6 pages. This memo should address the legal requirements and ethical issues. Check your memo for correct spelling and grammar.

Project Three Guidelines and Rubric1.html

Competency

In this project, you will demonstrate your mastery of the following competency:

  • Make ethically informed decisions based on awareness of legal and organizational parameters

Scenario

In Project Two: Assessing Financial Performance, your loyalty rewards program product line proposed a marketing and sales campaign targeting low-income neighborhoods. While you were doing your KPI analysis, the company’s legal team reviewed the same document to address any legal or ethical concerns.

The company CEO has forwarded you a memo from the legal team that discusses legal and ethical issues. Changes in the plan must be made to address these issues. Without these changes, the legal team will not approve the marketing and sales proposal.

For each issue, the CEO wants you to recommend changes to the proposal that satisfy the requirements the legal team has described. For the legal issues, the company lawyers describe how the company needs to interpret and apply existing laws.

Directions

Your task is to evaluate the memo from the legal department for legal and ethical concerns and recommend ways to address those concerns in alignment with organizational parameters.

  1. Review the memo received from the legal department, available in the Supporting Materials section.
  2. For each legal issue, include the requirements outlined below:
    1. Evaluate the plan for legal issues.
      1. Where in the proposal do the issues occur?
    2. Recommend changes to address the legal concerns.
      1. Cite or quote their language to show what you are addressing.
      2. State what aspects of the plan need to change in some way to address the concern.
      3. Recommend one or more possible changes.
      4. Explain how your recommendations meet the legal requirements.
  3. For each ethical issue, include the requirements outlined below:
    1. Evaluate the plan for ethical issues.
      1. Where in the proposal do the issues occur?
      2. Consider which ethical frameworks apply.
    2. Recommend changes to address the ethical concerns.
      1. Cite or quote their language to show what you are addressing.
      2. State what aspects of the plan need to change in some way to address the concern.
      3. Recommend one or more possible changes.
      4. Explain how your recommendations meet the ethical concerns.
  4. Assess your recommendations for alignment to organizational parameters.
    1. Refer to the mission and vision statement from Project One (linked in the Supporting Materials).

What to Submit

To complete this project, you must submit the following:

Response Memo

Using the Project Three Response Memo Template, create one double-spaced memo of 3 to 6 pages. This memo should address the legal requirements and ethical issues. Check your memo for correct spelling and grammar.

Supporting Materials

The following resource(s) may help support your work on the project:

Document: Memo From Legal Department

This is the memo from the legal team detailing their concerns with the sales and marketing proposal.

Document: Marketing and Sales Executive Summary

This is a proposal from the sales and marketing departments to increase rewards memberships in low-income markets.

Document: Vision, Mission, and Values Statements

This document contains the vision, mission and values statements of your company.

Project Three Rubric

Criteria Exemplary (100%) Proficient (90%) Needs Improvement (70%) Not Evident (0%) Value
Legal Evaluation Exceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative manner Evaluates a plan for legal issues Shows progress toward proficiency, but with errors or omissions; areas for improvement may include demonstrating the ability to evaluate the plan based on legal concerns Does not attempt criterion 18
Ethical Evaluation Exceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative manner Evaluates a plan for ethical issues Shows progress toward proficiency, but with errors or omissions; areas for improvement may include recognizing potential ethical issues Does not attempt criterion 18
Legal Recommendations Exceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative manner Recommends changes to address legal issues Shows progress toward proficiency, but with errors or omissions; areas for improvement may include making appropriate recommendations to the plan based on legal concerns or issues Does not attempt criterion 18
Ethical Recommendations Exceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative manner Recommends changes to address ethical issues Shows progress toward proficiency, but with errors or omissions; areas for improvement may include constructing the needed changes to address the ethical issues Does not attempt criterion 18
Organizational Parameters Exceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative manner Assesses recommendations for alignment to organizational parameters Shows progress toward proficiency, but with errors or omissions; areas for improvement may include identifying the organizational parameters of vision, mission, and values and recommending adjustments to align with those parameters Does not attempt criterion 18
Articulation of Response Exceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative manner Clearly conveys meaning with correct grammar, sentence structure, and spelling, demonstrating an understanding of audience and purpose Shows progress toward proficiency, but with errors in grammar, sentence structure, and spelling, negatively impacting readability Submission has critical errors in grammar, sentence structure, and spelling, preventing understanding of ideas 10
Total: 100%

Course Documents/MBA 500 Project Three Response Memo Template.docx

Cosmetic-and-health

MEMO

To:

Don Washington, Director of Marketing, Rewards Membership

Alva Ramirez, Director of Sales, Rewards Membership Anne Hernandez, Chief Executive Officer

From:

[Insert your name, title as internal consultant]

Subject:

Addressing Legal Team Concerns on Low-Income Marketing and Sales Plan

Executive Summary

[Insert a 3- to 4-sentence summary of the legal team’s concerns, what you were asked to do, and the nature of your recommendations.]

Addressing the Two Legal Requirements

Truth in advertising: Analysis and recommendations

[Insert your analysis and recommendations here.]

Data collection and privacy: Analysis and recommendations

[Insert your analysis and recommendations here.]

Addressing the Three Ethical Concerns

Direct marketing to low-income populations: Analysis and recommendations

[Insert your analysis and recommendations here.]

Transparency in language: Analysis and recommendations

[Insert your analysis and recommendations here.]

Collection and use of consumer data: Analysis and recommendations

[Insert your analysis and recommendations here.]

Organizational Parameters

[Insert a 1-2 paragraph closing summary of recommendations to address the legal team’s concerns regarding alignment to the Company’s mission, vision and values]

Course Documents/MBA 500 Project Three Memo From Legal Department.pdf

MEMO: Concerns about the Marketing and Sales Proposal

To: Marketing and Sales Departments

From: Legal Department

Subject: Legal and Ethical Concerns Regarding Proposal to Increase Rewards Memberships in

Low Income Markets

Executive Summary

We appreciate the Sales and Marketing team’s desire to expand the rewards membership programs into

low income markets and their consideration of potentially mutual benefits to company profitability and

the communities we serve. However, there are two legal requirements and three ethical concerns we

need to address before taking this community outreach proposal further.

The Two Legal Requirements

Because the program you are proposing makes specific claims about the benefits of membership and

presumably captures personal data, we begin with a discussion of two

legal requirements:

1. Truth in advertising

2. Data collection and privacy

Truth in advertising. The U.S. Federal Trade Commission requires that all advertising be truthful and be

supported by evidence.

Pursuant to that, we require that ABC Rewards Membership marketing materials must meet these

requirements drawn from our interpretation of the law.

Requirement 1: We need to be precise in making statements about the program’s benefits.

Requirement 2: Commercial speech must be non-deceptive.

Requirement 3: Advertisers must be able to substantiate direct or implied superiority claims.

While the plan we reviewed is high level and does not detail a complete advertising campaign, some of

the themes outlined in the “Ad Lines” section appear to fail the test of these requirements. Please

address these.

Data collection and privacy. Because this will be a national program, we must ensure compliance with

the most restrictive laws on data collection and privacy. Those laws are found in the state of California.

According to the Office of the Attorney General of California, the California Consumer Privacy Act of

2018 (CCPA) secures new privacy rights for California consumers including “the right to know about the

personal information a business collects about them and how it is shared and used, the right to delete

personal information collected from them (with some exceptions), the right to opt out of the sale of

their personal information, and the right to non-discrimination for exercising their privacy rights.” As

such, we need to ensure we are not collecting any more data than is needed for the purposes of

contacting consumers and shipping merchandise. We must make it convenient and accessible for

consumers to opt out of data sharing.

Even if we are in full compliance with the CCPA, we are particularly concerned about marketing your

program in high schools to children under the age of 18. While high-school aged youths are among our

biggest customers, they are not legal adults and the contractual terms a rewards membership program

would entail, not to mention the data you would collect, would put the schools in an awkward position.

Schools are mandated to protect the privacy and data of their students, including those who are 18.

If you plan to market a rewards program that supports local high schools, you are required to come up

with an alternative approach that does not require the kind of membership that students under 18 must

purchase and that they must share sensitive data to use.

Ethical Concerns

Beyond legal requirements, there are also three ethical concerns that need to be addressed.

1. Direct marketing to low-income populations

2. Transparency in language

3. Collection and use of consumer data

Direct marketing to low-income populations. The populations you are targeting are financially

vulnerable and should be approached only if the company can add value to their lives. It is essential that

the company does not come across as practicing predatory marketing. ABC will need to build trust and

show that the membership program will not be another revenue-generating opportunity that

disadvantages these consumer groups by making promises of paybacks to individuals and communities

that do not come to fruition. Furthermore, we need to ensure that rewards do not encourage excessive

non-discretionary spending among individuals who are struggling just to make ends meet.

An essential aspect of ethically marketing to low-income populations is ensuring that the program is

culturally, economically, and socially appropriate to the market. As such, we need to demonstrate that

the goals of the program align to the areas these consumers desire to improve. At the same time, we

must consider that low income populations are extremely diverse and not everyone will share the same

values.

We know, for example, that in our current, middle- and upper-income rewards program markets, 27.8%

of loyalty members never redeem their points. They enjoy special discounts on purchases that we

sometimes apply to products for card members, but they don’t apply their points. 67% of these non-

redeemers are on auto-renewal plans, which means they choose to pay for yearly memberships they do

not fully use. And 12% of our non-redeeming members who do renew do not make enough purchases

with built in discounts to recoup the cost of their membership.

We do not believe the same under-redemption and under-use practices should occur in a low-income

market. In addition to the ethical issues, we risk negative public relations and other reputation hits if our

rewards memberships end up costing low-income customers more than they redeem.

Another area of concern on this issue is your plan for rewarding local business owners for signing up

members. The fee for processing payments is standard business. The incentives for signing up members

can lead to abuses. For example, if a store employee lives in the neighborhood and that employee gets a

customer to join the rewards program, why does owner receive points on his or her rewards

membership account? And why do store owners get a free membership? We have similar concerns on

this front around giving discounted memberships to influential high school students.

Please suggest changes to the issues we listed above. It is important at the very least that customers in

this market break even on their memberships and that incentives for signing up new customers are

ethically applied.

Transparency in language. It is the responsibility of the company to ensure that all consumers

understand what they will receive from their rewards memberships. Standard language and exchange

for middle-income and high-income populations will need to be adjusted for the low-income population

that may have had fewer educational opportunities or less experience with managing personal finances.

All terms need to be reviewed with low-income populations to ensure their understanding of what the

terms indicate and what their obligations are. Care needs to be taken to clearly articulate the standard

“fine print” in culturally and educationally appropriate language without being condescending or

misleading.

We are particularly concerned about the complexities of the Pro Rata Coupon plan described in the

memo. While we understand a contract may make it clear that the method is in use, which would shield

us at least from a deceptive practice frame, we are concerned at the complexity of the method.

We are also concerned that language in the proposal about plans for donations to local charities and

schools is vague about how precisely that would work. We know that details are to be worked out, but if

you do not have a clear and transparent vision here, you risk not being transparent on roll out. What will

the contributions be based upon? How will they be tracked and reported? What kind of cost will these

be recorded as for TBL purposes?

Please address the pro rata coupon issue and the need for clarity around how charitable contributions

will be determined.

Collection and Use of Consumer Data. Beyond legal requirements, it is critical to ensure that the

collection and use of consumer data does not create vulnerabilities for the low-income populations.

Behavioral profiling is a key issue related to vulnerable populations. It enables companies to offer goods

at different prices to extract the most revenue from everyone—a concept known as price discrimination.

Given the existence of such disreputable practices, we must consider that some low-income populations

may feel targeted and not wish to engage in data collection practices many companies use. As such, the

company must use culturally and linguistically appropriate marketing, and design messaging that

considers the socioeconomic barriers faced by the low-income populations

We mentioned earlier our concerns with data in the context of pre-adults, but we are also concerned

specifically about the plan to ask parents (and grandparents we assume?) for information about their

children’s or grandchildren’s ages and birthdates as part of the membership sign up.

The minimal amount of information you need to sell, issue, and renew a membership rewards card and

number to a consumer is their name, age, address, and if they wish to provide a credit card or ACH

checking account number for auto-renewals, that data.

Please review the birthday dates idea. It is okay to ask for this kind of additional information, but you

must explain how that information will be used, protected, and whether we will share it with other

product lines in the company or third parties.

Course Documents/MBA 500 Projects Two and Three Marketing and Sales Executive Summary.pdf

 

 

 

Executive Summary  

Sales and Marketing Proposal to Increase Rewards Memberships 

 in Low‐Income Markets 

The U.S. Federal Government’s definitions of low income are tied to regional income demographics. For our 

campaign, we define low income as being at 100–200% of the national average poverty line for the 48 contiguous 

states: 

Persons in  Household 

48 Contiguous States and D.C. Poverty Guidelines (Annual) 

  100%  133%  138%  150%  200% 

1  $12,760  $16,971  $17,609  $19,140  $25,520 

2  $17,240  $22,929  $23,791  $25,860  $34,480 

3  $21,720  $28,888  $29,974  $32,580  $43,440 

4  $26,200  $34,846  $36,156  $39,300  $52,400 

5  $30,680  $40,804  $42,338  $46,020  $61,360 

6  $35,160  $46,763  $48,521  $52,740  $70,320 

7  $39,640  $52,721  $54,703  $59,460  $79,280 

8  $44,120  $58,680  $60,886  $66,180  $88,240     Source: 2020 Health & Human Services Poverty Guidelines / Federal Poverty Levels 

According to the U.S. Census Bureau, the total percent of households with incomes up to $49,999 is 37.1%. 

Low‐income populations represent a large untapped market for our company’s rewards membership program. 

However, drawing customers of limited means to this program will require marketing and sales strategies that are 

creative, ethical, and mutually beneficial. 

 

What We Are Proposing 

Our loyalty membership program is proposing a marketing and sales initiative to increase loyalty card 

memberships in low‐income neighborhoods. 

Specifically, we aim to improve the quality of life for both our customers/members and their communities through 

incentives tied to the membership: 

 Our consumers would earn points based on their individual purchases.   Their communities would earn points based on both the number of members in the community and the 

total purchases those loyalty members make. 

Low‐income consumers would realize the benefits of points earned through our program membership. At the 

same time, points earned in aggregate by communities via purchases would be converted into charitable 

donations to nonprofit organizations or schools that serve the neighborhoods or regions of our low‐income 

members. 

Considerations of the Target Market 

As previously mentioned, a key consideration of this initiative is eliminating barriers to access. 

According to the Pew Research Center, among households with incomes below $30,000 a year in 2019, roughly 

30% did not own a smartphone, 46% did not have a desktop or laptop computer, and 44% did not have broadband 

Internet access. According to a recent survey by the FDIC, 25% of U.S. households are “unbanked” or 

“underbanked.” An “unbanked consumer has no bank accounts of any kind—no savings, no checking, no loans. An 

“underbanked” consumer may have a savings and/or a checking account but may also use nonbanking financial 

outlets such payday loan or check‐cashing services. 

In contrast, our current typical rewards member has a household income of $85,000 a year and purchases their 

membership online with a credit or debit card. Most purchases and points redemptions made through this 

membership are also done online. 

 

How to Reach Our New Target Market 

While social media marketing strategies should still be employed, the missing or reduced access to Internet 

technologies among low‐income populations indicate a need for additional channels.  

Direct mailings to individuals in the targeted areas will be one option. But because many of the members of the 

community may not be on the mailing lists, we will want to go beyond direct mail. 

We would also use a temporary hiring agency to recruit members of the community to distribute leaflets and fliers 

to their neighbors, and to place them in community centers and other public spaces. By “other public spaces,” we 

include such strategies as tacking or taping fliers on trees and buildings in the neighborhood, placing fliers under 

car windshields wipers, handing fliers out on busy intersections, creating doorknob tags, or stuffing fliers into 

mailboxes. Which combination of outreach tactics we use would depend on the geography and infrastructure of 

the community. 

To augment the youth market outreach, we propose two approaches. First, we will partner with high schools to 

create a card that can be customized to use school colors, logos, and mascots. In return, the schools will receive a 

regular donation from us based on a percent of sales generated by those who carry and use the school‐associated 

loyalty card.  

As an extension of the school partnership, we will identify students who are influencers among their peers. We will 

recruit them to be ambassadors via discounted memberships and membership points awards credited to their 

accounts. Because we want to reach younger adults who are emerging buyers, these ambassadors will receive t‐

shirts branded with our logo and the school’s mascot so that being a part of the rewards program is associated 

with peer activities and considered “cool.”  

The rewards to ambassador accounts will be based on the growth of memberships associated with the high school 

card. Memberships can come from other students or their family members.  

Secondly, we also propose partnering directly with brick‐and‐mortar merchants to set up kiosks with information 

about the rewards program and ways to sign up in person. We plan to identify merchants who own local 

businesses or franchises—a corner grocer, for example. Our employees representing the diversity of the 

community served would also be available to give presentations at stores and community centers. 

 

Combining the Rewards Program with Other Sales Initiatives 

We currently run ad campaigns in local newspapers, via social media, and other distribution channels that target 

low‐income consumers with discount coupons. We recognize that low‐income rewards members may make 

purchases that combine the use of the membership card with the use of the discount coupon. That is, if two or 

more items are purchased, it is possible that one of them will have&

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