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Pete Roberts Case Summary

639 Words3 Pages

Pete Roberts, the controller of Pyramid Printing, has found himself in dilemma regarding a proposal for a discounted sales program for new customers. Pete’s analysis indicates that the prices proposed by the company’s sale manager do not provide for a positive contribution margin. This paper discusses the ramification if Pete accepts the proposal. Moreover, the essay analyzes ethical issues related to this proposal.
Pricing strategies that companies use to determine the prices of commodities differ between companies. Many factors play a role in determining these prices, including cost of production and distribution of commodities. These factors are unique to companies hence packaging and pricing of goods differs. The guiding principles in pricing process therefore must follow ethical and legal considerations to …show more content…

Pete would have violated this act through price discrimination between its old and new customers. The price discount is not sustainable and if the proposal is approved, the company would only provide goods for new customers. The proposal does not address the urgent needs of the company thus risking to cause loses to the company (Areeda & Hovenkamp, 2013). The proposal seeks to give discount to new customers consequently discriminating the old customers who have purchased services and goods from the company. It also lessens healthy competition among companies that provide similar services by creating unfair competition. Pete risks legal actions taken against the company by other companies and old customers, as well as potential fines. According to Federal Trade Commission (n.d.) violations of the antitrust laws under Supreme Court can put Pyramid Printing in a bad position with up to $100 million of criminal

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