Marigold Inn’ declining room service made Sharon the Food service manager step up. Sharon decided to make pizza as good as other authentic Italian restaurants. But guests had their doubts, whether a steak and seafood place can deliver the authentic Italian taste. So, Sharon decides to change direction and create Napoli Pizza, which would appear to be an authentic Italian Pizza restaurant with family recipe, to make guests feel that the pizza is not from Marigold’s steak and seafood restaurant. George, Sharon’s manager needs to decide if Sharon’s plan is a good one, and if Marigold should implement it.
The relevant facts of the case –
- George Hansen was the General Manager of Augusta Marigold Inn
- Sharon Coombs was food services Manager if Augusta Marigold Inn. George Hanse is Sharon’s manager
- Marigold Inn witnesses decline in room service for past 2 years
- The guests were actually ordering takeout food and pizza, the empty takeout boxes gave it away.
- To gain back the room service Sharon installed pizza ovens in their existing steak and seafood restaurant.
- The new pizza ovens did not solve the problem as Sharon found out from the survey that the guests thought the pizza did not have the same great quality the takeout pizzas had.
- Sharon worked on improving the pizza quality and it came at par with takeout pizza, but still sales was not going up because guests did not think that pizzas would be good.
- Sharon came up with as idea, of selling the pizzas under a brand name Napoli’s Pizza, and it would have a separate phone number and delivery guys would have different outfit, just to give the guests an impression that the pizza is not from Marigold Inn.
Ethical issues including the extent of George’s responsibility to take action
Creating a separate “Napoli Pizza” just to dissociate from “Marigold Inn” to give the guests the impression that it is an authentic Italian restaurant that uses family recipe, is just wrong and unethical, because none of it is true. Marigold Inn will make the pizzas and they are neither authentic Italian, nor do they have a family recipe.
Guest room would have a brochure for Napoli Pizza, with a phone number that would be different prefix than Marigold’s, just to make the guests feel like they are calling an Italian Pizza restaurant. And this would be false and deceptive, because the call will go to Marigold’s room service.
Marigold Inn’s service personnel will put on Napoli Pizza jacket and hat and deliver to guest room in Napoli Pizza boxes, so from service point of view, it will be great, as the guest will feel special and they will be convinced that Napoli Pizza provides great service. But, it is simply unethical and cheating the customer at a level, because Marigold Inn will run the whole operation under the name “Napoli Pizza”. And, if for some reason “Napoli Pizza” does not do that well, Marigold Inn can simply replace “Napoli Pizza” with something else, and Marigold’s reputation won’t take a hit, because in guest’s eyes Napoli Pizza is the restaurant they are ordering and getting the delivery from, and there is no connection between Napoli Pizza and Marigold Inn.
Various stakeholders, and what is at stake for each one.
The stakeholders are George and Sharon, the Marigold Inn, because based on how “Napoli’s Pizza” works out their reputation can go up or down. George and Sharon might lose their job in case the idea does not work out that well. And the employees of Marigold Inn are stakeholders too for same reason.
The guests of Marigold Inn are stakeholders too, since they are the target customer
The takeout Pizza places and the employees, owners are stakeholders too, since Napoli’s Pizza potentially will reduce their number of customers.
Alternatives and ethics of each alternative.
George, can propose a different approach, although Sharon’s intentions are right and she is working hard to make it work, but her approach is not ethical. George can propose that Sharon serves free sampler platter to every guest so that if guests like the taste they can order.
George can ask Sharon to go ahead with the plan, only with one exception, that Marigold Inn will be associated with Napoli, and guests would know that Napoli Pizza is Marigold’s Pizza business. And Napoli would not have a different phone number, or it will not claim to be authentic family restaurant with family recipes.
George can change the traditional steak and seafood place into a pizza place and provide the room delivery service.
George can give his consent to implement Sharon’s plan as is.
The utilitarian approach is the best possible alternative in this case. As Sharon already did all the hard work and Marigold Inn can actually make pizza as good as those take out pizzas and the blind test has already proven. The only problem is the image guests have in their mind about the steak and seafood house. So, George should first appreciate Sharon’s efforts. And then explain consequences of guests finding out that Napoli Pizza is actually Marigold Inn from an employee or from somewhere else. Then George should propose this alternative, that Marigold Inn should go ahead and sell the pizza. Marigold will provide a free pizza sampler to all guests to spread the awareness that they make good pizza. That way, Sharon’s effort to make pizza will be well utilized, Marigold Inn will make money from room service and guests will get pizza the way they like.
Following are constraints to implement Sharon’s plan as is –
Guests can actually encounter the Marigold Inn’s personals in a different attire, and they might get suspicious.
Another Napoli Pizza might exist in the neighborhood or town, and if Marigold uses the name, they might get into a legal conflict.
Marigold Inn might not get a phone number with different prefix for Napoli Pizza.
End of the day it is cheating, giving guests an impression which is not true, no Marigold’s reputation can tumble in case any guest finds out that the Napoli Pizza is actually Marigold Inn, and it is not just guest, the word can get out from the people who work there in the Inn. And for tax purposes Napoli Pizza will have to get tax number, they will have to provide address and other details on receipt and that receipt can give it away that the address for Marigold and Napoli are same.
How should George respond?
When a product is advertised and publicized to generate sales and create brand loyalty, we can harmlessly say that the marketer is promoting the product McCarthy, Jerome E. (1964). It is done with the aim of enhancing sales, by getting the product in the minds of customers as a way of stimulating demand for the product Boone, L. & Kurtz, D. (1974). Although guests do not have a great perception about Marigold Inn’s Pizza, George should not allow Sharon to go ahead with her plan. Instead George should propose a new plan, where Marigold Inn will run ads about their pizza that tastes authentic Italian, and they can distribute free samples to guests or give discounts to guest to boost sales. It will not be cheating customers from any aspect.
McCarthy, Jerome E. (1964).Basic Marketing. A Managerial Approach. Homewood, IL: Irwin.p. 769.ISBN0256025339.
Boone, L. & Kurtz, D. (1974). Contemporary marketing. Hinsdale, Ill: Dryden Press. ISBN 978-0-03-088518-1.