Module 9-1 Project Three: Applying Legal and Ethical Frameworks
Nellieann Galarza Linares
Southern New Hampshire University
MBA-500 Building Business Leaders
Professor: G. Smith
May 20, 2025
MEMO
To:Don Washington, Director of Marketing, Rewards Membership
Alva Ramirez, Director of Sales, Rewards Membership
Anne Hernandez, Chief Executive Officer
From:Nellieann Galarza-Linares, Internal Sales & Marketing Consultant
Subject
:
Addressing Legal Team Concerns on Low-Income Marketing and Sales Plan
Executive Summary
The legal team at ABC Beauty Company has thoroughly examined a recent marketing and sales
campaign focused on low-income markets and identified significant legal and ethical concerns.
This memo aims to illuminate these critical issues and present strategic modifications to the
marketing plan that will effectively address them. We will explore two key legal challenges and
three pressing ethical dilemmas highlighted by our legal experts concerning our outreach to low-
income communities. Each of these concerns will be met with actionable solutions designed to
ensure compliance and uphold our ethical standards. Furthermore, this memo will tie our
proposed recommendations back to ABC Beauty Company’s mission, vision, and values,
reinforcing our commitment to operate as a Triple Bottom Line (TBL) and Corporate Social
Responsibility (CSR) organization. By taking these steps, we can strengthen both our reputation
and our impact in the communities we serve.
Addressing the Two Legal Requirements
Truth in advertising: Analysis and recommendations
A key legal issue outlined in the memo pertains to adhering to truthfulness in advertising. The
memo states, “The U.S. Federal Trade Commission mandates that all advertising must be truthful
and substantiated by evidence.” The marketing and sales strategy proposes several advertising
phrases related to our membership program and its associated benefits. To comply with FTC
regulations, our marketing materials must satisfy three essential criteria:
All claims about the membership program must be accurate and honest.
Commercial messages must be non-deceptive.
Any claims of superiority, whether direct or implied, must be backed by evidence.
The proposed themes in the “Ad Lines” section appear to fall short of these standards. As a
result, it is crucial to revisit and revise the advertisements in detail to prevent misleading
potential customers. It is advisable to assess the current appeal of our messaging and update it in
line with the specified guidelines. Additionally, the legal team raised an ethical concern
regarding the charitable donation slogan, which is currently too vague and lacks specific details
about the donation process. For instance, the phrase “There is no better way to give” lacks
engagement and fails to highlight the unique attributes of our rewards program. A more effective
approach would involve using clear and precise language, such as specifying the percentage of
each member’s purchase that will be donated back to the community and whether there’s a
minimum spending requirement to qualify for this contribution. Moreover, the sales proposal
lacks clarity regarding the individual benefits that customers can expect from the loyalty
program. Thus, it is recommended that the revised proposal clearly outlines that the reward
points members will earn for every dollar spent, ensuring transparency and encouraging
participation in the program.
Data collection and privacy: Analysis and recommendations
When launching a membership program, a company must prioritize the careful collection and
protection of customer data. To steer clear of any legal complications, ABC Inc. should be
selective about the information it gathers, only collecting what is truly necessary for the rewards
program. Specifically, the focus should be on the details required for effective communication
regarding rewards and shipping. Equally important is the commitment to customer privacy. We
must ensure that our customers can easily opt out of data sharing should they feel uncomfortable
at any point. Our goal is to create an inclusive environment that appeals to all age groups, which
is especially critical when it involves minors and teenagers below the age of consent.
To navigate this challenge, I propose offering a trial membership for teens aged 15 to 18 that
requires minimal information, just their name and age. This free trial would give them a taste of
the benefits our loyalty program has to offer. Once they turn 18, they can seamlessly transition to
a full membership or choose to opt out altogether. For our adult members, it's essential to
empower them with control over their purchasing information and any other personal details they
choose to share. Moreover, we can enhance their experience by providing additional incentives
that reward active participation in the membership program. By implementing these strategies,
we not only comply with legal requirements but also foster a trusting and engaging relationship
with our customers. This approach not only safeguards their privacy but also illustrates our
commitment to transparency and customer satisfaction.
Addressing the Three Ethical Concerns
Direct marketing to low-income populations: Analysis and recommendations
Our marketing plan aims to engage “Low-Income communities,” a decision that has raised valid
ethical concerns from our legal department. Our strategies must be both ethical and mutually
beneficial, especially when targeting financially vulnerable populations. ABC Inc. takes pride in
treating all customers with respect and equality, and we must ensure we embody this principle in
our approach. To address these concerns and foster inclusivity, I propose the introduction of a
tiered membership program. This structure would allow us to cater to varied financial interests
while providing an equitable rewards system. Customers of all financial backgrounds would
receive similar benefits, regardless of their spending capacity. By implementing this initiative,
we can broaden the accessibility of our loyalty program, ensuring that it serves a diverse
audience while simultaneously upholding our ethical standards. This approach not only supports
our desire to be an inclusive brand but also reinforces our commitment to fairness and respect for
every customer. Together, we can build a loyalty program that reflects our values and contributes
positively to the communities we serve.
Transparency in language: Analysis and recommendations
The retailer must ensure that customers clearly understand the language surrounding purchases
and the rewards program. Retail communication should be accessible to the diverse
demographics of its customer base, especially for low-income consumers who may have limited
educational resources. To achieve this, all terms and conditions must be articulated, outlining the
financial implications for customers. I recommend offering multiple channels to present this
information. First, customers could agree to the terms during the membership setup, along with a
link to an FAQ webpage that provides a clear breakdown of the terms. This page can be updated
as needed to reflect new information, supporting our commitment to corporate social
responsibility (CSR). Additionally, promotional materials highlighting key terms should be
provided to brick-and-mortar stores with kiosks, facilitating access for customers who may not
have internet access.
Collection and use of consumer data: Analysis and recommendations
The gathering of sensitive information raises important legal and ethical considerations that we
must consider. Our legal team has expressed concerns regarding our data collection practices,
advising that we should only collect the information necessary for the operation of our
membership card program. This information may encompass the customer's name, age, address,
and payment details needed to create or renew memberships. Collecting customer data is crucial
for ABC to analyze purchasing patterns and spending behaviors, which helps us ensure that
popular items are always in stock. However, we must prioritize our customers' trust by
implementing robust security measures, such as password protection, to safeguard their personal
information. Customers should have full access to their data, enabling them to review and update
their information as needed. Additionally, they should be able to view their purchase history and
product interactions to address any fraud alerts or discrepancies. For our younger customers, we
can offer a trial membership that requires minimal information, just their name and age
verification, to reduce the personal data they provide while still allowing them to benefit from
our services.
Organizational Parameters
This memo emphasizes our unwavering commitment to transparency and fairness in all our
operations. The legal department has highlighted the importance of clear and straightforward
language when engaging with our customers, managing data collection, and making advertising
claims. Additionally, we must be mindful of the financial pressures faced by vulnerable
populations and avoid imposing any undue financial burdens on them. By prioritizing
transparency, we reaffirm ABC Corporation’s core mission to foster trust and loyalty among our
customers. Clarifying our advertising messages and curbing predatory practices not only aligns
with our ethical standards but also supports our vision of promoting the well-being of our
community. Through careful examination of the ethical and legal implications of our marketing
and sales strategies, we can constantly refine our approach and eliminate any potentially harmful
language or practices. With the legal department's guidance, we have recognized these critical
issues and developed proactive solutions. Implementing the recommended changes will allow us
to create a revised sales proposal that demonstrates our compliance with legal and ethical
standards, while also adhering to ABC Corporation’s commitment to the Triple Bottom Line
(TBL) and Corporate Social Responsibility (CSR) initiatives. This approach not only protects
our integrity but also strengthens our relationship with our customers, ultimately positioning us
for greater success.
References
Truth in Advertising. (2020, May 7). Retrieved from Federal Trade Commission:
https://www.ftc.gov/news-events/topics/truth-advertising
Groß, C., & Vriens, D. (2019). The Role of the Distributor Network in the Persistence of
Legal and Ethical Problems of Multi-level Marketing Companies.EJournal of Business
Ethics,E156(2), 333–355. https://doi.org/10.1007/s10551-017-3556-9
