Kai Bo is a well-known food supermarket in Hong Kong which established in 1991. It mainly sells frozen meat and seafood. Apart from this, it also provides fruit, vegetable and canned food. The company aimed at providing fresh food with a low price. A reporter extracts some foods from Kai Bo and ParknShop to make a comparison, the result is that ParknShop are selling more expensive food in which some products of Kai Bo are priced at half of the ParknShop ones.
The price strategy of Kai Bo Food Supermarket is that they offer the food at a very low price in the hope of capturing a large market share. In an effort to provide these very low prices, Kai Bo controlled its product cost in different ways. In effect, the quality of the products may be unsafe and harmful but the temptation of low list price persuades customers to buy.
Before discussing the ethical issue of Kai Bo, the American Marketing Association (AMA) Code of Ethics should be stated; it promotes 6 basic sets of ethical values that represent what people find desirable, important and morally proper. The 6 values are honesty, responsibility, fairness, respect, openness and citizenship.
Behind the low price, Kai Bo violates several ethnic codes. In 2009, Kai Bo changed the expiry date of some foods. The workers used new tags covering the label showing the original expiry date which is expired. The product is expired and Kai Bo can sell it in a relative low price. The expiry date is issued by the Food and Environmental Hygiene Department. Kai Bo should not change the expiry date themselves. Kai Bo has violated the value of honesty, fairness and responsibility. Honesty means that the firm should be truthful and forthright in dealings with customers and stakeholders. Kai Bo tried to deceive the customers to buy the expired food which may cause health problem. They do not provide truthful information. In addition, fairness means the products should be represent in clear...