It has been three years since Mohammed Al-Tamimi opened his computer repair business, Mo’s Mending Station. Unlike the well-known Nerd Squad of the big electronics retailer, Mo’s Mending Station fixes only computers and does not deal with any other electronics such as TVs, phones, cameras, or appliances. Nor does Mo’s provide any in-home services, such as networking or computer setup. Mo’s main objective is clear: to provide standard repair services for computers and laptops, virus and spyware removal, and data recovery, each at a fixed low price. He charges the competitive rate of $45 per hour for more complicated computer issues.
Mo’s slogan is “Get twice the nerd at half the cost!” This strategy has worked well, allowing Mohammed to grow his business to include six repair technicians and one office manager. However, recent monthly receipts indicate that the demand for Mo’s services may be slowing down. Worried that the Mending Station might be losing its competitive price advantage, Mohammed gathers his staff together for a brainstorming session. Ed Ramsey, who has been with Mo’s since it opened, mentions the possibility that the Mending Station’s low prices may give some potential customers the impression that it offers poor quality service. He suggests hiring a local advertising firm to help brand Mo’s Mending Station as affordable AND high quality by emphasizing its team of professional, experienced, and friendly repair technicians. In other words, put the focus on “twice the nerd ” rather than “half the cost.” Mohammed thinks that this is a great idea and wonders if they can also prepare some statistics to strengthen the message. Because customer receipts include both when a computer is brought to Mo’s (date and time) as well as when the repair is finished, he asks his office manager to select a sample so they can estimate the average service time. Based on 36 receipts, she finds a mean service time of 2 hours and 10 minutes with a standard deviation of 30 minutes. Further statistical analysis yielded a 95% confidence interval for the mean service time of 1.99 to 2.33 hours. Mohammed plans to advertise that 95% of his customers can expect to get their computers back from repair in between 1.99 and 2.33 hours!
He is anxious to include this claim in all of the Mending Station’s future marketing communication materials.
• Identify the ethical dilemma in this scenario.
• Has Mohammed interpreted the confidence interval correctly?
• What are the undesirable consequences?
• Propose an ethical solution that considers the welfare of all stakeholders.
