Download Day 2 Consumer issue.. - Personal web pages for people of

Consumer stakeholders
• Among stakeholder groups consumers
rank at the top.
• Consumerism arose just as marketing
began to matter to companies
• Consumer has rights
• 1 to safety, 2 to be informed, 3 to choose 4
to be heard.
• Consumerism is a social movement seeking to
augment the rights and powers of buyers in
relation to sellers
• Importance of consumer champion Ralph Nader.
• ‘The reasonable man adapts himself to the
world; the unreasonable one persists in trying to
adapt the world to himself. Therefore all
progress depends on the unreasonable man’
Consumerism for this century
• High level of grassroots activism in UK
(tanker drivers dispute)
• Global companies under the watchful eyes
of consumers.
• Division of analysis into product
information and the product itself.
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Some consumer problems with business.
High prices / low quality of many products
Failure to live up to advertising claims
Hidden fees
Poor after sales service
Products breaking or going wrong when
brought home
• Misleading packaging or labelling
• Uselessness of complaining
• Your own examples of any of the above??
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Inadequate guarantees and warranties
Poor complaints handling procedures
Dangerous products
Absence of reliable information about
various products and services
• Not knowing what to do with a faulty
product
Product information issues
• Misinformation about a company’s product
• page 515 ‘ Business has a legal
responsibility, and an ethical responsibility
to provide fair and accurate information on
its product or services.’
• Problem with advertising. Is advertising
inherently unethical?
Advertising issues
• Wasteful and inefficient tool of business:
our standard of living would be higher
without it.
• But companies argue that it is beneficial
by raising standards of living and improved
consumer satisfaction
• Helps consumers know about changing
products
• It is an important process in capitalism
• Ambiguous advertising ‘weasel’ words to
mislead consumer? Helps prevent, helps
you look . Or legalese terminology.
• Concealed facts : not telling the whole
truth, but people don’t want to know
everything.
• Problem of fees or hidden charges
• Product plot placement -not needed in
plot of film
• Exaggerated claims or puffery: Budweiser
king of beers
• Psychological appeals to human emotion
or patriotism to sell products Bush using
images of 9/11 in political ads. Importance
of business responsibility in this key area?
Other issues
• Comparative advertising My product
against brand X but restrictions in law are
lessening.
• Sex in advertising. ‘I’m Cheryl fly me’ by
National Airlines but people are put off by
use of sex in advertising
• Advertising to children American children
watch 28 hours of television a week.
Children cannot understand persuasion
• Advertising of alcoholic drinks
• Cigarette advertising
• Health and environmental claims…
‘Because health and environmental claims
attract customers, marketers are tempted
to tout claims that aren’t really valid.’ p 530
• Ad creep People see about 3000 ads a
day!!!! Due to decline of TV audience
• Implied warranty: product can be used for
its intended purpose and
• express warranties, at time of sale
• Extended warranties. Retailer makes $10
on $400 TV set but $50 on a $100
extended warranty
• Self regulation in advertising?
Ethical and stakeholder issues
• What are the ethical and stakeholder
issues around the following
• Nike trainers
• Green and Black’s chocolate
• A life insurance policy
• Fruit : organic , sprayed, genetically
modified
• Cheap T shirts
Consumers of public sector
services
• How can anyone decide the value of local
authority services?
• Think of street lighting and road
maintenance..
• Provision of high quality local education
against help for frail elderly people?
• Acceptance by you of the value of trading
standards and environmental health?