Transcript Consumer Stakeholders: Information Issues and Responses

Search the Web
Consumer
Stakeholders:
Issues and
Responses
The Better Business Bureau maintains a web
site useful to both business and individual
consumers: www.bbb.org
© 2005 by Nelson, a division of Thomson Canada Limited.
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Chapter Eleven Objectives
• Identify the fundamental expectations of
consumers
• Identify the major abuses of advertising and
discuss specific controversial advertising issues
• Enumerate and discuss other product information
issues that present problems for consumer
stakeholders
• Describe the role and functions of the
Competition Bureau
• Discuss the strengths and weaknesses of
regulation and self-regulation of advertising
© 2005 by Nelson, a division of Thomson Canada Limited.
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Chapter Eleven Outline
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The Paradox of the Consumer Revolution
The Consumer Movement
Product Information Issues
The Competition Bureau
Self-Regulation in Advertising
Summary
© 2005 by Nelson, a division of Thomson Canada Limited.
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Introduction to Chapter Eleven
Customer relationship management,
the chapter focuses on the evolution and
maturity of the consumer movement
and product information issues, such as
advertising.
© 2005 by Nelson, a division of Thomson Canada Limited.
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The Paradox of the Customer
Revolution
• Historical evolution of marketing
– Focus shifts from problems of production
to problem of marketing.
• Current issues in marketing
– Do consumers think business cares about
their needs?
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The Consumer Movement
Four Basic Consumer Rights
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The Right to Safety
The Right to Be Informed
The Right to Choose
The Right to Be Heard
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The Consumer Movement
Ralph Nader’s Consumerism
• Unsafe At Any Speed
• Nader’s Raiders
• Groups
– Public Interest Research Group
– Center for the Study of Responsive Law
– Public Citizen
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The Consumer Movement
Consumer Problems with Business
• The high prices and poor quality and after-sales service
• The failure to live up to advertising claims
• A basic distrust of business
• Misleading packaging
• The feeling that it is a waste of time to complain
• Inadequate guarantees and warranties
• Failure of companies to handle complaints properly
• Too many products that are dangerous
• The absence of reliable information
• Not knowing what to do to protect oneself
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The Consumer Movement
Consumerism in the 21st Century
• Grassroots
• Unorganized
• Internet
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Product Information Issues
Advertising Arguments
Pros
Cons
• Increases standard of • Lowers standard of
living
living
• Increases satisfaction • Decreases satisfaction
• Efficient ways to
• Inefficient means of
distribute information
distributing information
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Product Information Issues
Need for Information
• That is clear
• That is accurate
• That is adequate
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Product Information Issues
Abuses of Advertising
• Ambiguous advertising
--Weasel words
• Concealed facts
• Exaggerated claims
--Puffery
• Psychological appeals
--Emotional
© 2005 by Nelson, a division of Thomson Canada Limited.
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Product Information Issues
Specific Controversial Advertising Issues
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Comparative Advertising
Exploitive Advertising
Advertising to Children
Advertising of Alcoholic Beverages
Cigarette Advertising
Health and Environmental Claims
Ad Creep
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Product Information Issues
Children’s Advertising
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Advertising
should take into
account the
audience level.
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Use advertising
to nurture
positive and
beneficial
behaviours.
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Realize that
children are
imaginative.
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Incorporate
minority and
other groups as
positive role
models.
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Recognize
advertisings
important part
in a child’s
education level.
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Contribute to
the parent-child
relationship.
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Product Information Issues
Warranties
• Express warranties
– Promise or affirmation of fact that the seller
makes
• Implied warranties
– Creates implied warranties when goods are
sold or leased
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The Competition Bureau
Two Major Activities
• To maintain free and fair competition in the
economy
• To protect consumers from unfair or
misleading practices
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The Role of the Competition
Bureau
Fair Competition:
• Makes the economy work more efficiently
• Strengthens businesses’ ability to adapt and compete
in global markets
• Gives all businesses an equitable chance to
compete/participate in the economy
• Provides consumers with competitive prices, product
choices, and information
• Balances the interests of consumers and producers,
wholesalers and retailers, public interest and private
interest
© 2005 by Nelson, a division of Thomson Canada Limited.
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Self-Regulation in Advertising
Types of Self-Regulation
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Self-discipline
Pure self-regulation
Co-opted self-regulation
Negotiated self-regulation
Mandated self-regulation
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3 Moral Management Models
Immoral
Management:
Customers
viewed as
opportunities to
be exploited
Amoral
Management:
Does not focus
on what is fair
for customers
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Moral
Management:
Customers
viewed as equal
partners
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Selected Key Terms
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Ambiguous advertising
Ad creep
Adequate information
Ambiguous advertising
Clear information
Comparative
advertising
• Concealed facts
• Consumerism
• Consumer’s Magna Carta
• Co-opted self-regulation
• Customer relationship
management
• Exaggerated claims
• Express warranty
• Full warranty
• Implied warranty
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Selected Key Terms (cont’d)
• Limited warranty
• Mandated selfregulation
• Product information
• Psychological appeals
• Puffery
• Pure self-regulation
• Right to be heard
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Right to be informed
Right to choose
Right to safety
Self-discipline
Self-regulation
Warranties
Weasel words
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