1. Chapter 7 Consumer and Community Relations

2. Copyright © Houghton Mifflin Company. All rights reserved.7–2 Consumer Legal Issues With respect to U.S. consumers, legal issues fall under the domain of the Federal Trade Commission (FTC) which enforces federal antitrust and consumer protection laws. Food & Drug Administration (FDA) monitors foods, drugs, medical devices, cosmetics, veterinary products, and potentially hazardous consumer products. Consumer Product Safety Commission monitors injuries resulting from consumer products.

3. Copyright © Houghton Mifflin Company. All rights reserved.7–3

4. Copyright © Houghton Mifflin Company. All rights reserved.7–4 Additional Legal Issues and Relevant Laws Health and safety –Pure Food and Drug Act Credit and ownership –Home Ownership and Equity Protection Act Marketing, advertising, and packaging –Federal Trade Commission Act –Telemarketing and Consumer Fraud and Abuse Prevention Act

5. Copyright © Houghton Mifflin Company. All rights reserved.7–5 Ethical Issues Consumer Bill of Rights –Right to choose –Right to safety –Right to be informed –Right to be heard –Right to seek redress –Right to privacy

6. Copyright © Houghton Mifflin Company. All rights reserved.7–6 Ethical Issues (cont.) Consumerism –The movement to protect consumers from an imbalance of power with business and to maximize consumer welfare in the marketplace.

7. Copyright © Houghton Mifflin Company. All rights reserved.7–7 Philanthropic Issues Consumers are increasingly concerned with organizations’ social responsibility. Organizations are increasingly linking philanthropic efforts with consumer interests in order to strengthen ties to consumers. –Avon—breast cancer fundraising –Home Depot—Habitat for Humanity –Midas—children’s car seats

8. Copyright © Houghton Mifflin Company. All rights reserved.7–8 Community Stakeholders A community includes those members of society who are aware of, concerned about, or in some way affected by the operations and output of the organization.

9. Copyright © Houghton Mifflin Company. All rights reserved.7–9 Community Stakeholders (cont.) Issues of concern include: –Pollution of the environment. –Land use. –Economic advantages to the region. –Discrimination. –Exploitation of workers and consumers. Neighbor of choice –An organization that builds and sustains trust within the community.

10. Copyright © Houghton Mifflin Company. All rights reserved.7–10 Community Relations The organizational function dedicated to building and maintaining relationships and trust with the community. –Often supports local community through philanthropic activities. –More strategic significance within the organization. –Develops community mission statements to identify the needs of the people relative to the organization’s competence.

11. Copyright © Houghton Mifflin Company. All rights reserved.7–11 Common Myths about Community Relations No local government/community consent is necessary. Talking to the community will create trouble. One-way communications efforts are sufficient to improve community relations.

12. Copyright © Houghton Mifflin Company. All rights reserved.7–12 Common Myths about Community Relations (cont.) The community cannot add anything meaningful to this process because it is too technically complex. Community leaders will request costly or unreasonable solutions.

13. Copyright © Houghton Mifflin Company. All rights reserved.7–13 Economic Issues Business is vital to the community. –Buyer-seller interaction stimulates the economy. Companies hire, train, buy supplies, raw materials, utilities, advertising services, and other local goods and services. A company’s departure or retrenchment from a community can be devastating to the local economy. –Downsizing –Plant closings

14. Copyright © Houghton Mifflin Company. All rights reserved.7–14 Legal Issues A company must operate within legal and regulatory parameters. Companies are granted a license to operate. –Business license –Sales tax number Many mega-retailers have faced rejection because people believe they threaten small “mom & pop” businesses.

15. Copyright © Houghton Mifflin Company. All rights reserved.7–15 Ethical Issues Companies may evaluate the role and impact of their decisions on communities from an ethical perspective. Business leaders are taking greater responsibility for determining how they can assist in improving communities. –Supporting education. –Assisting in the development of mass transit. –Supporting environmental initiatives.

16. Copyright © Houghton Mifflin Company. All rights reserved.7–16 Philanthropic Issues Historically this has meant providing support for worthy causes. –Gifts –Grants –Other resources Volunteer programs –Employees donate time in support of social causes (volunteerism). –Communities benefit from the application of new skills and initiative toward problems, and companies develop better community relations.

17. Copyright © Houghton Mifflin Company. All rights reserved.7–17 Strategic Implementation Include community views in corporate planning. Manage, nurture, and continuously assess community relations and needs. Educate and listen to consumers; run surveys to discover strengths and weaknesses in stakeholder relations; hire consumer affairs professionals; and develop a community relations office.