Marketing Principles CHAPTER 6 SECTION 1

 Government actions have a great impact on business and its operations.  The US Government has three branches: 1.Executive Branch 2.Legislative Branch 3.Judicial Branch

 The system of checks and balances prevents any one branch from becoming too powerful.  Executive Branch: 1.Includes the Office of the President 2.Executive Departments: 1.Interior 2.Commerce 3.Defense 4.Independent agencies, corporations, boards, commissions, committees, and quasi official agencies

 US Department of Agriculture (USDA) – provides inspection, grading, and certification of beef, lamb, and pork  Legislative Branch:  US Congress 1.Senate – two senators from each state 2.House of Representatives – number depends on the size of the state

 Judicial Branch – interprets, applies, and administers the laws of the US.  When the legislative or executive branches pass laws that negatively affect businesses they can then appeal to the judicial branch.  The government spends a lot of money to ensure the safety and general welfare of the US citizens.

 Almost one-third of the GDP is due to government spending.  If a business supplies goods or services to the government, they must adhere to certain guidelines.  In the US, most laws are designed to protect the safety, health, and welfare of individuals.

 The government acts as a regulator to protect consumers, employees, investors, and the environment and this affects business.  At the state and local levels, gov’t agencies are involved with consumer protection.  FDA – Food and Drug Administration – regulates the labeling and safety of food, drugs, and cosmetics

 CPSC – Consumer Product Safety Commission – responsible for overseeing the safety of products such as toys, electronics, and household furniture  EEOC – Equal Employment Opportunity Commission – responsible for the fair and equitable treatment of employees with regard to hiring, firing, and promotions

 OSHA – Occupational Safety and Health Administration – sets guidelines for workplace safety and environmental concerns  Family Medical Leave Act – requires employers that qualify to grant eligible employees up to a total of 12 work weeks of unpaid leave during a 12 month period

 SEC – Securities and Exchange Commission – regulates the sale of securities (stocks and bonds)  EPA – Environmental Protection Agency – protects human health and our environment  FTC – Federal Trade Commission – responsible for enforcing the principles of a private enterprise system and protecting consumers from unfair or deceptive business practices

 Bureau of Consumer Protection: enforces consumer protection laws and trade regulation rules 1.Advertising Division – truth in advertising laws 2.Enforcement Division – enforces laws involving the internet, Postal Service, textile, wool, fur, and care labeling 3.Financial Practices Division – leasing and privacy issues 4.Marketing Practices Division – fraudulent activities and scams 5.International Division of Consumer Protection – governs international market 6.Division of Planning and Information – identity theft and other fraud complaints

 Federal Trade Commission Act – prohibits unfair methods of competition  Sherman Antitrust Act – outlaws all contracts that would limit trade in interstate commerce  Clayton Antitrust Act – reduces loopholes in the Sherman Act  Robinson-Patman Act – prohibits price discrimination

 To ensure economic stability in the US, the gov’t monitors our economy and controls our monetary supply through the Federal Reserve System.  SBA – Small Business Administration – gov’t agency that provides support to small businesses