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.
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??
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?