1. CHAPTER 8
Consumer Relations

2. Chapter Objectives To describe customers as stakeholders
To investigate consumer protection laws
To examine six consumer rights
To discuss the implementation of responsibilities to consumers

3. Consumer Stakeholders
Individuals who purchase, use, and dispose of products for themselves and their homes

4. Consumer Economic Issues
Consumers are primary stakeholders because their awareness, purchase, use and repurchase of products is vital to a company’s existence.
Consumers and business are connected by an economic relationship.
Consumers exchange money for goods or services.
Consumers expect the products they purchase to perform as guaranteed by the sellers.

5. Consumer Economic Issues
Consumer fraud results from intentional deception to derive unfair economic advantage from an organization.
Shoplifting
Collusion
Duplicity
Guile
Buyer/seller disagreement can result in fraudulent activities.
Products not meeting expectations
Inventory shrinkage is estimated to cost U.S. businesses more than $40 billion per year.

6. 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.

7. 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

8. Additional Legal Issues and Relevant Laws (cont.)
Sales and warranties
Magnuson-Moss Warranty Act
Product liability- a business’s legal responsibility for the performance of its products
Toy Safety Act
International issues

9. Ethical Issues Consumerism
The movement to protect consumers from an imbalance of power with business and to maximize consumer welfare in the marketplace

10. 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

11. Right to Choose
To the extent possible, consumers have the opportunity to select from a variety of products at competitive prices. This right is based on the philosophy of the competitive nature of markets, which should lead to high-quality products at reasonable prices.

12. Right to Safety
This means that businesses have an obligation not to knowingly market a product that could harm consumers.

13. Right to Be Informed
Any information, whether communicated in written or verbal format, should be accurate, adequate, and free of deception so that consumers can make a sound decision.

14. Right to Be Heard
This right relates to opportunities for consumers to communicate or voice their concerns in the public policy process. This implies that governments have the responsibility to listen and take consumer issues into account.

15. Right to Seek Redress
Consumers have the right to express dissatisfaction and seek restitution from a business when a good or service does not meet their expectations.

16. Right to Privacy
Consumers need to be aware of how personal data are collected and used; and firms must protect this information.

17. Philanthropic Issues
Organizations are increasingly linking philanthropic efforts with consumer interests in order to strengthen ties to consumers.

18. 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