McGraw-Hill/Irwin
Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved.
Consumerism
 Consumerism is a word
with two meanings:
 A movement to promote
the rights and powers of
consumers in relation to
sellers.
 A powerful ideology in
which the pursuit of
material goods beyond
subsistence shapes
social conduct.
Consumer
A person who uses
products and
services in a
commercial
economy.
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Consumerism as
an Ideology
 Consumerism describes a society in which
people define their identities by acquiring
and displaying material goods beyond
what they need for subsistence.
 The full emergence of consumerism came
as economic changes interacted with
cultural and social developments.
 Declining influence of religion
 The industrial revolution
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Consumerism in Perspective
 Marketing research reveals a widespread,
profound effort to find love, status, and individuality
in products.
 Materialism is an emphasis on material objects or
money that displaces spiritual, aesthetic, or
philosophical values.
 Thorstein Veblen, in his book The Theory of the
Leisure Class, challenged the conventional
economic wisdom that consumers bought goods
for their functional utility.
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Consumerism in Perspective
(continued)
 Complaints about consumerism include:
 It leads to commodification of all parts of life
 It encourages unwise, irrational, and
unproductive uses of money
 Heavy consumption is profligate with natural
resources
 Consuming beyond necessity violates “the idea
the God’s world is already full and complete”
 It distorts our values
 It is a pathology of corporate capitalism
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Consumerism as a
Protective Movement
 The idea of collective interest in protecting
consumers dates back to the earliest transactions
between merchants and customers.
 1870s when Populist farmers attacked railroads
 Food and Drug Act of 1906
 The 1960s and 1970s prompted another wave of
legislation to protect consumers and expand their
rights.
 Consumer protection is today a major function of
government.
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The Consumer’s
Protective Shield
 Besides federal laws and regulations, there are
significant protections at the state and local level.
 Every state and local government has extensive
consumer protection laws.
 More than 50 federal agencies and bureaus are
active in consumer affairs.
 These agencies and bureaus are effective despite
changing ideologies in administrations, powerful
critics, budget restraints, and too little staff to meet
all their statutory mandates.
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Product Liability Law
 Beyond regulation, a major restraint on
business is the ability of consumers to file
product liability lawsuits when they are
harmed.
 The tort system is designed to provide
compensation to victims and to deter future
misconduct.
 Product liability is the branch of tort law
that covers redress for injuries caused by
defective products.
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Negligence
 A tort involves either an intentional or a
negligent action that causes injury.
 Obstacles to consumers in early product
liability law:
 Caveat emptor
 Narrow interpretation of the doctrine of privity,
which held that consumers could sue only the
party that sold them the product
 This legal protective wall for manufacturers
was broken down by the milestone case of
MacPherson v. Buick Motor Co. in 1916.
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Warranty
 A warranty is a contract in which the
seller guarantees the nature of the
product.
 An express warranty is an explicit
claim made by the manufacturer to the
buyer.
 An implied warranty is an unwritten,
commonsense warranty arising out of
the buyer’s reasonable expectations.
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Strict Liability
 The doctrine of strict liability established that
anyone who engages in a dangerous activity is
liable for damages to others, even if the activity is
conducted with utmost care.
 The key to strict liability is that the injured person
need not prove negligence to prevail in court.
 Under strict liability an injured plaintiff must prove
only that:
 The manufacturer made a product in a defective condition
that made it unreasonably dangerous to the user
 The seller was in the business of selling such products
 It was unchanged from its manufactured condition when
purchased
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