Advertising and the Rights of
Consumers
Advertising
• Advertising – business whose main purpose is
to persuade people to buy certain products or
avail certain services.
• Advertisement – process or a way of
communicating to the consumer the benefits
or advantages of using a particular product.
• Advertisements increase profit because they
create demand for a certain product; increase
in demand increases profits.
How Advertisements Create Demand
• Four Ways to Sell a Product:
– Personal Selling or direct selling – advertiser or
agent tries to sell his product face to face with a
consumer (e.g. real estate, insurance).
– Advertising through mass media – radio,
television, newspaper, billboards.
– Advertising through the internet – company
product web sites, email and others.
– Attractive packaging – passive way of advertising
product.
How advertisements Create Demand:
– Appealing to Consumer’s Emotion – emotional
need such as love is used to woo buyers.
– Bandwagon Effect – people buy because others
buy.
– Brand Names – when brand names are well
known; brand loyalty – when consumers
patronize a certain product carrying a particular
brand because they believe it is a good product.
Positive Effects
• Gives important information about a product
– know more about the product (labels and
nutritional facts).
• Saves time – consumers can just choose based
on advertisements.
• Increases product demand – consumers
continue to buy the product.
• Facilitates competition – more products
become available giving consumer’s option.
Negative Effects
• Could Mislead the Public – some give false
information.
• Gets people to buy things they do not need –
convince products that are not needed.
• Increases the price of the product –
advertising cost is part of the price of the
product.
Consumer Rights
Safeguards that protect Consumer Rights:
• Companies / Producers can set rules to
protect consumers.
• Government sets rules – Bureau of Trade
Regulation and Consumer Protection (BTRCP),
Bureau of Food and Drug (BFAD), Bureau of
Product Standards (BPS) and DTI.
• Private sector groups.
Laws that protect Consumer Rights
• Republic Act No. 7394 or Consumer Act of the Philippines –
emphasizes protection and safety of consumers from false
advertising and faulty production.
• Republic Act No. 7042 or the Foreign Investment Act of
1991 – safeguard welfare of consumers and improve the
quality of agricultural products.
• Republic Act No. 3815 or the Revised Penal Code, Article
187 – punishment for selling products made of gold, silver
and other previous metals.
• Republic Act No. 386 or the Civil code of the Philippines,
Article 2187 – responsibility of producers in the case of
death, poisoning, or illness of a consumer caused by the
use or intake of their products.
Consumer Responsibilities
• Primary responsibility of the consumers to be
honest in their dealings with vendors of
products they patronize.
• Shoplifting – stealing products from a store.
• False Claim – returning products that are
already used and asking for a replacement or
a refund on the pretenses that the product is
defective or of low quality.
Application of the Concept of
Consumer Behavior
Traffic Problems
• Traffic becomes a problem because of the use of private vehicles
rather than taking public transportation.
Employment Problems
• Contractualization – practice of employment where the capital or
business owners hire workers on a labor-only contractual basis (i.e.
their contract is subject to renewal on a regular basis).
• Reasons for Contractualization:
– Decreases their cost because no regular benefits are provided to the
contractuals.
– Employees seldom practice their right to organization and freedom of
expression.
Application of the Concept of
Consumer Behavior
Crime Problems
• Fewer legitimate means of livelihood means more
people engaging in illegal professions.
Solving Social Problems (Mainline)
• Traffic – increase parking and registration fees and
increase number of public vehicles.
• Employment Problem – law for benefits for contractual
employees, air grievances from contractual employees.
• Crime – wage law review; education and employment
opportunities.