Consumer
Stakeholders:
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Search the Web
Issues and
Responses
Product and
Service Issues
The Better Business Bureau maintains a web
site useful to both business and individual
consumers: www.bbb.org
© 2005 by Nelson, a division of Thomson Canada Limited.
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The Consumer Movement
Four Basic Consumer Rights
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The Right to Safety (drugs, cars, appliances)
The Right to Be Informed (advertising, labels)
The Right to Choose (options, competition works)
The Right to Be Heard (communicate grievances)
© 2005 by Nelson, a division of Thomson Canada Limited.
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Product Information Issues
Abuses of Advertising
• Ambiguous advertising
--Weasel words (helps…; up to…)
• Concealed facts
--(OK, so most other products also do this…)
• Exaggerated claims
--Puffery (King of Beers)
• Psychological appeals
--Emotional (9/11 tie-ins)
© 2005 by Nelson, a division of Thomson Canada Limited.
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Product Information Issues
Specific Controversial Advertising Issues
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Comparative Advertising (Whopper vs. Big Mac)
Exploitive Advertising (shock sells – soft porn ads)
Advertising to Children (hook them early, vulnerable)
Advertising of Alcoholic Beverages (age/access, Web)
Cigarette Advertising (age/access, sponsorship)
Health and Environmental Claims (truth in advertising)
Ad Creep (concept of No Space from NoLogo)
© 2005 by Nelson, a division of Thomson Canada Limited.
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The Competition Bureau
Two Major Activities
• To maintain free and fair competition in the
economy
• To protect consumers from unfair or
misleading practices
© 2005 by Nelson, a division of Thomson Canada Limited.
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3 Moral Management Models
Immoral
Management:
Customers
viewed as
opportunities to
be exploited
Amoral
Management:
Does not focus
on what is fair
for customers
© 2005 by Nelson, a division of Thomson Canada Limited.
Moral
Management:
Customers
viewed as equal
partners
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Quality and Safety
Two Central Issues
The Issue of Quality
Driven by an increase in
family income and
intense global
competition
© 2005 by Nelson, a division of Thomson Canada Limited.
The Issue of Safety
Driven by the public’s
increasing concern with
safety and business’s
responsibility to address
this concern
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Quality & Safety Issues
Ethical Dimensions
• Contractual theory (‘Here’s the deal’, minimal level)
• Due care theory (Vulnerable customer, do better)
• Social costs view (We lived up to our contract and
exercised due care that product was OK, but still caused a
problem / injury. No worries… we’re good for it.)
© 2005 by Nelson, a division of Thomson Canada Limited.
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Quality & Safety Issues
Changing View
From:
• Caveat Emptor (Let the buyer beware)
To:
• Caveat Vendor (Let the seller take care)
© 2005 by Nelson, a division of Thomson Canada Limited.
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Product Liability
Reasons for the Growing Concern . .
FIRST . . . Product liability has
become a major issue because of the
sheer number of cases where products
resulted in injury, illness, or death and
of financial awards.
SECOND . . . We have become an
increasingly litigious society.
THIRD…Rise in the strict liability doctrine
© 2005 by Nelson, a division of Thomson Canada Limited.
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Business’s Response to
Consumers
Establishing
Consumer
Affairs Offices
Establishing
Product Safety
Offices
Instituting
Total Quality
Management
Programs
(TQM)
© 2005 by Nelson, a division of Thomson Canada Limited.
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