PBF 3.02 Consumer Information Notes
Sources of Consumer Information
Product Testing Organizations
•
Test products and services to detect benefits.
– Underwriter Laboratories
Conducts testing and certifies products for safety from electrical shock & fire hazards.
– Association of Home Appliance Manufacturers
Conduct appliance efficiency testing to assist consumers in comparing appliances before they
make a purchase.
• Part of the Energy Star program managed by the EPA.
• Recognized by the US Dept of Energy
– Consumers Union
Mass media advertising created a need for a reliable source of information for consumers.
• Accept no outside advertising, no free samples, employ mystery shoppers, and
technical experts.
• Publishes: Consumer Reports Magazine
Media Sources
•
Provides specific information about products and services.
– Print
– Broadcast Organizations
• Magazines
• Radio
• Newspapers
• Television
–
Internet
Fraud is intentional deception resulting in
injury to others or personal gain.
Government Agencies
FTC - Federal Trade Commission
Works to prevent FRAUD, deception, and unfair business practices.
• Enforces truth and advertising
• Implements national campaigns to alert consumers to their rights
• Protects against predatory or discriminatory lending or unfair loan servicing
• Do NOT Call Registry and mail fraud
Efficacy is the capacity or power to
• Works to prevent identity theft -- including Fair Credit Reporting Act
produce the desired effect.
FDA - Food and Drug Administration
Responsible for protecting the public health by assuring the safety, EFFICACY, and security of:
• human and veterinary drugs
• biological products
• medical devices
FDA Protects:
• our nation’s food supply
Blood products
Cosmetics – safety and labeling
• Cosmetics
Drugs – OTC and prescription
• products that emit radiation.
USDA – US Dept of Agriculture
Keeps our food sources safe.
• Inspect fruit & plants imported from foreign countries
• Oversea the National School Lunch Program
• Inspects meat, poultry, and eggs
• Set nutritional guidelines (Established the Food Pyramid)
Food – labeling, safety, bottled water
Medical Devices – insulin pumps
Microwave ovens, Televisions, X-ray
equipment, sun lamps
Pet food and veterinary drugs
Business Sources
The main function of advertising is to sell.
Product labels provide helpful information about nature of product, how to care for product, where
product was made, and the size of the product.
– Customer Service Departments focus on assisting customers.
– Better Business Bureau (BBB) provide facts about products or services.
A non-profit organization dedicated to building fair, honest relationships between businesses and consumers
• Monitors a company’s record for addressing a customer’s complaint.
• NOT a government organization
–
–
Personal Contacts
“Word of Mouth” advertising
PBF 3.02 Consumer Information Notes
Intro to Business 6e Thomson/South-Western Pg 372-374
Consumer Buying Decisions
Consumer Information Sources:
Consumers have the power to decide to buy or not to buy. Businesses must serve the
needs of consumers. Without satisfied consumers, businesses would not make sales, earn profits, or remain in business. Several
information sources are available to help consumers with their buying decisions.
Product Testing Organizations: Product testing organizations test products and services for the benefit of consumers and
business. Manufacturers pay these organizations to perform safety tests on products. Underwriters Laboratories tests electrical
components of products from all over the world for fire and electrical safety. The UL symbol indicates that the product has been
tested and judged safe for normal use.
The Association of Home Appliance Manufacturers (AHAM) develops and maintains performance standards for
appliances such as refrigerators, air conditioners, and freezers The AHAM seal indicates that a product has met performance
standards. The Carpet and Rug Institute and the Motorist Assurance Program issue other seals of quality. Consumers Union
reports scientific, technical, and educational information about products and services. This nonprofit organization performs
independent tests on consumer goods. It publishes articles in a monthly magazine called Consumer Reports.
Media Sources: Each day, you have access to a range of media sources offering consumer information.
Print Publishers
Many magazines and newspapers provide various types of consumer assistance. General
interest magazines such as Consumers Digest, Good Housekeeping, and Parents provide articles and product information. For
money management, financial planning, and investment advice, you could read Money or Kiplinger’s Personal Finance
Magazine. Specialty magazines and newspapers also provide information about specific types of products or services. These
publications cover topics such as motor vehicles, computers, boats, electronic equipment, travel, and education. Readers can
obtain a better understanding of the technical aspects of these products and services.
Broadcast Organizations Radio and television are valuable sources of consumer information. Most stations carry
programs to inform you about product safety, care and use of products, and shopping tips.
The Internet
Online information has become a very valuable resource for consumers. Most consumer information
sources can be accessed through the Internet. The use of a search engine allows you to obtain specific answers for your consumer
questions.
Government Agencies:
Federal, state, and local governments also inform consumers. The federal government has the
Consumer Information Center, which serves as headquarters for consumer information. This agency puts out a quarterly catalog
of publications. It also maintains an extensive website to assist consumers.
The United States Department of Agriculture (USDA) offers publications and online information about food buying,
meal planning, and nutrition. The USDA also inspects and grades meat and other foods. It makes that information available to
consumers. Other federal government agencies that provide consumer information include the Federal Trade Commission
(FTC), Food and Drug Administration (FDA), Consumer Product Safety Commission (CPSC), National Highway Traffic Safety
Administration, Department of Housing and Urban Development (HUD), and Environmental Protection Agency (EPA).
Every state has consumer protection agencies. These agencies have web sites to provide information and handle
consumer questions. State departments of banking and insurance are available to assist with those areas. Large cities and
counties also have consumer assistance offices.
Business Sources:
As a public service and in an effort to sell things, businesses make consumer information available.
Advertising
Advertising is widely available. It is a popular source of consumer information. The main
purpose of an advertisement is to encourage you to buy. Because of this, you should carefully evaluate this information source.
Advertising can be helpful. Useful advertisements tell you what the product is, how it is made, and what it will do.
Advertisements give facts that you can use to compare the product with other competing products. Beware of advertising claims
that really tell you nothing about the product. If an advertisement states that a product is better, ask, “Better than what?”
Product Labels
A label, attached to or printed on a product, provides useful information. A label will report
the nature or content of a product. The label will also likely tell you what the product is made of, its size, how to care for it, and
when and where it was made. Clothing labels must tell you what the product is made of and must give you instructions for
washing or cleaning.
Customer Service Departments Many businesses have special departments focused on customer service. Some firms
provide customers with booklets on a range of consumer topics. For example, banks and insurance companies publish booklets to
help consumers manage their money. Some large retail firms provide printed materials to help consumers with their buying
problems.
Better Business Bureau
The Better Business Bureau (BBB) can provide helpful information. If you plan to
buy a used car from a particular dealer, you could call the BBB to find out what experiences others have had with that dealer. If
consumers have reported problems with the firm, you could find out about these complaints. BBBs give facts only. They do not
recommend products or firms.
Personal Contacts
An often-used information source is “word of mouth.” This includes information
received from other people. You often trust information provided by others who have bought and used a product. When planning
a purchase, you may talk to someone who already owns the product or has used the service. This word-of-mouth consumer
information can be a valuable resource when making consumer decisions.