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Business and Consumer Law

The commercial and financial success of any business is governed by a large array of marketing activities and arrangements, and these need to be carefully considered if the livelihood of a business is to remain intact. When it comes to the analysis of marketing arrangements that might or might not be made, lots of information is needed before an adequate judgement can happen. This includes environmental factors, consumer attitude, legal considerations, and common sense. In terms of common sense and legality, things like product safety, best practice, fair and legal advertising, the regulation of prices and privacy all come into play and are equally important.

Marketing is an invasive way of increasing the effectiveness of advertising, and at the heart of marketing lies the rights of the consumer. The consumer has the right for free choice, not to be unfairly treated or exploited by a business or organization that relies on them. But the business in question must turn a profit, so how should the business proceed; by lowering manufacturing costs through cheaper materials and bulk production? Whatever is chosen, the law set by the government explicitly states that businesses must act in the best interests of the consumer (Richards, 1990), and this imposes restrictions on manufacturing to regulate prices and eliminate monopolies. Therefore managers cannot avoid the obligation to be responsible for society (Podder, 2004).

Advertising practise in the US incorporates the previously stated factors of common sense, and legality. The consumer base is not a mindless drone, and can tell when advertisers are using tricks to suggest things that they cannot provide (Edman, 2001, p. 417). Though the consumer base is still protected from such practises, with the law stating that promotion and advertising should be honest about the products and services they provide, and should not make fallacious claims or mislead the consumer. Take the Lanham Act for example. Under this act, there are two major types of false representation; claims made that are literally false, or claims that are perceived by many to be literally false but were implicitly claimed (Edman, 2001, p. 417). Those in charge of marketing must be aware of what practises, subjects, themes and approaches are deemed appropriate by the target market, while also conforming to local and societal policy. Control over practise is not always easy but inappropriate methods such as pressure tactics and fallacious claims should be high on the list of problems to be eliminated (Collins et al, 1998).

Product safety and effectiveness is also important. Before products or services are made available, any potential dangers or hazards, either through the result of misuse or not, need to be identified and remedied. The service or product should not pose a danger to consumers in the target market, the public in general, and the environment (Magat, Moore, 1996). For international marketing, marketing methods need to be planned carefully so that upon entry into the market and subsequent expansion, conflicts with local morals or values do not occur. Prices need to reflect the market the product or service is in, and should also be viewed as fair by the consumer. Price crashes and excessive price rises should be equally avoided. Further complications arise with rebates, discounts, price drops and price increases, and guarantees. It is important for the management to understand the customer, and to make decisions appropriate to the quality and price of the product (Krishnamurthi, 2006). Decisions made on the product, its build, quality, availability, packaging and so on, not only have a large influence on the price, but on how much the consumer is willing to pay, and for similar competitor products (Business & Consumer Law, 2005). Taking the iPad as an example, many factors determine its price, and consumer willingness to pay a certain price. Not only that, but tablets from competitors are equally susceptible to these factors. The iPad is expensive, but the high build quality and user functionality, alongside monumental branding makes the consumer willing to pay almost any amount at release. This influences the competitors and the decisions they make on pricing, branding and so on.

Privacy law has a direct affect on commerce. Modern privacy often relates to the leaking, misuse or hacking of personal data such as credit card data over the internet. Protecting the privacy of the public lies at the heart of privacy law, and so the marketer needs to take privacy seriously. The issue of confidentiality is important, and the disclosure of any confidential information could be a detriment to the company and the party who supplied the information (Singleton, 1999).

In short, it is important that the views, beliefs and morals of the marketer are not necessarily the views, beliefs and morals of the average consumer in the target market, especially for international commerce. But having a solid understanding of general ethics, morals, values and customs abroad are crucial for successful marketing and to avoid any issues, problems or setbacks.

References

  1. Singleton, S. Commerce vs. Privacy. USA Today (Society for the Advancement of Education), Vol. 127, January 1999, p. 62.
  2. Business & Consumer Law. 2005. Available at: https://www.lii.org/pub/topic/businessconsumerlaw
  3. Collins, E.L., Farrar, R.T., Moore, R.L. Advertising and Public Relations Law. Lawrence Erlbaum Associates, 1998.
  4. Edman, Th. W., Lies, Damn Lies, and Misleading Advertising: The Role of Consumer Surveys in the Wake of Mead Johnson V. Abbott Labs. William and Mary Law Review, Vol. 43, 2001, p. 417.
  5. Krishnamurthi, K. Consumer law in action.. 2006. Available at: https://www.thehindubusinessline.com/iw/2003/04/06/stories/2003040600591400.htm
  6. Magat, W.A., Moore, M.J., Consumer Product Safety Regulation in the United States and the United Kingdom: The Case of Bicycles. Rand Journal of Economics, Vol. 27, 1996.
  7. Podder, R. Cost-Effective Marketing for Emerging Brands. 2004. Available at: https://www.marketingprofs.com/4/podder2.asp
  8. Richards, J.I. Deceptive Advertising: Behavioral Study of a Legal Concept. Lawrence Erlbaum Associates, 1990.