CHAPTER 8

ConsumerRelations
Chapter Objectives

Todescribecustomersasstakeholders
Toinvestigateconsumerprotectionlaws
Toexaminesixconsumerrights
Todiscusstheimplementationof
responsibilitiestoconsumers
Consumer Relations

process in which an organization creates and

maintains a positive relationship with their
consumers.
Inanutshell,consumerrelationsisfocusedon
communicating with current and potential
customers to get a better understanding of
howtheorganizationcanimproveinmultiple
areas.
Consumer Relations

Customer Relationship Management, also

known as CRM, is a system designed to
further analyze just how organizations can
better establish and maintain positive
relationshipswithcustomers.
social media data, company website
information, marketing information, customer
preferences, previous customer purchases &
currenttrends
Consumer Stakeholders

Individualswhopurchase,use,anddisposeof
productsforthemselvesandtheirhomes
Proprietorsmayownthebusiness,but
consumersownitssuccess.
Responsibilities to Consumers

Theprimaryexpectationofconsumers
towardsthecorporationsisastablesupplyof
goodsandserviceswithdesirablequalityat
therighttime,placeandprice.
SupplyandQualityarethetwofactorsthat
mustbegivenutmostattention.
Responsibilities to Consumers

Improvingthestandardoflivingthrough
deliveryofhighqualityproducts
Treatingthecustomersequallyindifferent
aspectsofthebusinessinteraction
Customersatisfactionhasnowturnedinto
responsibility.
Responsibilities to Consumers

Thewordofmouthadvertisementofa
companyisproventobeeffectivein
increasingproductsalesandrevenue.
Evolutionofcustomersrolesfromcentral
targetasbuyersintoanequallyimportant
stakeholdersleadingthesuccessofany
organization
Responsibilities to Consumers

CorporateSocialResponsibilityisbasedon
threedimensions,economic,socia;and
economic.
Activeparticipationinsocialissuesandco
Consumer Economic Issues

Consumersareprimarystakeholdersbecausetheir
awareness,purchase,useandrepurchaseofproducts
isvitaltoacompanysexistence.
Consumersandbusinessareconnectedbyan
economicrelationship.
Consumersexchangemoneyforgoodsorservices.
Consumersexpecttheproductstheypurchaseto
performasguaranteedbythesellers.
Consumer Economic Issues
Consumerfraudresultsfromintentionaldeceptiontoderive
unfaireconomicadvantagefromanorganization.
Shoplifting
Collusion
Duplicity
Guile
Buyer/sellerdisagreementcanresultin
fraudulentactivities.
Productsnotmeetingexpectations
InventoryshrinkageisestimatedtocostU.S.businessesmore
than$40billionperyear.
Consumer Legal Issues
WithrespecttoU.S.consumers,legalissuesfall
underthedomainoftheFederalTradeCommission(FTC)
whichenforcesfederalantitrustandconsumerprotectionlaws.

Food&DrugAdministration(FDA)monitorsfoods,
drugs,medicaldevices,cosmetics,veterinaryproducts,and
potentiallyhazardousconsumerproducts.
ConsumerProductSafetyCommissionmonitorsinjuries
resultingfromconsumerproducts.
Consumer Legal Issues
RepublicActNo.7394ConsumerActofthePhilippines
policyoftheStatetoprotecttheinterestsoftheconsumer,promotehis
generalwelfareandtoestablishstandardsofconductforbusinessand
industry.
Additional Legal Issues and Relevant
Laws
Healthandsafety
PureFoodandDrugAct
Creditandownership
HomeOwnershipandEquityProtectionAct
Marketing,advertising,andpackaging
FederalTradeCommissionAct
TelemarketingandConsumerFraud
andAbusePreventionAct
Additional Legal Issues and Relevant
Laws (cont.)
Salesandwarranties
MagnusonMossWarrantyAct
Productliabilityabusinessslegal
responsibilityfortheperformanceofits
products
ToySafetyAct
Internationalissues
Ethical Issues

Consumerism
Themovementtoprotectconsumersfroman
imbalanceofpowerwithbusinessandtomaximize
consumerwelfareinthemarketplace
Ethical Issues

ConsumerBillofRights
Righttochoose
Righttosafety
Righttobeinformed
Righttobeheard
Righttoseekredress
Righttoprivacy
Right to Choose

Totheextentpossible,consumershavethe
opportunitytoselectfromavarietyof
productsatcompetitiveprices.Thisrightis
basedonthephilosophyofthecompetitive
natureofmarkets,whichshouldleadtohigh
qualityproductsatreasonableprices.
Right to Safety

Thismeansthatbusinesseshaveanobligation
nottoknowinglymarketaproductthatcould
harmconsumers.
Right to Be Informed

Anyinformation,whethercommunicatedin
writtenorverbalformat,shouldbeaccurate,
adequate,andfreeofdeceptionsothat
consumerscanmakeasounddecision.
Right to Be Heard

Thisrightrelatestoopportunitiesfor
consumerstocommunicateorvoicetheir
concernsinthepublicpolicyprocess.This
impliesthatgovernmentshavethe
responsibilitytolistenandtakeconsumer
issuesintoaccount.
Right to Seek Redress

Consumershavetherighttoexpress
dissatisfactionandseekrestitutionfroma
businesswhenagoodorservicedoesnot
meettheirexpectations.
Right to Privacy

Consumersneedtobeawareofhowpersonal
dataarecollectedandused;andfirmsmust
protectthisinformation.
Philanthropic Issues

Organizationsareincreasinglylinking
philanthropiceffortswithconsumerinterests
inordertostrengthentiestoconsumers.
Strategic Implementation

Includecommunityviewsincorporateplanning
Manage,nurture,andcontinuouslyassess
communityrelationsandneeds
Educateandlistentoconsumers;runsurveysto
discoverstrengthsandweaknessesin
stakeholderrelations;hireconsumeraffairs
professionals;anddevelopacommunity
relationsoffice