Archive for the ‘Marketing’ Category
Most marketers comply with laws and regulations. However, noncompliance can scar a firm’s reputation and hurt profits. Most companies fight regulations they consider unjust. The regional Bell operating companies filed lawsuits to protect their turf against competition from long- distance carriers and cable companies, while GTE claimed the deregulation of local phone service was unconstitutional. increases. Inflation would restrict purchases less severely if income were to keep pace with rising prices; but often it does not. Inflation increases marketers’ costs, such as expenditures for wages and raw materials, and the resultant higher prices may, therefore, negatively affect sales.
Inflation makes consumers conscious of prices, especially during periods of high inflation. This influence can lead to three possible outcomes, all important to marketers: (1) consumers can elect to buy now, in the belief that prices will be higher later (an argument that automobile dealers often cite in their commercial messages); (2) they can decide to alter their purchasing patterns; or (3) they can postpone certain purchases.
Over the past 20 years, the United States’ rate of inflation has slid from 13.6 percent in 1980 to below 3 percent in 2002. Many economists predict that similarly low levels will continue throughout this decade. At these low levels, inflation may not affect the economy as strongly in the future as it has in the past.
Marketing activities also feel the effects of activities by public and private consumer interest groups and self-regulatory organizations. Consumer interest groups have mushroomed in the past 25 years. Today, hundreds of these organizations operate at the national, state, and local levels. Groups such as the National Coalition Against Misuse of Pesticides seek to protect the environment. People for Ethical Treatment of Animals (PETA) is an activist group opposing use of animals for product testing. Other groups attempt to advance the rights of minorities, elderly Americans, and other special-interest causes. The power of these groups has also grown. Pressure from antialcohol groups has resulted in proposed legislation requiring health warnings on all alcohol ads and stricter regulations of alcoholic beverage advertising.
Self-regulatory groups represent industries’ attempts to set guidelines for responsible business conduct. The Council of Better Business Bureaus is a national organization devoted to consumer service and business self-regulation. The Council’s National Advertising Division (NAD) is designed to promote truth and accuracy in advertising. It reviews and advocates voluntary resolution of advertising-related complaints between consumers and businesses. If NAD fails to resolve a complaint, an appeal can be made to the National Advertising Review Board, which is composed of advertisers, ad agency representatives, and public members. In addition, many individual trade associations set business guidelines and codes of conduct and encourage members’ voluntary compliance.
In an effort to protect consumer privacy, the Direct Marketing Association (DMA) recently approved new rules requiring customers to be notified if information about them—including their name and address—was being shared with other marketers. Companies must also tell consumers that they have the option to not have their information shared. The new rules are intended to prevent unwanted mail or phone solicitations from reaching consumers and to protect consumers’ privacy. These new rules apply to nearly 4,500 DMA member firms and include 2,600 Internet companies, catalogs, banks, financial institutions, publishers, not-for-profits, and book and music clubs.16
As mentioned earlier, regulating the online world poses a challenge. Favoring self-regulation as the best starting point, the FTC sponsored a Privacy Initiative for consumers, advertisers, online companies, and others as a way to develop voluntary industry privacy guidelines. The Interactive Services Association is also working on its own privacy standards.