MANUFACTURERS & VENDORS - Business Ethics - Definitions

How far must manufacturers and their representatives go to make their products and services completely safe?

WHAT Is the relationship between a business and its customers? a contract, or is there more to it than that?

Hos does the fact that companies usually know more about their products than their customers IMPACT their duty to protect customers from injury or harm?

What responsibility do businesses have for customer injuries no one could reasonably have foreseen or prevented?

What about customer's privacy - what obligations do companies have?

MARKET APPROACH TO CONSUMER PROTECTION:

Consumer safely is seen as a good that is most efficiently provided through the mechanism of the free market whereby sellers must respond to consumer demands.

PROBLEMS WITH THE ASSUMPTION OF FULL INFORMATION:

• Many products are too complex for consumers to understand
• Markets cannot provide consumers with product information.

FREE RIDERS:

individuals who enjoy the benefits of a good without paying their share of its costs.

RATIONAL UTILITY MAXIMIZER:

A person who has a well defined and consistent set of preferences, and who knows how personal choices will affect those preferences.

PROBLEMS WITH THE ASSUMPTION OF RATIONAL UTILITY MAXIMIZATION:

• Few people are good at estimating probabilities.
• People are irrational and inconsistent when weighing choices.
• Many consumer markets are monopolies or oligopolies.

CONTRACT VIEW OF THE FIRM'S DUTIES TO ITS CUSTOMERS:

The view that the relationship between a business firm and its customers is relationship, and the firm's moral duties to the customer are those created by this contractual relationships.

RELIABILITY:

The probability that a product will function as the consumer is led to expect that it will function.

SERVICE LIFE:

The period of time during which the product will function as effectively as the consumer is to led to expect it to function.

MAINTAINABILITY:

The ease with which the product can be repaired and kept in operating condition.

PRODUCT SAFETY:

The degree of risk associated with using a product.

MORAL DUTIES TO CONSUMERS UNDER CONTRACTUAL THEORY:

• Duty to comply with express and implied claims of reliability, service life, maintainability, and safety.
• Duty of disclosure
• Duty not to misrepresent
• Duty not to coerce

DUE CARE THEORY OF THE MANUFACTURER'S DUTIES TO CONSUMERS:

The view that because manufacturers are in more advantaged position, they have a duty to take special care to ensure that consumers' interests are not harmed by the products that they offer them.

CAVEAT EMPTOR:

Let the buyer take care.

CAVEAT VENDOR:

Let the seller take care.

AREAS OF PRODUCER RESPONSIBILITY ACCORDING TO DUE CARE THEORY:

• Design
• Production
• Information

SOCIAL COSTS VIEW OF THE MANUFACTURER'S DUTIES TO CONSUMERS:

The view that a manufacturer should pay the costs of any injuries sustained through any defects in the product, even when the manufacturer exercised all due care in the design and manufacture of the product and has taken all reasonable precautions to warn users of every foreseen danger.

• Manufacturer should pay the costs of all injuries caused by defect in a product even if exercised dure care.
• Argues that injuries are external costs that should be internalized.

STRICT LIABILITY:

A legal doctrine that holds that manufacturers must bear the costs of injuries resulting from product defects regardless of fault.

CRITICISMS OF THE SOCIAL COST VIEW:

• Unfair to manufacturers since it forces them to compensate unforseeable injuries.
• Assumption that adherance to the social cost view will prevent accidents is false.
• Leads to successful consumer lawsuits in cases where manufacturers took all due care.

COMMERCIAL ADVERTISING:

Communication between a seller and potential buyers that is publicly addressed to a mass audience and is intended to induce members of this audience to buy the seller's products.

• Public communication aimed at mass audience
• Intended to induce members of its audience to buy the sellers's products
• Succeeds by creating a desire for the seller's product or a belief that a product will satisfy a pre existing desire.

PRODUCTION COSTS:

The costs of the resources consumed in producing or improving a product.

SELLING COSTS:

The additional costs of resources that do not go into changing the product, but are invested instead in getting people to buy the product.

DECEPTIVE ADVERTISING:

• Is a function of the author's intent to make the audience believe what is known to be false.
• OR a function of The media's communication of the false message.
• OR a function of The audience's vulnerability to deception.

RIGHT TO PRIVACY:

The right of persons to determine what, to whom, and how much information about themselves will be disclosed to other parties.

PSYCHOLOGICAL PRIVACY:

Privacy with respect to a person's inner life.

PHYSICAL PRIVACY:

Privacy with respect to a person's physical activities.

IMPORTANCE OF PRIVACY:

• Protects individuals from interference, shame, embarassment, hurting loved ones, self-incrimination
• Enables the development of personal relationships,professional relationships, distinct social roles and self determination.

Consumer Decision Making Process & Relationship Marketing

The Consumer's decison to purchase or not to purchase a product or service is an important moment for most marketers. It can signify whether a marketing strategy has been successful or not. Therefore, marketing people are interested in the consumer's decision making process.

For a consumer to make a decision, more than one alternative must be available, including the alternative called making a decision to not buy or not buy now.

The various models of 

1. Consumers View
2. Passive View
3. Cognitive View
4. Emotional View

depict consumers and their decision making processes in distinctly different ways.

An overview consumer decision making model ties together the psychologist, social,and cultural concepts into easily understood network. This decision model has 3 sets of variables: input variables, process variables and output variables.

Input variables that affect the decision - making process include commercial marketing efforts, as well as non commercial influences from the customer's sociocultural environment. The decision process variables are influenced by the consumer's psychological field, including the evoked set or the brands in a particular product category considered in making a purchase choice.

The psychological field influences the consumer's recognition of a need, pre purchase search for information and evaluation of alternatives.

The output phase of the model includes the actual purchase (either trial or repeat purchase) and post purchase evaluation. Both pre purchase and post purchase evaluation feeds back inthe form of experience into the consumer's psychological field and serves to influence future decsion making process.

GIFTING:

The process of gift exchange is an important part of consumer behaviour. 

Various gift giving and gift receiving relationships are captured by the following 5 specific categoires in the gifting classification scheme:

1. Intergroup gifting: A group gives a gift to another group.
2. Intercategory gifting: An individual gives a gift to a group or a group gives a gift to an individual.
3. Intragroup gifting: A group gives a gift to itself or its members.
4. InterPersonal gifting: An individual gives a gift to another individual
5. Intrapersonal gifting: A Self Gift.

Consumer behaviour is not must making a purchase, it also includes the full range of experiences associated with using products or services. It includes the sense of pleasure and satisfaction derived from possessing or collecting "things". The outputs of consumption are the changes in feelings,moods, attitudes, reinforcement of lifestyles, an enhanced sense of self; satisfaction of a consumer related need; belonging to groups; and expressing and entertaining oneself.

Among other things, consuming includes the simple utility of using a supreior product, the stress reduction of a vacation, the sense of having a "sacred" possession, and the pleasures of a hobby or a collection. Some possessions serve to assist consumers intheir effort to create a personal meaning and to maintain a sense of the past.

Relationship Marketing impacts consumer's decisions and their consumption satisfaction. Firms establish loyalty programs to foster usage loyalty and a commitment to continued usage of their products and services.

At its har, relationship marketing is all about buildign trust between the firm and its customers and keeping promisesmade to the customers. Therefore the focus is always on developing long term bonds with customers by making them fee special and by providing them with personalized services.

How is your relationship marketing doing?

MANAGEMENT INNOVATIONS

managementinnovations2020@gmail.com; manojonkar@gmail.com, 919375970812 

MARKETING COMMUNICATION

MARKETING COMMUNICATION:

There are 5 basic components of communication:
1. Sender
2. Receiver
3. Medium
4. Message
5. Feedback

In the communications process, the sender encodes the message using words,pictures, symbols sends it through a selected medium.

The receiver decodes the message based on his or her personal characteristics and experience, and responds based on such factors as selective exposure, selctive perception, comprehension and psychological noise.

There are 2 types of communications:
1. Interpersonal Communications
2. Mass Communications

Interpersonal communications occur on a personal level between tow or more people and may be verbal or non verbal, formal or informal.
Interpersonal communications take place in person,by telephone,by mail,by email,on the web etc.,

In mass communications, there is no direct contact between socure and receiver.
Mass communications occur through such impersonal media as television, radio, newspapers and magazines.

Feedback is an essential component of all types of communications because it provides the sender with some notion as to whether and how well the message has been received.

The credibility of the source, a vital element in message persuasiveness, often is based on the source's percieved intentions.

Informal sources and neutral or editorial sources are considered to be highly objective and thus highly credible. The credibility of a commercial source is more complex and usually is based on a compostie evaluation of its reputation,expertise,and knowledge and that of the medium in which it advertises, the retail channel and company spokespersons.

Media Selection depends on the product,the audience, and the advertising objectives of the campaign.Each medium has advantages and shortcomings that must be weighed in the selection of media for an advertising campaign.

Following the emergence of new technologies, many advertisers are now developing more cusotmized communications that can reach consumers via media with narrowcasting, rather than broadcasting.

The manner in which a message is presented influences its impact. One sided messages are more effective in some situations and with some audiences; two sided messages are more effective with others.

High involvement products are best advertised through the central route to persuasion, which encourages active cognitive effort.

Marketers can either use objective,factual appeals or emotional appeals. The emotional appeals most frequently used in advertising fear, humour,sexual appeals etc.,

Audience participation is a very effective communications strategy becuase it encourages internalization of the advertising message.

What are the challenges you are facing in designing and delivering your Marketing Communications to your current and potential customers?

MANAGEMENT INNOVATIONS
managementinnovations2020@gmail.com; manojonkar@gmail.com; 919375970812