influences marketing Flashcards
what is consumer law
- consumer law is defined underneath the ACL in which the competiton and consumer act protects consumers (2010)
- The CCA prompts fair/competitve behaviour among businesses
- Penalties are imposed upon businesses which incooperate misleading advertising
- Managed by ASIC and ACCC
What is misleading and deceiving advertising
- business advertise in unethical ways.
Examples include
o misleading info about products abilities
o overstating benefits of product
o offering discounts that do not exist
o bait and switch advertising promotes a product that is heavily discounted, enticing pricing to attract customers.
When the advertised product was limited in stock in the first place and sells out quickly, the consumer’s interest is switched to a more profitable, higher priced, item. (manipulated)
what is price discrimination
The process of a business giving preference to some retail stores by providing them with stock at lower prices than is offered to the competitors of those retailers.
what are implied conditions
(unspoken and unwritten terms of a contract)
- Goods must be of acceptable quality: the product is fit for the purpose, free from defects, safe and durable.
- Merchantable quality: product is of standard a reasonable person would expect for the price
what are warranties
- By law, a business MUST either refund a client’s money/offer an exchange given the product was ‘faultily’ received.
- all products have an ‘implied right’ under Competition and Consumer Act 2010
what does it mean for a business to be ethical
broad principles that establish standards of guidelines
- Relies heavily on goodwill of stakeholders.
what makes up truth, accuracy and good taste in advertising
is it reviewed and controlled under the cca (2010) - failure to provide fair anf honest info whilst developing marketing campaigns is a breach
what r the 4 types of unhonest misleading behaviours under truth, accuracy
CPVP
concealed facts- info purposely omitted from ad (nothing mentionin fee)
puffery - exaggerated claims/untruths
vague statements : ambigous causing customers to assume the advertiser’s intended message
invasion of privacy - tracing web users and their activity to target them w ads, breaching consumer privacy
products that may damage health
- product certification from legal
federal/state gov restrict the provisions of various goods and services that may act as a health detriment to their consumer
- e.g. health warnings must be visible on cigarette packets and cannot be advertised or displayed in stores
engagin in fair comp
ACCC role to regulate business behaviour and reduce common practises of unfair competitve behaviour such as
-** predatory pricing** = using dominant position in market to lower prices and drive out comp
mergers- prohibited if its w the aim to lessen compettion and create a monopoly
anything anti competitive bc competition keeps markets alive
what r ur case studies for misleading and deceptive marketing as a whole
- the nurofen case
- samsung water proof phones
- mcdonalds
- Lorna Jane pants
- Heinz
whats the nurofen case
SMH- ACCC held that Nurofen should pay its highest ever imposed fine of $6 million on the basis that the estimated 5.9 million sales of the misleading products yielded a revenue of around $45 million
represented that its Nurofen Specific Pain products could each treat a specific type of pain, when the products were actually identical
mcdonalds case 4 misleading
⮚ In 2015, the SMH reported that McDonald’s breached NSW Food Labelling Laws as their animated menu boards made customers wait up to a minute to view the kilojoule board which would only appear for seven seconds
⮚ Consumer Protection Act forbids advertising to children under 13
-⮚ In 2013, a lawsuit was filed against McDonald’s - timing the release of new Happy Meal toys to coincide with popular film releases -directly targeting children by displaying its stores at ‘eye level’ for children.
Case was settled in 2020, with McDonald’s Canada agreeing to donate CAN$1,000,000 to four charities associated with hospitals and to make changes to its promotion of Happy Meals in Canada
heinz case study 2018
⮚ the Federal Court found Heinz had misled the public about the nutritional content of its Little Kids Shredz range, aimed at children aged one to three years. -⮚ Resulted in having to pay $2.25 million dollar fine
Juggernaut fitness brand Lorna Jane
- ordered to pay $5 million after falsely claiming a range of its activewear could protect the wearer from catching or spreading COVID
