P2-The limitations and constraints of marketing
I am going to describe the limitations and constraints of marketing for the two organisations I chose in the previous assignment. It is important for all businesses to make sure that when marketing they are within the constraints of the law.
Legal constraints:
Sales of goods act 1979- as traders it is permitted that Nike and Krispy Kremes sell goods that are as they are described and of good quality, this could affect marketing as it means that any marketing should describe the product accurately and be able to establish any claims for example if Nike made shoes that they claimed could fly you to the moon then them shoes would have to fly you to the moon. The product has to do what it says on the advert
Consumer protection from unfair trading regulations 2008- this act was put in place so that the customers of both Nike and krispy kremes can be treated fairly it is important for both businesses to be honest with their customers at all times although they are this act was put in place for businesses that do the opposite an that use, aggressive sale tactics, or but up dishonest promotions like closing down sales when the store isn’t really closing down this is bad as it is false advertising and not being 100% honest to their customers just so that the business can make a profit
Consumer credit acts 1974 and 2006- this act doesn’t apply to either of my chosen organisations, but applies to businesses offering goods or services on credit, businesses that buy Nike or Krispy Kreme products in bulk like lilywhites, sports world and Tesco or companies who lend money to consumers these types of businesses need to be licensed by the office of fair trading and any complaints between the customer about the business or business about the customer is dealt with by the financial ombudsman service, the consumer credit act requires businesses that provide credit or loans to give customers regular updates on their account and when a customers falls behind on repayments the FOS may extend the period of time for the customer to re-pay the debt this can help prevent the business from calling bailiffs or using threatening tactics when a customer struggles with repayments this could effect the company because they will be known as bullies even though customers need to pay of the credit or the loan they can prevent friends and family from using their services. It is important the company’s who stock up and buy products in bulk have permission otherwise this would be seen as illegal trading
Consumer protection (distance selling) regulations 2000- distant selling is any source of selling apart from face to face contact between customer and the business for example through a website or mail order catalogue. Both Nike and krispy kremes provide their customers with distant selling you can buy products from their website and have it delivered to your door distant selling can affect a business because people might not want to buy online as they feel scared to fall victim to fraud this could result in poor sales online. As my two organisations provide distant selling they must give their consumers information about:
Business
Goods or services they are selling
Payment arrangements
Delivery arrangements
Consumer rights to cancel their orders
Data protection act 1998- this acts requires krispy kremes and Nike to protect their customers from unfair use of their personal information as they keep a database of customer information when their marketing department sends out direct emails. Both organisations have to make sure that the information from the database must be:
Obtained fairly and lawfully
Used only for the purpose stated during collection
Adequate, relevant and not excessive in relation to the intended use
Accurate and where necessary kept up to date
Not kept for longer than necessary
Processed in line with your rights
Subject to procedures to prevent unlawful processing, accidental loss, destruction and damage to personal data
Protected from transfer to an area outside the EEA unless adequate protection exists for that data in the area
It is important for both organisations to register customers details when they purchase a product online, and to give them the option to opt in and receive information about future offers, this requirement is legal and it would be illegal for any organisation including the two I have chosen to send customers information that they have not requested
Voluntary constraints:
Marketing activities are also watched carefully by the advertising standards authority aka ASA, which is an industry body rather than a legal framework, which promotes and maintains the British code of advertising, sales promotion and direct marketing, these are a set of rules and standards businesses like Nike and Krispy Kremes should follow. When marketing this allows them to:
Keep within the legal frame work
Protect customers from misleading claims
Create an even footing for advertisers
The principles of the code permit the organisations advertising to be legal, decent, honest and truthful. It also requires krispy kremes and Nike as a business to prepare advertisements with a sense of responsibility and should not produce adverts that are misleading or offensive as this is misleading to the customer and if an advert causes offense e.g. being racist in advertisements having swear words etc this could cost the company millions of pounds due to changing the advert and losing profit, if either business goes against the code of practice the ASA are able to:
Insist that it approves any advertising before it is published or broadcasted
Refer the advertiser to the office of fair trading
Ask TV stations, radio stations and publishers to withdraw the advertising from their broadcasts and publications
Pressure groups:
Pressure groups= an organised group which work to influence the behaviour or beliefs of a government or business they will try and raise awareness of their cause in the media and to the public in order to pressurise the business to change. This can result in the business to gain negative publicity and can damage their reputation.
Pressure groups that target krispy kremes:
Earth first- they campaign against the destruction of the environment. They could target krispy kremes as they could destroy the environment to place their stores.
Food commission- an independent food watchdog campaigning for safer, healthier food in the . They could see krispy kremes un-healthy and could cause problems for people.
Pressure groups that target Nike:
Anti-globalization movement-a small college campaign that is against the conditions that Nike products are made.
United students against sweatshops- another small college/university campaign that is against the way the Nike products are made.
Liberty- campaigns to defend and extend human rights and civil liberties, it is no secret that Nike once used child laborers to produce their products and pay them a tiny amount of wages.
Earth first -they campaign against the destruction of the environment. They could target Nike as they could destroy the environment to place their stores.
Consumerism:
Is a social movement which gives consumers some powers over business It gives consumers rights to:
Be safe
Choose
Be informed
Be heard
TV programmes like watchdog and consumer right programmes like which? Help consumerism by forcing businesses take account their practices and products, the office of fair trading also play a part in consumerism by enforcing consumer legislation and taking care of unfair traders. E.g. if Nike say their trainers can make you fly then the product should actually make you fly otherwise consumers will not be happy and make complaints
Acceptable language:
When advertising the two businesses need to make sure they avoid offending consumers, acceptable language can be subjective and everyone’s reactions to the same text can change depending on the images that are provided with it and the context in which it is used. The ASA has identified areas where people find the use of language unacceptable, these are:
Referring to sex
Usage of strong language or swear words
Mocking peoples religion or beliefs
Show people in a demanding way and offend on the grounds of gender, race, religion, sexuality, age or disability
It is important for the businesses to chose the appropriate language when advertising.
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