fash210
consumer misconduct...
Some types of customer misconduct- such as shoplifting- are unethical and illegal Other customer behaviors have ethical implications that are more a matter of personal values and perspective Customer reactions to behaviors related to return policies Consumption of counterfeit goods Misuse of personal discounts Electronic file sharing
bait and switch advertising
illegal and unethical. a strategy that advertises a well known product at at very low price to bring customers into the store. this product is usually in short supply. customers arrive and find the product to be out of stock. store personnel then offer to sell similar product that is a better profit margin for the stroe.
controversial advertising
main focus on wat can be shown in ads, not easily regulated. want to avoid misleading or offending consumers
responsible advertising
aimed at reflecting society's view of what is morally right. there are several groups taht monitor ads before they are published Advertising Standards Authority ASA, the Ad Council. sometimes responsible ads that promote a good cause are very controversial.
double edged swords
boon to retailers and fashion houses, actions of endorser can reflect poorly on brand
regular price as promotional sale
common ad practice. retailer offers continuous promotional pricing, constant sale, consumers never actually pay regular price. this strategy becomes a matter of ethics when customers are lead to think they are getting better price than if they do not act on a current promotion.
customer behavior...
determines company policies. Businesses sometimes tend to be lenient Retailers response to ethical and unethical behavior affects companies reputations
how to watch out for fake sales
not every sale is a bargain and not every bargain is on sale. a few strategies have brought cases against retailers for claiming merchandise was on sale, when really it was always that same, lower price. hard to prove because consumer watchdogs cant monitor retail stores every day year round.
conditions in fine print
not illegal but is an ethical issue. a strategy in which the consumer is drawn to the store for an advertised low price only to find that the fine print eliminates many desired brand names from the promotion. common ro cosmetic and jewelry products.
case concerning "fine print"
2005: federated department stores was fined 725000 in civil penalties for several of their misleading promotion practices including: use of small print to exclude many items on a coupon that promised discounts on every item in the store. use of pictures of those excluded items on coupons. use of vague terms to describe excluded items. use of misleading sales signs in actual stores
company losses
33 Billion in 2002 $119 Billion in 2011 1.45% Total Sales Customer & Employee Theft Merchandise Returns & Damages
consumer sovereignty
Consumers make decisions based on cost and perceived quality; constrained on price Don't consider if companies are ethical or not Interest in environmental and social issues influences customer decisions Green products are more expensive
conscientious consumer
Consumers who value conscientiously produced products create higher level of demand for goods Anya Hindmarch canvas bags a substitute for plastic shopping bags Consumers and consumer activist groups work to enhance consumer knowledge about ethical behavior "Shop Athens First" to encourage shopping in local stores. Consumers have targeted products and manufacturing techniques for their ethical positions PETA
services acquisition fraud
Covertly violating norms or rules of service contracts or memberships
conflicted consumers
Customers want to pay lowest price, sellers want to be paid the highest Ethical consumers use Virtue approach in decision making Ethical consumption is associated with peoples general ethical behavior Public opinions effects consumer behavior
lycra swimwear 2007
Miami Swim Fashion Week Invista recruited 20 women of all shapes and sizes off the beach to model their bathing suits
fraud in the use of sales promotions
Misusing coupon and rebate offers, discount offers; Taking "unintended" advantage of promotional gift offers
is the consumer always right?
Much consumer misbehavior is tolerated But, retailers are becoming less tolerant of specific consumer misbehavior Kelly Tian and Bill Keep reported on consumer misconduct Identified seven types
Marc Jacobs
NYU School of Medicine's Interdisciplinary Melanoma Cooperative Group fundraiser Wanted to address the dangers of skin cancer after CEO Robert Duffy was diagnosed Designed $20 t-shirts featuring several celebrities posed in the nude advising people to "Protect the Skin You're In"
DSA: direct selling association
National trade association for leading firms that manufacture/distribute food and services sold directly to consumers. Example: Avon Products, Inc. DSA Code of Ethics Addresses both consumer and seller. Acts to ensure that consumers, as well as other salespeople, are not mislead. Enforced by independent administrator.
fraud with employee accomplices
Obtaining "free" or discounted goods from employees; Returning merchandise purchased by employee with discount for full price
Nordstrom privacy policy
Outlines what type of information is collected and how to change preferences Names company that protects customer's information Provides tips how to secure information over the internet
Conflicts for sales personnel
Primary conflict is to manage the goals of the organization with that of the customers' needs PSIs cause conflict for both the customer and the salespeople. Some salespeople view PSI's as being unethical and consider them bribes "Dishonesty to customers" was viewed as the "most serious corporate ethical violation" by employees, over "dishonesty to vendors/suppliers" Studies show that unethical behavior is positively related to salesperson success. Often times promotions are based on sales quotas Puts salespeople under extreme pressure to perform and meet goals
PSIs
Product-specific sales incentive (PSIs or spiffs)- incentives offered by manufacturers to salespeople to encourage them to promote certain products above those of competitors Within the fashion and retailing field they are most popular in the cosmetics industry Salesperson incentives may have a negative effect on the sales transaction
use of models
proliferation of ultra thin beauty ideal. rise in 1990 with Kate Moss, deaths in modeling industry led to new regulations
how are consumers influenced?
rationalize unethical behavior more than older consumers Consumers identifying with American culture are more accepting of unethical clothing consumption behaviors
many companies will drop celebrities if
they commit ethical violations, consumers would associate bad behavior with the brand EX: madonna pepsi, nike michael vick
social commentary advertising
using ads as a platform for ones beliefs. often highlight controversial issuesL kenneth cole frequently uses play on words to adress topics as gun control, AIDS, gay rights, abortion
shoplifting
The act of a customer removing merchandise from a store without paying for it
capitalizing on marketers pricing, collection and distribution errors
Failing to correct employees' billing or change-making mistakes; Accepting and using incorrectly delivered products without payment
database and info collection
About 75% of stores collect personal customer data at the point of purchase. Over 50% of retailers share that information Share with manufacturers, suppliers, etc. Retailers track the information and store the data in a computer database Easily accessible and can be stolen
warranty of merchandising
An implied warranty that guarantees a product will perform in the manner in which it is supposed to. Comments and promises that salespeople make to consumers are important. Automobile industry, electronics, fashion industry, etc.
warranty of fitness
An implied warranty that results through interactions with a salesperson who represents the fitness of a given product for a particular purpose. Salespeople are obligated to sell a product based on the fit of the product in relation to the need. Consumers rely on salesperson testimony; therefore, salespeople need to be equipped with accurate information.
responsible marketing
As a leading global consumer goods company, we promote the benefits of our products using many different channels of brand communication. Advertising can be a powerful force for behavior change. Advertising helps inform people about the benefits of our products and innovations. It is also a way for us to engage with consumers on issues that matter to them. For example, Dove's Campaign for Real Beauty challenges current stereotypes about beauty. Omo/Persil's 'Dirt is good' campaign promotes getting dirty as a natural and positive part of growing up for children - all part of their learning and development. At the same time, we recognize the influence of marketing and advertising on consumers and take our responsibilities seriously. This means ensuring that all claims we make have a sound scientific basis and that all such communication passes the baseline test of being 'legal, decent and honest'.
age of sales person and customer
Both older and younger customers perceived older retail sales associates to be more knowledgeable than younger ones. Also, older personnel showed more interest in helping, were more likely to provide clothing information, showed more respect for people as customers. Ethical issue of discrimination and stereotyping.
disposing of stored customer data
Company policy needs to be readily available Along with information about consumer rights and secure information policy Post policies on websites Companies can be hired to track and investigate consumer activity, but clearly state policies
fraud in dealing with marketers negotiators
Deceiving sales or insurance claims negotiators
what is really controversial
Depends on: Product Pictured Audience (Target & Overall) Medium Used (Print, TV, Online, Place) Timeliness Message/Copy Brand Image
Company policy and consumer rights
Discusses the various types of information that can be accessed, your rights as a consumer, and what the information is supposed to be used for.
CDFA guideline
Educate the industry to identify the early warning signs in an individual at risk of developing an eating disorder. * Encourage models who may have an eating disorder to seek professional help in order to continue modeling. And models who are receiving professional help for an eating disorder should not continue modeling without that professional's approval. Support the well-being of younger individuals by not hiring models under the age of sixteen for runway shows; not allowing models under the age of eighteen to work past midnight at fittings or shoots; checking IDs to ensure that models are the appropriate age; providing regular breaks and rest. Consult the applicable labor laws found at www.labor.state.ny.us when working with models under sixteen. Supply healthy meals, snacks, and water backstage and at shoots and provide nutrition and fitness education.
Code of ethics for selling
Establish knowledge of the DSA. Understand the purpose of a code of ethics for selling. Define warranty of fitness and warranty of merchandising.
girls against abercrombie & fitch
Girls against Abercrombie & Fitch Allegheny County Girls as Grantmakers found t-shirts offensive Urged students and friends not to buy shirts A&F has been subject to "girlcotts" in Illinois, Connecticut, & Pennsylvania A&F pulled "attitude tee's"
TJX companies
In 2007, TJX Companies reported hackers broke into their computer system Information collected was used to make fraudulent purchases around the world That August, TJX reported that the costs were at $256 million 10 times more than the estimate from 3 months prior
why do consumers engage in unethical behavior?
In Everybody Does It, Thomas Gabor describes the pervasive immorality of ordinary people People try to justify and distance themselves from their unethical behavior Once people behavior dishonestly, it is apt to happen again
ads banned in britain
In the Summer of 2011 several ads for L'Oreal makeup were banned from being published due to the 'unrealistic' nature of the photo Other ads for Lancôme were also banned for too much airbrushing. Other ads have been banned for explicit and overt sexiness.
why have a code of ethics for selling
Increase member's credibility. Protect customers. Also addresses: timely delivery, warranties/guarantees, terms of sales, and identification and privacy
loyalty card programs
Loyalty card programs Reward spending, but also benefit the company Encourage buying behavior - special client (VIP) Gives retailer access to certain information Names, zip codes, phone numbers, sometimes credit card numbers Protecting this information is problematic
relationship selling
Relationship Selling Continued Sales people today spend more time with customers building relationships Takes time Based on trust, honesty, and reliability Salesperson is better off being upfront about a product or service over telling a "white lie" Relationship will be broken Earn loyal customers if follow these tactics Database & Information Collection About 75% of stores collect personal customer data at the point of purchase. Over 50% of retailers share that information Share with manufacturers, suppliers, etc. Retailers track the information and store the data in a computer database Easily accessible and can be stolen
attitudes towards salespeople
Research shows that most customers expect some kind of unethical behavior from the stores. Customers have reported preferential treatment of certain customers by retailers. Many consumers are suspicious of the motives of salespeople.
employee responsibilities
Retail store employees need to be aware of the ethical aspects of customer behavior in an effort to represent the best interests of their employers
product return fraud
Returning store merchandise to retail stores or manufacturers under false pretenses
product acquisition fraud
Shoplifting; Covertly re-bundling packaged merchandise; Covertly manipulating "set" price information of merchandise
appearance of customer related to dress
Studies have shown that both customers and employees base initial opinions on dress. Salespeople should instead focus on identifying a customer's needs and catering each sales transaction to the individual customer.
how companies can learn secrets
Target's database collects information on all customers by assigning them a "Guest ID" This information can range to wear you live to what products you regularly buy. In 2002, Andrew Pole was hired to analyze women's purchases so that Target could pinpoint the moment a woman becomes pregnant Because Target is a "one-stop shop" they want to grab customers just as they are becoming busy with parenthood.
Dove real beauty
The Dove Real Beauty campaign Launched in 2004 Used the slogan "real women have curves" Some found offensive but overall was well received.
Limited Brands, Inc.
Use a database to monitor, and sometimes deny, customer returns Creates a "blacklist" of customers who have excessive amount of returns Ensure the protection of their company and lower the rate of fraudulent returns
zappos consumer data breach
Zappos' database was breached. The data base containing customer's credit card information was not breached but other important information was compromised Customers were urged to create new passwords for their Zappos accounts or any other accounts using the same passwords
the result of the case
while federated agreed to comply to the terms in reality they continued using their misleading advertisements. false promotions: lowest prices in the season, lowest prices of the year, one day only super sales, finally federated agreend that all their stores in new york would comply to the terms of the 725000 settlement.