Chapter 14Chapter 14Consumer Consumer

Stakeholders: Stakeholders: Product and Product and

Service IssuesService Issues

© 2012 South-Western, a part of Cengage Learning 1

Two Central Issues

Quality•Product quality means different things to different people.

•Service quality usually means that the service was performed as expected and on time.

•Interest is driven by an increase in family income and intense global competition.

Safety•Nearly all consumer products or services entail some small degree of risk.

•Interest about safety is driven by the public’s concern with safety and risk-free products– and business’ responsibility to address this concern.

© 2012 South-Western, a part of Cengage Learning2

The Issue of Safety

• How safe should a product be made?

Historical Perspective

• 1800s caveat emptor:

• “Let the buyer beware.”

• 1900s caveat emptor:

• “Let the seller take care.”

3© 2012 South-Western, a part of Cengage Learning

Top Ten List of Safety Principles

1. Build safety into product design.2. Do product safety testing for all foreseeable

hazards.3. Keep informed about and implement latest

developments in product safety.4. Educate consumers about product safety.5. Track and address products’ safety performance.6. Fully investigate product safety incidents.7. Report product safety defects promptly.8. If a defect occurs, promptly offer a

comprehensive recall plan.9. Work with the CPSC to make sure your recall is

effective.10. Learn from mistakes—yours and others’.

4© 2012 South-Western, a part of Cengage Learning

Consumer Product Injuries

1. Sports and recreational activities and equipment

2. Home structures and construction materials

3. Home furnishings and fixtures

4. Housewares

5. Personal use items

6. Home workshop apparatus, tools, and attachments

7. Packaging and containers for household products

8. Home and family maintenance products

9. Toys

10. Space heating, cooling, and ventilation equipment

5© 2012 South-Western, a part of Cengage Learning

Product Liability

Reasons for the concern•The sheer number of cases where products resulted in injury, illness, or death and the amount of the financial award.

•We have become an increasingly litigious society.

•Rise in the doctrine of strict liability.• Anyone in the value chain of a product is

liable for harm caused to the user if the product is unreasonably dangerous because of a defective condition.

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What does the FDA Do?

The FDA is responsible for•Assuring the safety, effectiveness, and security of human and veterinary drugs, vaccines and other biological products, medical devices, the U.S. food supply, cosmetics, dietary supplements, and products that give off radiation.

•Regulating tobacco products.

•Advancing the public health by helping to speed product innovations.

•Helping the public get the accurate, science-based information they need to use medicines and foods to improve their health.

7© 2012 South-Western, a part of Cengage Learning

Seven Principles of Customer Service

1. Keeping your word is where it begins.

2. Always be honest and tell it like it is.

3. Always think proactively.

4. Deal with problems as best you can yourself, never passing the buck.

5. Do not argue with a customer because it is a lose/lose situation.

6. Accept your mistakes, learn from them, and do not repeat them.

7. Consistency is the name of the game for lasting success.

8© 2012 South-Western, a part of Cengage Learning

Total Quality Management (continued)

TQM emphasizes eight key elements

1. Ethics

2. Integrity

3. Trust

4. Training

5. Teamwork

6. Leadership

7. Recognition

8. Communication

9© 2012 South-Western, a part of Cengage Learning

The foundation upon which all else is built