CHAPTER 20 CHAPTER 20 PUBLIC POLICY ISSUES PUBLIC POLICY ISSUES McGraw-Hill/Irwin Copyright ©2006 The McGraw-Hill Companies, Inc. All right reserved. Life Cycle of a Public Concern Life Cycle of a Public Concern  Stirring  Trial Support  Political Arena  Regulatory Adjustment Figure 20.1 Product Liability: Typology of Injury Product Liability: Typology of Injury Sources Sources  Inherent Risk in Product  Design Defects  Dangerous Condition  No Safety Device  Inadequate Materials  Defects in Manufacture  Inadequate Instructions or Warnings  Dangers After Use Four Legal Bases for Product Liability Four Legal Bases for Product Liability  Negligence  Manufacturer let the product be injurious  Warranty  A promise  Express warranty: a statement of fact about a product  Implied warranty: arises when product is made available for a given use Four Legal Bases for Product Liability Four Legal Bases for Product Liability (continued) (continued)  Strict Liability  Seller is responsible for not putting a defective product on the market  Defenses: assumption of risk; unforeseeable misuse; not defective  Misrepresentation  Implied use of product, even if not defective Other Legislation Consumer Product Safety Act/Safety Commission Which Are the Real Product Warning Which Are the Real Product Warning Labels? Labels? 1. On a disposable razor: “Do not use this product during an earthquake.” 2. On a rock garden: “Eating rocks may lead to broken teeth.” 3. On a roll of Life Savers: “Not for use as a flotation device.” 4. On a hair dryer: “Do not use while sleeping.” 5. On a piano: “Harmful or fatal if swallowed.” 6. On a cardboard windshield sun shade: “Warning: Do not drive with sun shield in place.” 7. On shin guards: “Shin guards cannot protect any part of the body they do not cover.” 8. On syrup of ipecac: “Caution: may induce vomiting.” 9. On an iron: “Do not iron clothes while being worn.” 10. On a plastic sled: “Not to be eaten or burned.” 11. On work gloves: “For best results, do not leave at crime scene.” 12. On a jet ski: “Riders may suffer injury due to forceful entry of water into body cavities while falling off this craft.” 13. On a carpenter’s router: “This product not intended for use as a dentist’s drill.” 14. On a blender: “Not for use as an aquarium.” 15. On a stroller: "Always remove child from stroller before folding." Figure 20.4 Which Are the Real Product Warning Which Are the Real Product Warning Labels? Labels? 1. NO 2. On a rock garden: “Eating rocks may lead to broken teeth.” 3. NO 4. On a hair dryer: “Do not use while sleeping.” 5. NO 6. On a cardboard windshield sun shade: “Warning: Do not drive with sun shield in place.” 7. On shin guards: “Shin guards cannot protect any part of the body they do not cover.” 8. NO 9. On an iron: “Do not iron clothes while being worn.” 10. On a plastic sled: “Not to be eaten or burned.” 11. NO 12. On a jet ski: “Riders may suffer injury due to forceful entry of water into body cavities while falling off this craft.” 13. On a carpenter’s router: “This product not intended for use as a dentist’s drill.” 14. NO 15. On a stroller: "Always remove child from stroller before folding.“ Figure 20.4 Preparing For the Product Recall Preparing For the Product Recall  Prior to the Recall  Designate the recall program coordinator (spokesperson)  Develop channels for communicating with customers directly  During the Recall  Assess safety risk and take corrective action  Inform customers as well as intermediaries of the risks  After the Recall  Strive to restore company reputation  Monitor recall effectiveness Public Policy Problems and the New Public Policy Problems and the New Products Process Products Process Figure 20.6 Other Areas of Public Policy Debate Other Areas of Public Policy Debate  Environmental Needs  Product Piracy  Worthy Products  Morality  Monopoly  Personal Ethics (what would you do?) [...]... parents: there are several far better games on the market Your brewing company markets a new beer containing legal (sterilized) hemp seeds, mostly as a gimmick Nevertheless, your advertising contains obvious drug imagery What Can the New Product Manager Do?  Include in Strategy and Policy        Consider public policy implications in PIC Control Systems Product Testing Marketing Prepares Warnings/Labels... Jedlik, “The Nightmare of International Product Piracy,” Industrial Marketing Management 30, 200 1, pp 499-509 Worthy Products    Coffee manufacturers agreed to produce some brands containing no beans from El Salvador Manufacturers have been asked to produce special exercise equipment for the handicapped or modified products for the elderly Orphan drugs supported by the federal government; otherwise would...Environmental Needs  A new product is said to hurt the environment if:      Its raw materials are scarce or hard to get to Its design or manufacture causes pollution or excess power usage Its use causes pollution Its disposal cannot be handled by recycling Some companies test market their products in Germany and Scandinavia, because of the strict greenness... marketing a new seminar service to train bank personnel in investment counseling, but you don’t know they will really learn how to counsel You are working on an item to be sold to virtually every K-12 school You calculate gross margin at about 80% The price could be cut in half and your company margin would still be 60% Your database service collects patient records from physicians and offers a new service... copyrights or patented brands (the “ $20 Rolex”) Near Brand Usage: slightly different brand names (“Tonny Hilfiger” clothes) Intellectual Property Copying: Unauthorized copying of CDs and DVDs, for example Protection Against Product Piracy        Communication Legal recourse Government Direct contact Labeling Strong proactive marketing Piracy as Promotion Figure 20. 7 Source: Laurence Jacobs, A Coksun . effectiveness Public Policy Problems and the New Public Policy Problems and the New Products Process Products Process Figure 20. 6 Other Areas of Public Policy Debate Other Areas of Public Policy Debate  Environmental. CHAPTER 20 CHAPTER 20 PUBLIC POLICY ISSUES PUBLIC POLICY ISSUES McGraw-Hill/Irwin Copyright 200 6 The McGraw-Hill Companies, Inc. All right reserved. Life Cycle of a Public Concern Life. Promotion Figure 20. 7 Source: Laurence Jacobs, A. Coksun Samli, and Tom Jedlik, “The Nightmare of International Product Piracy,” Industrial Marketing Management 30, 200 1, pp. 499-509. Worthy Products Worthy