Chapter 14: Consumer Relations

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Chapter 14 Consumer Relations
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A dose of reality for you

• The world has become one global society of
  consumers.
• Around 1.7 billion people worldwide now belong to
  the consumer class.
• Rising consumption has helped meeting basic needs
  and create jobs around the world.
• Nearly half of global consumers reside in
  developing countries.

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And its PR to the rescue

• Consumers have a tough time wading through the
  advertising clutter to identify winning products
  and services.
• In an era overwrought with advertising noise,
  PR solutions can help cut through it all to
• Distinguish one company from the next.
• Enhance the sale of a firms products.
• Attract, win, and keep customers.

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• So much advertising clutter so important to use
  PR to cut through it all.

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Consumer relations objectives

• Building sales is the primary objective.
• A satisfied customer may return. An unhappy
  customer may not.
• Typical consumer relations goals
• Keeping old customers
• Attracting new customers
• Marketing new items or services
• Expediting complaint handling
• Reducing costs

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Consumer-generated media

• The Internet has given consumers a forum and a
  publishing platform to voice collective
  opinions.
• Consumer-generated media (CGM) encompasses all
  opinions, comments, and experiences posted
  online.
• CGM is also known as consumer word-of-mouth.

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Consumer-generated-media

• CGM encompasses
• Blogs
• Message boards and forums
• Public discussions
• Online opinion/review sites and services
• Online feedback/complaint sites
• For any marketer trying to break through the
  clutter understanding and managing CGM is
  critical.

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Office of the Ombudsperson

• What do they do?
• Investigate complaints, monitor difficulties with
  products or quality.
• Why are they needed?
• To help the consumer feel confident and influence
  the organization to improve its product or
  service.
• The company that expresses understanding and
  courtesy to consumers will be the ones that keep
  business.

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A typical bedbug letter
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The consumer movement

• 1872First legislation to protect consumers
  against corporate abuses
• 1887Congress establishes the Interstate Commerce
  Commission
• 1927-1938Consumers protected from abuses in
  manufacturing, advertising, and retailing
• Early 1960sJohn F. Kennedy proposes the Consumer
  Bill of Rights

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Kennedys Consumer Bill of Rights

• This bill stated that consumers have the right
• to safety
• to be informed
• to choose
• to be heard

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A question for you

• What is your best dissatisfied customer story?
• How did the company attempt to resolve the
  situation?
• Do you believe their response was satisfactory?
  Why or why not?

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Federal consumer agencies

• The government attempts to protect consumers
  against abuse with more than 400 agencies. These
  include
• Justice Department
• Federal Trade Commission (FTC)
• Securities and Exchange Commission (SEC)
• Food and Drug Administration (FDA)
• Consumer Product Safety Commission
• Office of Consumer Affairs
• The best policy for any public company is to
  communicate regularly and frequently with
  regulators in Washington.

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Consumer activists on the Internet

• The Internet has spawned a new hotbed of consumer
  activism through e-mail campaigns, discussion
  groups, and forums.
• Their primary role is to keep companies honest by
  informing the public and evaluating products.
• Consumers Union, formed in l936, publishes
  Consumer Reports.
• Consumer Federation of America was formed in l968
  to unify lobbying efforts for pro-consumer
  legislation.

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An exercise for you

• Choose a category from the Internet site Yahoo!
  Boycott Board which lists actions being taken
  against organizations and report on it.
• Why was the boycott action taken?
• Do you believe the organization responded
  adequately?
• Why or why not?

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Big Tobacco
As discussed in the Chapter 14 case study
Tobacco Wars, cigarette manufacturers learned
hard lessons in the early years of the 21st
century.
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Another question for you.

• Who is considered the founding father of the
  consumer movement in the United States?
• Hint He has run for president several times,
  and in 1965 wrote the book, Unsafe at any
  Speed.
• Answer Ralph Nader

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Teaming up for the environment. The Dave Matthews
Band joined the founders of Ben Jerrys Ice
Cream to fight global warming through music and
ice cream sales.
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Summing it all up

• Without consumers, there would be no companies.
• The cause of consumerism will always remain
  strong.
• The smartest companies tie their products and
  services to larger societal causes.
• Thats why consumer relations is a core public
  relations challenge in the 21st century.