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P2 - Describe the limitations and constraints of marketing
Transcript of P2 - Describe the limitations and constraints of marketing
By Jasmine Carratt
Limitations and Constraints
Limitations and constraints are factors that work as a resource that is currently working at its full capacity.
Limitations and constraints restrict an organization from achieving its potential. Examples of limitations and constraints are:
Sale of Goods Act 1979
Trade description Acts
Consumer credit Acts 1974 & 2006
Consumer Protection from unfair Trading Regulations 2008
Code of Advertising Practice
Pressure groups and consumerism for example CBI
Sales of goods act 1979
The Sale of Goods Act 1979 is an Act of the Parliament of the United Kingdom which regulates English contract law and UK commercial law in respect of goods that are sold and bought.
The sale of goods act 1979 is a law that protects consumers and ensures goods are as described, and also of satisfactory quality and fit for purpose.
This law means any products sold must be fit for purpose, for example, Tesco breached the sales of goods act when they sold meat that was labelled as Beef, however, it was horsemeat, this means that it was not as described, of satisfactory quality or fit for purpose.
Trade description act:
The Trade Descriptions Act 1968 is an Act of the Parliament of the United Kingdom which prevents manufacturers, retailers or service industry providers from misleading consumers as to what they are spending their money on. This law empowers the judiciary to punish companies or individuals who make false claims about the products or services that they sell. http://en.wikipedia.org/wiki/Trade_Descriptions_Act_1968
The trade descriptions act means organizations selling products must ensure the definition of the goods they are selling are truthful and describe the product accurately, as any other information they give may be misleading.
For example, Tesco was offering a discount on washing powder which was advertised on posters displayed in stores. Once they had ran out of the lower priced product the stores began to replace it with the regularly priced stock. The manager failed to take the signs down and a customer was charged at the higher price, this is how Tesco breached the trade description act.
The Consumer Credit Act regulates credit card purchases but also gives you protection when you enter into a loan or hire agreement.
The Consumer Credit Act 1974 is a legislation that regulates consumer credit and consumer hire agreements, this act ensures that these agreements made include personal loans, hire-purchase agreements, store cards and credit cards.
For example, Linda Marriott and her husband had bought a £22,400 kitchen, and following this they paid £200 as a deposit on a credit card to ensure extra protection. When the firm went bust, they asked the card firm for all the cash back from their credit card
Consumer Credit Acts 1974 & 2006:
From special offers that don't exist to closing down sales that run for months and months, some companies use underhand tactics to get a sale. The Consumer Protection from Unfair Trading Regulations provide consumer protection from unfair or misleading trading practices, misleading omissions and aggressive sales tactics.
The consumer protection from unfair trading regulations have introduced a general rule for companies not to trade unfairly and they seek to ensure that traders are acting honestly and fairly towards their customers.
Consumer protection from unfair trading ensures that companies do not lie to customers and ensures that they act honestly towards all of there customers, for example, a company could lie to a customer about having a closing down sale which would then encourage customers to shop with them quickly, however, if this is not true they are breaking the customer protection from unfair trading regulations 2008.
Consumer Protection from unfair Trading Regulations 2008:
Consumer protection laws are a form of government regulation, which aim to protect the rights of consumers. For example, a government may require businesses to disclose detailed information about products—particularly in areas where safety or public health is an issue, such as food.
When a consumer purchases a product, they are entitled to receive goods that are
fit for purpose
of satisfactory quality
Consumer protection is to ensure all consumers are happy with what they have purchased, and they have the right to receive products that are as described, fit for purpose and also of a satisfactory quality, for example, Tesco was fined £300,000 for advertising misleading half-price offers on the strawberries they were selling.
Tesco was ordered to pay the fine after admitting to misleading customers in 2011 by advertising half-price British strawberries for a longer period than when they were sold at a higher amount.
The Data Protection Act 1998 (DPA) is an Act of Parliament of the United Kingdom of Great Britain and Northern Ireland which defines UK law on the processing of data on identifiable living people. It is the main piece of legislation that governs the protection of personal data in the UK. http://en.wikipedia.org/wiki/Data_Protection_Act_1998
The Data Protection Act is a law that was put into place to protect personal data stored on computer, for example, if an organisation has information about a client or customer, the data protection act ensures that the information isn’t given to those who weren't consented to have the information by the customer.
Data Protection Act 1998
As of 13th June 2014 the distance selling regulations no longer apply within the UK, the Distance Selling Regulations were the rules put in place to protect the consumer when they are purchasing goods from a distance, for example, online or over the phone.
Distance selling Regulations 2000
The ASA is not a part of the legal framework
however, it is an industry body, and the ASA promotes and maintains the code of advertising, sales of marketing, and also direct marketing.
These are rules that organizations must follow when marketing:
Keep within the legal framework
Protect customers from misleading claims
Create an even footing for advertisers
It is important when advertising that all organizations ensure they are being legal, decent, honest, and also truthful, and all organizations should ensure they are always keep the consumer and the society's best interests when they are advertising a product.
Things such as withdrawing the advertisement from TV stations and radio stations can happen when the advertiser breaches any of the code of practice.
for example, a morrisons TV advert showing a child removing all the salad items from her burger was banned as it was seen to condon unhealthy eating but the advert was axed.
Voluntary codes of advertising practice:
Pressure groups are organizations that are initially put together to attempt to influence what members of the public think about the business and its environment.
Pressure groups are organizations which campaign for changes in the law, pressure groups are often known for having a strong influence on public opinion and who they choose to vote for.
A pressure group are able to challenge and also change the behavior of a business by doing things such as:
writing letters to MPs
contacting the press
Consumerism is a social movement that enables consumers to have some degree of power over businesses.
Consumerism leads many organisations taking action to improve the service they give to the customers, they have done this due to the growth of consumerism.
Pressure groups and consumerism
Acceptable language has an impact on many organizations, for example, if an organization were to advertise a product they sell on TV, they would have to ensure they use acceptable language to make sure they don’t offend any potential customers.
The advertising standards authority have previously identified members of the public main concerns in regards to unacceptable language, these include:
Refer to sex
Use strong language and swear words
Mocking religions and peoples beliefs
Offending people on the grounds of gender, race, religion, sexuality, age, or disability
Acceptable language is used to ensure that when advertising, nobody should be offended, for example, when an advert appears on TV, it cannot include references to religion or sexuality, as this my offend some people.
Customers have a number of legal rights. One of these is the right to cancel any order you have made over the internet and to receive a full refund. These rights are known as the Distance Selling Regulations.
Under the Distance Selling Regulations, you are entitled to a cooling off period of 7 working days from when you receive the product in which you can return the product.