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Chapter 25 - The law of marketing. At the end of this chapter you should understand: the term ‘marketing’ and ‘the marketing function’; why the marketing process requires legal regulation; the term ‘lottery’ and the main provisions of the state and territory lotteries, gaming and betting Acts;…
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Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev 2-1 The law of marketing Chapter 25 Copyright â 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-2 Learning objectives At the end of this chapter you should understand: • the term ‘marketing’ and ‘the marketing function’ • why the marketing process requires legal regulation • the term ‘lottery’ and the main provisions of the state and territory lotteries, gaming and betting Acts • the legal requirements for the control of raffles • the legal requirements that affect market games and competitions • the term ‘game of chance’ and their legal requirements • the legal requirements for obtaining permission to conduct games and competitions Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-3 Learning objectives (cont.) • the term ‘gift promotion’ and their legislative requirements • regulations imposed by the law in relation to marketers providing customers with gifts and samples • the operation of the Do Not Call Register • the legislation regulating the packaging and labelling of goods and services Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-4 Introduction Marketing: The process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organisational goals Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-5 The marketing function ‘To identify the wants or needs of consumers, and to determine how best to satisfy these using the marketing mix.’ Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-6 The marketing mix (four Ps) Product Price Promotion Place (distribution) These four factors are largely controllable Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-7 External forces on the marketing mix • Economic environment • Cultural/social environment • Political environment (e.g the GST) • Competitive environment • Legal environment These factors are largely uncontrollable Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-8 The role of law To define acceptable vs unacceptable behaviour Marketing law includes any regulations that attempt to ‘draw the line’ between acceptable competitive business conduct and unacceptable business practices Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-9 Marketing laws Designed to protect: • Consumers • Traders • The competitive system that underpins the ‘free market’ Australian economy Consider the application of the Competition and Consumer Act 2010 and the Australian Consumer Law Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-10 Product laws Intellectual property: – Patents for new inventions – Registering a trade mark – Registering a design – Copyright Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-11 Product laws (cont.) Packaging and labelling: Designed to standardise information and protect against misleading or deceptive information, e.g – Weight – Content of goods – Food ingredients Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-12 Product laws (cont.) Product liability: Minimum acceptable product safety and quality standards, such as: – Food hygiene regulations – Manufacturer liability for defective or negligent products Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-13 Price laws Protect against practices such as: • Price fixing • Price discrimination: – Different prices to different customers • Predatory pricing: – Selling below cost for an extended period • Resale price maintenance: – Recommended Retail Price Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-14 Promotion laws Protect against misleading, deceptive or 'high pressure' promotional activities, e.g – Market games – Bait advertising – Pyramid selling schemes – Door-to-door sales ‘cooling-off' period Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-15 Place laws Prevent suppliers from imposing unreasonable restraints on distributors, e.g – Exclusive dealing—restricting products that a distributor may sell – Territorial restraints—restricting the area in which a distributor may operate – Customer restraints—restricting the customers with which a distributor may deal Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-16 Market games and competitions • Lottery—a scheme for distributing prizes by lot of chance, in which: – there must be a scheme – there must be a game of chance – consideration must be provided by entrants • Legal if lottery designed to promote trade or business Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-17 Trading stamp promotions Operates by customers saving trading stamps or coupons obtained when purchasing goods from a trader On reaching a certain number of stamps, the customer can receive a free gift Types: – Trading stamp companies – Private trading stamp schemes Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-18 Offering prizes and gifts • A common marketing practice is to provide gifts with the purchase of certain goods • This practice is quite legal Problems arise where the retailer fails to provide the prize as promoted • The Australian Consumer Law prohibits a trader from offering gifts and prizes with the intention of not providing them Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-19 Other practices • Door-to-door sales • Bait advertising • Referral selling Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-20 Price surveillance The ACCC: • undertakes price surveillance • holds inquiries into the supply of specified goods or services • monitors the prices, cost and profits of any industry or business Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-21 Product packaging and labelling • Common law protection • Statutory protection: – Australian Consumer Law Misleading and deceptive conduct Unfair trade practices Product safety and information standards – Trade measurement legislation: National Measurements Act 1960 (Cwlth) Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-22 Poisonous and dangerous goods • Specific legislation in each state and territory that regulates the production and sale of poisonous and dangerous goods • Poisons legislation • State poisons codes • National drugs and poisons schedule committee Dangerous goods Copyright â 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-23 Drugs and Therapeutic Goods Therapeutic Goods Act 1989 (Cwlth) • Legislation to ensure the safety and efficacy of therapeutic goods available in Australia • Functions: – Evaluate new therapeutic goods – Develop test methods – Conduct testing programs – Liaise with industry Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-24 Food Safety • Laws prohibiting: – the sale of food that is unfit for human consumption – misleading and deceptive advertising • Australian and New Zealand Food Authority (ANZFA): – Establishment of Food Standards Code – Assessment of safety of genetically modified food products Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev •2-25 ...The law of marketing Chapter 25 Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev • 2-2 Learning objectives At the end of this... schemes – Door-to-door sales ‘cooling-off' period Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev • 2-1 5 Place laws Prevent... competitive business conduct and unacceptable business practices Copyright © 2014 McGraw-Hill Education (Australia) Pty Ltd PPTs to accompany Barron, Fundamentals of Business Law 7Rev • 2-9 Marketing laws