For this task I will be talking about the how different legal policies can cause problems for different companies and make them have to do things in different ways as to what they would have originally liked to. Legal
The first limitation and constraint that I will be talking about will be the legal ones. This would be acts such as the sale and supply of good act. What this means is that when a company is advertising a products to the public then it must be advertised properly as to how the products actually is. This means that they would not be able to falsely advertise the product to try and increase the amount of sales that they could get from the product as this would be illegal. And the company could face being fined and having to withdraw the advertising for the product and do it all again this could cost the company thousands. In order for the company to stick to the sales of goods act then when they are advertising. The goods that they purchase must be describe as they are this would cover any televised advertisement or vocal advertisement. An example of this would be Kelloggs special k cereal they would not be able to advertise this as weight loss cereal. They would have to say that it can be used to aid weight loss as part of a calories controlled diet.
As If they just said that the cereal would make them loss weight and they didn’t then they would be entitled to sue the company for false advertising. Even though they may not have changed their lifestyle and could still be eating excessive amounts of junk food. Another factor that would have to be told correctly would be that the good must be of a satisfactory quality this would be for any minor/major fault however if the customer has been informed about the problem prior to purchasing then they have got no rights. An example of this would be eBay. As many people purchase things off eBay that are second hand and have got signs of wear and tear on them.
However if they were to not be told about this and they believed that they were purchasing a products that had no damage and was as good as new then they would have a right to refund as well as compensation to cover any costs it may take to get you a new one. The last part of sales of goods act would be that the product is fit for its intended purpose. This would also include any promised that a salesperson told the buyer at the time of purchase. An example of this would be that if you were to purchase a car. Then it must be drivable. However if the salesmen told you that the car had anti-lock brakes and yet when you applied the brakes you stared to skid. Then you would be able to sue the company in which you purchased the car from as they have falsely advertised the product by telling the buyer that it is fitted with anti-lock brakes.
Consumer Protection from Unfair trading regulations
This is an act which says that products must be to a standard which would meet the required criteria. Under the consumer protection act it would also enable the customers to be able to get a refund on if what they purchase if not fit for purpose. Under this act companies are not allowed to use aggressive sale tactics to try and get a sale. They are also not allowed to advertise promotional offers which are dishonest. An example of this would be if a store was to advertise that they were to be having a closing down sale but had no intention of closing then this would be breaching the consumer protection With this consumer protection act is will protect the members of the public against: Unsafe goods prohibiting misleading price indications
There is also a consumer protection which cover distance sales this would be a sale were there is not actual face to face confrontation between the customer and the seller. For example sales that happen from ASOS. For these sales the business has they would have to provide the customer with clear and exact information about the information that they have. The information that they must provide is: goods or service they are offering payment arrangements delivery arrangements
Customer’s right to cancel any order they could have placed. This would means that the supplier would have to do things the proper way for example if ASDA were to be selling a television and it was to be advertised as £400 pound in the store then when they take it to the till they would not be able to charge them £480 as VAT. They would either have to show on the price that the VAT is not included so that the customer would know that the price should be expected to change. Or they would have to include is directly into the price so that it meets the consumer protection criteria. They would also have to ensure that the products are exactly as they have been describe and if not then they would have to take action and make it so that the product is as advertised. An example of this would be Tesco with the horse meat scandal. When this happed they would have had to recall all of the products which contain horse meat as they would not have been advertised as horse meat being in them. Data protection Act
This act is used to protect customers from having their personal details used unfairly. This act would have an effect on the way in which business handle information that they have about their customers. The information that they do have must have been obtained in a lawful way. The information that they have got must also be relevant and used only for its intended purpose. The information that they have got has got to be kept up to date and must not be shared with anybody no matter what the situation is. This protection act would protect the consumer from any dodgy dealers that they may encourage. For example cow boy builders these are builders who go around and get the money for the building job but do not finish the job. The way in which they would avoid breaking this act would be by making sure that when they are producing the products that they are using the correct quality of materials so that they meet the standard needed this way they would not have to recall or pay for the repairmen of products which are not up to the standard that they should be. Voluntary: Advertising standards authority
This legislation effects what the company can and cannot say when they are advertising there products. The marketing activity will be monitored this would be done by the independent advertising standards authority (ASA). This is an industry that helps to maintain the British code of advertising. The types of advertising that they deal with comes from all form such as newspapers, radio/TV and on the internet. They ensure that they keep within the legal obligations as well as making sure that the advertisement does not mislead a customer in any way. If a company is found as to be breaching this act then they would be told that they must withdraw all of the products that they have which include the false advertisement and change it so that the product meets the necessary requirements.
An Example of advertiser who has falsely advertised is Red Bull they have advertised there drink with the slogan red bull gives you wings. As this is not true then this is a breach of the ASA. This would provide costly for the company. As a result of this they would have to recall all of the products which contain this slogan and have it changed so that it meets regulations. Due to this the company have had to pay out compensation to its customers due to these false claims. For anybody that has purchased a can of red bull from 2002 is entitled to $10 compensation. This could end up cost the company a figure which is round about £13 million Organisational
Inside the organisation there are multiple different areas such as production, finance, sales. These would all clash as they have got different interests and want the best for their individual section. They would all want to have the biggest budget so that they are able to develop their own area. For example marketing in a business would want to have the largest budget as this is a very costly part of development. Especially when it comes to make adverts and trying to produce other promotional techniques. This could then cause a conflict with the financial part of the organisation as they may not want to allocate such a large sum of money to the marketing as it needs to be spread equally among the other departments within the organisation.
There could also be conflict between the production team and the finances as the production team would want to have a large budget so that they can spend large sums of money on producing the products and into researching what the best materials are and what they can do to save the money in this. They would like to have the big budget as it would make producing them simple as they would not have to worry about having to budget so that can afford all product part they could just buy them. But the finances team may still have the same problem as before and not want to give out such a large sum of money. Ethical
This would be were a company is using places such as sweatshops to have their products produced. The reason as to why companies use these sorts of places is a they are a good quality of work for an extremely cheap price. Although these sweat shops are not illegal some people see them as extremely bad places and that they are ethically wrong. An example of a company who do things which could be seen as an ethical issue is Nike. They have there products produced in sweatshops were the working conditions are poor and pay is pitiful. This make some people angry as they see this as a big company taking advantage of vulnerable people who have got no choice but to do this job. This can have negative repercussions on the company due to the views that people have got about these sort of working conditions this has happened and has effected Nike before.
Back in 1990s the consumer were not liking how Nike did things so they chose to boycott it and stopped purchasing Nike products this had a negative effect on Nike as they have lost out on large sums of money so as a result they had to change the way in which they had their products made. A way in which a company can show that they are more ethical would be by stocking and selling fair trade products. These are products which when sold and percentage of the sale fee would be given back to the farmers who produced it. Fair trade can be found in multiple different retailers such as co-operative, M&S, Cadburys and Sainsbury’s. if a company is seen stocking fair trade products then this would give them a good image as it would show that they are trying to help prolong the cocoa farmers and help them to make more money instead of taking all of the profits for themselves and leaving the people who grew it with next to nothing.