Management and Organizational Studies 2275A/B Study Guide - Caveat Emptor, Implied Warranty, Due Diligence

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CHAPTER 23: SALES & MARKETING: THE CONTRACT, PRODUCT, & PROMOTION
CHAPTER 23
SALES & MARKETING: THE CONTRACT,
PRODUCT, & PROMOTION
Objectives
After studying this chapter, you should have an understanding of:
the scope of marketing law
the rights and obligations in a contract of sale
the legal obligations associated with the product component of marketing
the legal obligations associated with the promotion component of marketing
Learning Outcomes
Understand how the marketing campaign is subject to marketing law (page 585)
Understand the terms in every sale of goods contract that are implied under the Sale of
Goods Act (page 586)
Understand the implications of the distinction between a breach of an implied condition
and a breach of an implied warranty (page 587-588)
Understand the voluntary and prescribed rules relating to product design and manufacture
(page 596)
Understand the purpose and requirements of the Consumer Packaging and Labelling Act
(page 598)
Understand the power of the Competition Bureau to sanction misleading advertising
(page 602-603)
Understand which selling practices are prohibited and which are controlled (page 606)
Chapter Summary
Compliance with the relevant laws coincides, for the most part, with good marketing
practice. Providing reliable and safe products and ensuring that consumers are accurately
and fully informed goes a long way toward achieving the key feature of effective marketing
policy meeting customer expectations. Inevitably, however, some market participants
disregard these basic principles and attempt to profit at the customers’ expense. If there were
no regulations in place, such practices would clearly place “good” producers at a distinct
disadvantage. Legislation is therefore intended to ensure fair competition. All sellers must
be aware of the implied conditions and warranties of the Sale of Goods Acts and other
consumer protection legislation. The rules for establishing when title to goods shifts are set
out in the Sale of Goods Acts unless otherwise provided by contract. Sellers require
knowledge of the meaning of a series of standard terms used in shipping of goods, such as
c.i.f. and f.o.b. Two parts of the marketing mix that are affected by the law are product and
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PART 7: SALES AND MARKETING
promotion. Regulation relating to the product component addresses the product (or service)
itself and its packaging and labelling. The producer must be familiar with voluntary and
statutory guidelines for product design and standards. Products labelling regulation is
important where the customer cannot see the goods, and there are explicit requirements for
disclosure. In promoting goods, and there are explicit requirements for disclosure. In
promoting goods, the most important regulation is the false and misleading advertising
provision of the Competition Act. More specific legislative provisions also apply for
example: to tests, testimonials and performance claims. Finally, close attention will be paid
to any practices that induce purchases through unfair or improper means.
Study Outline
Use this outline to prepare a complete set of notes for this chapter.
Marketing Law – page 585
_______________________________________________________________________
_______________________________________________________________________
Contract of Sale – page 586
_____________________________________________________________________
_____________________________________________________________________
Sale of Goods Act________________________________________________________
Breach of condition___________________________________________________
Breach of warranty____________________________________________________
Consumer Protection Legislation_____________________________________________
Transfer of title _______________________________________________________
Delivery of goods _____________________________________________________
Bill of lading ______________________________________________________
c.i.f. _____________________________________________________________
f.o.b. _____________________________________________________________
c.o.d. _____________________________________________________________
The Product – page 596
_______________________________________________________________________
_______________________________________________________________________
Product design and manufacture_____________________________________________
_______________________________________________________________________
Canadian Standards Association__________________________________________
Product attributes/characteristics_____________________________________________
_______________________________________________________________________
_______________________________________________________________________
Contracts for the international sale of goods_________________________________
Copyright © 2011 by Nelson Education Ltd.
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CHAPTER 23: SALES & MARKETING: THE CONTRACT, PRODUCT, & PROMOTION
_______________________________________________________________________
Product packaging and labelling_____________________________________________
_______________________________________________________________________
Labelling of prepackaged goods__________________________________________
Consumer Packaging and Labelling Act (CPLA)__________________________
_______________________________________________________________________
Product warnings___________________________________________________
_______________________________________________________________________
Promotion – page 601
_______________________________________________________________________
Industry standards and legislation____________________________________________
_______________________________________________________________________
Misleading advertising_____________________________________________________
Competition Act_______________________________________________________
Investigation of complaints______________________________________________
Civil or fast track processes______________________________________________
Defences ___________________________________________________________
Due diligence______________________________________________________
Performance claims_______________________________________________________
_______________________________________________________________________
Tests and testimonials_____________________________________________________
_______________________________________________________________________
Warranty and service promises______________________________________________
Promotion through selling practices__________________________________________
Bait and switch________________________________________________________
Unfair practices_______________________________________________________
Contests
_______________________________________________________________________
SELF-ASSESSMENT
Key Terms
Briefly define each term in the space provided.
Marketing law – page 586
_______________________________________________________________________
_______________________________________________________________________
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