Ch 13, Instructor’s Manual, Business & Society, Carroll 10e
Chapter 13
Consumer Stakeholders: Information Issues
LEARNING OUTCOMES
After studying this chapter, you should be able to:
1. Describe the consumer movement and identify the consumer’s Magna Carta and explain its
meaning.
2. Identify product information issues that are affected by business’s social and ethical
4. Explain recent consumer-related legislation that has been passed—Credit Card Act
(CARD) and the Consumer Financial Protection Bureau (CFPB)
6. Identify the three moral models and their likely perspectives on consumer stakeholders.
TEACHING SUGGESTIONS
INTRODUCTION – The relationship between business and consumers is at the heart of
business’s role in society. Because the products and services that a business produces are the
primary reason for interaction between business and consumer, the ways in which that exchange
takes place is of central importance. In this chapter, the authors focus on the consumer
movement and product information issues, particularly advertising, warranties and labeling.
KEY TALKING POINTS – This chapter should be an easy one to discuss with students. Having
been immersed in a consumer society for all of their lives, and having been inundated with
advertising, they will be aware of many of the issues raised here. The authors describe four
types of advertising abuses: ambiguous advertising, concealed facts, exaggerated claims and
psychological appeals. One way to introduce this topic is to play commercials that illustrate a
particular advertising abuse and ask the students to identify the abusive tactic (applicable
commercials can be found on Youtube). Specifically, instructors can use commercials for health
or weight loss supplements (e.g., Dexatrim) to illustrate ambiguous advertising and Budweiser
“King of Beers” and “9/11 Salute” advertisements to demonstrate exaggerated claims and
psychological appeals, respectively. The interesting question will be if students are able to
recognize the ethical issues inherent with the use of these types of advertising abuses or if they
accept the message so completely that they see little problems with it.
Ch 13, Instructor’s Manual, Business & Society, Carroll 10e
see as many as 20,000 commercials in a year. Exposure to this many ads has to make some
impression on children, underscoring the need for us to carefully consider the ethical issues
involved in advertising.
Malcolm Gladwell, in The Tipping Point (New York: Little, Brown and Company, 2002), reports
on extremely interesting research that Sesame Street performed on young children’s attention
patterns while watching television. This information is also relevant to the concerns about
advertising to children.
PBS’s show Frontline aired a segment called “The Persuaders” in 2004 that does an excellent
job of exploring many of these issues. It was particularly good in its discussions of
psychological appeals and their use in product advertising and political campaigns. This video is
well suited to supplementing discussions of these issues.
PEDAGOGICAL DEVICES – In this chapter, instructors may utilize a combination of:
Cases:
1-Wal-Mart- The Main Street Merchant of Doom
2-The Body Shop (A) – Pursuing Social and Environmental Change
16-Coke & Pepsi in India
20-DTCA – The Pill Pushing Debate
Ethics in Practice Cases:
What Do We Tell the Customer?
Should the Word Free Be Banned in Advertising?
Do These “Advertising Traps” Represent Ethical Advertising?
Should Food Advertising to Children be Banned?
Return Fraud – A Growing Business
Ch 13, Instructor’s Manual, Business & Society, Carroll 10e
Spotlight on Sustainability:
Are Consumers Willing to Pay More for Sustainability?
Power Point slides:
LECTURE OUTLINE
I. THE CONSUMER MOVEMENT
A. Ralph Nader’s Consumerism
B. Consumerism Today
C. Product/Service Information Issues
D. Advertising Issues
II. THE FEDERAL TRADE COMMISSION (FTC)
A. The FTC in the 21st Century
B. Consumer Financial Protection Bureau
III. SELF-REGULATION IN ADVERTISING
A. The National Advertising Division’s Program
IV. MORAL MODELS AND CONSUMER STAKEHOLDERS
V. SUMMARY
SUGGESTED ANSWERS TO DISCUSSION QUESTIONS
Students should recognize that their answers to these discussion questions should be well
reasoned and supported with evidence. Although some answers will be more correct than others,
students should be aware that simplistic answers to complex questions, problems, or issues such
as these will never be “good” answers.
1. Question: In addition to the basic consumer rights expressed in the consumer’s Magna
Carta, what other expectations or rights do you think consumer stakeholders have of
business? Do consumers have some moral rights that have not yet been articulated in law?
Answer: Two concerns that are relevant, but most consumers don’t consider, are the right
of all consumers to an equitable distribution of goods and services, and the right to a
2. Question: What is your opinion of the consumer movement? Is it “alive and well” or is it
fading away? Why has consumerism been such an enduring movement for so long?
Answer: The consumer movement seems to be alive and well, in terms of advocating for
quality goods and services. Most of the products we buy today work well and are
reasonably safe. Furthermore, as the text notes, while the consumer movement still occurs
3. Question: Give an example of a major abuse of advertising via social media from your
own observations and experiences. How do you feel about this as a consumer?
Answer:
Social media, such as Facebook, is able to track what you’re looking at while online. Ads
can then be tailored to you, either through other Facebook pages that show up as
I also have concerns over the growing use of product placement for the following reasons
Ch 13, Instructor’s Manual, Business & Society, Carroll 10e
4. Question: Are companies genuinely interested in marketing sustainable products or is this
just a marketing strategy that is popular today. Do you think “green fatigue” has set in? If
so, what should companies now do?
Answer: Because health and environmental claims attract customers, many companies
5. Question: Does the new Consumer Financial Protection Bureau make sense? How do you
keep politics out of government agencies? In a free market, why shouldn’t consumers be
left to fend for themselves with respect to consumer financial products?
Answer: There has been a need for consumer financial products legislation for some time.
Certain businesses have exploited consumers’ financial circumstances, lack of education or
GROUP ACTIVITY
Divide students into groups of four to five students. Have each student keep a journal where
they log each television show or movie that they watch during a two to three week period.
Students should track each time they spot a product placement or a plot placement in a television
show or movie. Once the two to three week period is over, students should meet in their group
to discuss the various product placements and/or plot placements that they viewed. Students
should discuss any ethical issues related to the product placement and/or plot placements
associated with the programs and movies that they watched. Students should select the most
controversial product placement and/or plot placement and present it to the class, including an
analysis of the ethical issues involved. If possible, students should show a television or movie
clip with the product placement and/or product placement for the other students to view.
INDIVIDUAL ASSIGNMENTS
Individual Assignment 1 – GoodGuide
Ch 13, Instructor’s Manual, Business & Society, Carroll 10e
Provide students with the following instructions:
(1) What is the product’s overall score? What does this score mean?
(2) Environment: What is the product’s score regarding environmental impact?
What factors were considered in calculating this score? Why did the product earn this
score?
(3) Community (Society): What is the product’s score regarding society? What
factors were considered in calculating this score? Why did the product earn this score?
(4) Employees (Workers): What is the product’s score regarding workers? What
factors were considered in calculating this score? Why did the product earn this score?
(5) Consumers: What is the product’s score regarding consumers? What factors
were considered in calculating this score? Why did the product earn this score?
You should include a printed copy of the website with your typed response.
Individual Assignment 2 – It’s Guaranteed
Have students research the difference between a full and limited warranty. Ask students to