Question

In: Operations Management

A common consumer concern is that retailers will not stand behind the promises they make in...

A common consumer concern is that retailers will not stand behind the promises they make in advertisements. Explain, via an analysis, the principals associated with consumer protection laws. Include the answers to the following questions. Should Pepsi have been required to provide the promised prize in this contest (or the financial equivalent) or should the customer (John Leonard) have known that it was an example of "puffery" and that winning a Harrier Jet was not a realistic prize option? How should a court resolve a matter like this, what should Pepsi's obligations be, and what if anything should John Leonard have received for his trouble?

Your paper should be 500-650 words in length

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Expert Solution

answer-

retailers are the those who sells the products of the manufacturer via departmental stores, showroom outlets etc.the main purpose of retailers is to sell thier products to customers at any cost.sometimes retailers promote thier products by advertisement which shows some fun element just to attract the customers but people misunderstate the subjective nature of the advertisement.this misunderstatement made the assumptions that retailers are making fake promises which they can not fulfilled even though the promise was just subjective in nature people should not take that seriously.

on the other hand if retailers makes objective promises to the audience through advertisement which should be ethical & legal like advertisement showing buy one get one free, buy 72 inches TV & get speakers free with terms & conditions apply.if customers fulfill all the terms & conditions then retailer should fulfill thier promises.

following are some points which comers under principals associated with consumer protection laws. -

  • retailer should make those promises which they can fulfilled to customers.
  • customers should understand the difference between puffery & illegal advertisement.
  • the advertisment of retailers should be ethically right means no hidden agenda behind the advertisement or mislead the customers by advertisement etc.
  • retailers would be liable for the compensation if they can not fulfill the legal promise made by advertisement.

according to me, the pepsi uses the  Harrier Jet as subjective means the claim for jet is for fun element in the advertisement/contest under which Customer John Leonard should have known that company won’t be giving $33 million worth Jet in a price for $700,000 & it was an example of "puffery" means claims can not be verified objectively & also puffery is legal so pepsi has no liability to pay the john any compensation.

if this case goes to the court then the conclusion would be the same because the winning a Harrier Jet was not a realistic prize option & it is an example of puffery as earlier said is legal.

* above answer is written in my own words.hope this answer would help you.good luck & rate.


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