McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.

CHAPTER TWENTY-TWO PUBLIC POLICY ISSUES

Life Cycle of a Public Concern Stirring Trial Support Political Arena Regulatory Adjustment Figure 22.1

Product Liability: Typology of Injury Sources Inherent Risk in Product Design Defects – Dangerous Condition – No Safety Device – Inadequate Materials Defects in Manufacture Inadequate Instructions or Warnings Dangers After Use

Four Legal Bases for Product Liability Negligence –Manufacturer let the product be injurious Warranty –A promise –Express warranty: a statement of fact about a product –Implied warranty: arises when product is made available for a given use

Four Legal Bases for Product Liability (continued) Strict Liability –Seller is responsible for not putting a defective product on the market –Defenses: assumption of risk; unforeseeable misuse; not defective Misrepresentation – Implied use of product, even if not defective Other Legislation Consumer Product Safety Act/Safety Commission

Which Are the Real Product Warning Labels? 1. On a disposable razor: “Do not use this product during an earthquake.” 2. On a rock garden: “Eating rocks may lead to broken teeth.” 3. On a roll of Life Savers: “Not for use as a flotation device.” 4. On a hair dryer: “Do not use while sleeping.” 5. On a piano: “Harmful or fatal if swallowed.” 6. On a cardboard windshield sun shade: “Warning: Do not drive with sun shield in place.” 7. On shin guards: “Shin guards cannot protect any part of the body they do not cover.” 8. On syrup of ipecac: “Caution: may induce vomiting.” 9. On an iron: “Do not iron clothes while being worn.” 10. On a plastic sled: “Not to be eaten or burned.” 11. On work gloves: “For best results, do not leave at crime scene.” 12. On a jet ski: “Riders may suffer injury due to forceful entry of water into body cavities while falling off this craft.” 13. On a carpenter’s router: “This product not intended for use as a dentist’s drill.” 14. On a blender: “Not for use as an aquarium.” 15. On a stroller: "Always remove child from stroller before folding." Figure 22.4

Other Areas of Public Policy Debate Environmental Needs Worthy Products Morality Monopoly Personal Ethics (what would you do?)

Environmental Needs A new product is said to hurt the environment if: –Its raw materials are scarce or hard to get to. –Its design or manufacture causes pollution or excess power usage. –Its use causes pollution. –Its disposal cannot be handled by recycling. Some companies test market their products in Germany and Scandinavia, because of the strict greenness tests there.

Public Policy Problems and the New Products Process Figure 22.6

Worthy Products Coffee manufacturers agreed to produce some brands containing no beans from El Salvador. Manufacturers have been asked to produce special exercise equipment for the handicapped or modified products for the elderly. Orphan drugs supported by the federal government; otherwise would not be commercially feasible due to few users.

What Can the New Product Manager Do? Include in Strategy and Policy – Consider public policy implications in PIC Control Systems Product Testing Marketing Prepares Warnings/Labels Adequate Market Testing (to identify miscommunications) Education (to company personnel and customers) External Affairs