Basic Marketing: A Global Managerial Approach

Perreault−McCarthy: Basic

Marketing: A

Global−Managerial

Approach, 14/e

10. Product Management
    and New−Product
    Development

Text © The McGraw−Hill

Companies, 2002

292 Chapter 10

instead of desirable ones. They emphasize immediate satisfaction and give little

thought to their own long-term welfare. And some competitors willingly offer what

consumers want in the short run. Generating socially responsible new-product ideas

is a challenge for new-product planners, but consumer groups are helping firms to

become more aware.

Safety must be considered

Real acceptance of the marketing concept certainly leads to safe products. But

consumers still buy some risky products for the thrills and excitement they pro-

vide—for example, bicycles, skis, hang gliders, and bungee jumps. Even so,

companies can usually add safety features—and some potential customers want

them.

The U.S. Consumer Product Safety Act(of 1972) set up the Consumer Product

Safety Commission to encourage safety in product design and better quality con-

trol. The commission has a great deal of power. It can set safety standards for

products. It can order costly repairs or return of unsafe products. And it can back

up its orders with fines and jail sentences. The Food and Drug Administration has

similar powers for food and drugs.

Product safety complicates strategy planning because not all customers—even

those who want better safety features—are willing to pay more for safer products.

Some features cost a lot to add and increase prices considerably. These safety con-

cerns must be considered at the screening step because a firm can later be held liable

for unsafe products.

Products can turn to liabilities

Product liabilitymeans the legal obligation of sellers to pay damages to individ-

uals who are injured by defective or unsafe products. Product liability is a serious

matter. Liability settlements may exceed not only a company’s insurance coverage

but its total assets!

Relative to most other countries, U.S. courts enforce a very strict product lia-

bility standard. Producers may be held responsible for injuries related to their

products no matter how the items are used or how well they’re designed. Riddell—

whose football helmets protect the pros—was hit with a $12 million judgment for

Products that can be regenerated
or remanufactured provide both
immediate satisfaction and long-
run consumer welfare.