REGULATORY ENVIRONMENT
the laws and regulations that federal, state, and local governments develop to exert control over business practices

e.g., in the U.S.:

• Food and Drug Administration (FDA, 1906)
• Federal Trade Commission (FTC, 1914)
• National Highway Traffic Safety Administration (NHTSA 1970)
• Consumer Product Safety Commission (1972)

These organizations attempt to ensure that all marketers are on an even playing field, and that the market is fair for buyers.

REGULATORY ENVIRONMENT (U.S.)

• 1960s-1970s: increase in government regulation

• 1980s: increase in government deregulation activities

• 1990s: increase in reregulation activities?

NOTE: Industry self-regulation is just as important as government regulation. E.g., DMA, local BBB. The Direct Marketing Association would like to ensure as much as possible that people are not being bothered by unscrupulous telemarketers; the local Better Business Bureau would like to ensure as much as possible that people have trust in the local business community.

CONSUMERISM
the set of activities of government, business, independent organizations, and concerned consumers that are designed to protect the rights of consumers

e.g.:

• Consumers Union - Consumer Reports
• Nader's Raiders

SOME PUBLIC POLICY ISSUES

Deceptive Advertising:
an ad which has the capacity to deceive a measurable (20 to 25%) segment of the public

Advertising Substantiation:
FTC (U.S.) idea that companies must provide evidence for the truth of their claims

Corrective Advertising:
advertising that is mandated by a federal agency (U.S.) to correct consumer impressions that were formed by previously misleading advertising