DIRECT MARKETING
ARIZONA STATE UNIVERSITY
MKT 402 - CONSUMER BEHAVIOR
WEEK 4
Introduction:
Direct marketing is a form of communicating an offer, where organizations
communicate directly to a pre-selected customer and supply a method for a direct response.
Among practitioners, it is also known as direct response marketing (McFadden, 2019).
Direct marketing or Direct Message is the most effective element in conducting a promotion
mix. Direct marketing is a form of the stages of the marketing implementation process
which starts from providing products in the form of goods / services, then continues with the
implementation of transactions between sellers and buyers, which forms a behavior in the
form of attitudes and responses to marketing given based on the level of preference, belief
and purchase action (Tjipto, 2000).
Another definition also explains that direct selling or personal selling is a way of
promoting the sale of goods or services carried out by sending sales staff to meet consumers
who are expected to buy the goods or services being promoted (Sukirno et al., 2014, p. 238).
System This marketing is more interactive, utilizing one or more advertising media to
generate measurable responses and or transactions at any location.
Promotional communication is addressed directly to individual consumers with the
aim that these messages are responded to by the consumers concerned, either by telephone,
post or coming directly to the marketer's place. This technique developed in response to
market demasification, where there are more and more market niches with highly
individualized needs and choices (Hurriyati, 2015, p. 61).
It can be concluded that direct marketing emphasizes direct interaction with buyers
with various methods.
A.
Forms of Marketing Direct
According to Kotler, Armstrong, Ang, Leong, Tan & Tse (Kotler et al., 2005, p. 450),
the forms of direct marketing activities are divided into seven forms, namely personal
selling, telephone marketing, direct-mail marketing, catalog marketing, direct-response
television marketing, kiosk marketing and online marketing. An explanation of the forms of
direct marketing or direct marketing is as follows:
1. Personal Selling
Personal Selling is the process of marketing products directly face-to-face with their
prospective buyers. Marketing management will generally explore targeted places and
strategic markets for products.
2. Telephone Marketing
Using the telephone to sell directly to consumers, targeted and well-designed, can
bring many benefits, including ease of purchase and information about products and
services. But telemarketing is often perceived as annoying by consumers who call it junk
phone calls.
3. Direct-Mail
Direct marketing through mailing to send an offer, event, reminder or other to a person
with a specific existing address. There are three most popular forms of mail delivery today,
namely: fax mail, e-mail and voice mail.
4. Catalog Marketing
Catalog marketing is direct marketing that companies can send to consumers using
merchandise catalogs, special customer catalogs and business catalogs in printed and non-
printed form such as using CDs, videos or via the internet.
5. Direct-response Television Marketing
There are two forms of direct-response television marketing, the first is direct-
response advertising where direct marketers persuasively explain the product by giving
consumers a toll-free service number or providing a website address that can also serve as an
order products. Television viewers can also watch advertising programs or info commercials
for each product. The second form is home shopping channels, which are created to sell
goods and services through television programs.
6. Kiosk Marketing
Business marketers use kiosks for trade shows and to collect sales profits and also
provide information about their products. Kiosks can now also be online, as many
companies are doing today as a hybrid of the real and virtual worlds.
7. Online Marketing
The last type of direct marketing is promotion using social media. Online marketing is
a marketing strategy that uses third-party services such as social media. For example, using
AdWords (Google) and Facebook Ads (Facebook).
There must be various forms of direct marketing, as described above, which have at
least the following 4 (four) characteristics: (Firmansyah, 2020, p. 28).
1. Non-public, meaning that marketing is targeted at specific people with predetermined
market segments.
2. Customized, because the target has been determined, the content of the message that
will be used in marketing is also adjusted to the target. For example, targeting children,
it is impossible to use words that are difficult for children to understand.
3. Latest, the content of the message in marketing must adjust to what is currently hot. It is
not necessary to follow the existing trends but not to be outdated.
4. Interactive, changing the message can be done to create a good and fruitful mutual
communication.
B.
Marketing Challenges Live
Direct marketing tools and techniques are used by companies that distribute their
products through traditional distribution channels. Direct marketing plays an important role
in integrated marketing communication programs for companies that produce consumer
goods and industrial products. Related to this, it poses a challenge for companies that
implement direct marketing systems, not only do they have to provide considerable funds
each year to develop and maintain databases containing customer information. They also
use telemarketing to call customers directly and try to sell their products. Today's marketing
managers also send letters to customers ranging from simple regular letters, promotional
sheets (flayers), brochures, catalogs and even vidiotapes in an effort to inform about the
goods and services offered.
In addition to these problems, another challenge for companies using direct marketing
methods in the digital era is that companies do not know directly whether the products or
services they offer are needed by consumers. Not to mention the attitude and openness of
consumers with marketers who come. As a result, the prospect becomes raw alais
unsuccessful closing (Morissan, 2010, p. 22). The disadvantages of direct marketing are as
follows:
1. Disruptive
Some people find direct marketing annoying. For example, SMS blasts by cellular
providers. In one day, customers can receive many SMS containing promotions. This makes
consumers uninterested in using the promoted product.
2. Number of Competitors
The number of businesses that use direct marketing makes a company not look
special. For example in email marketing. There are so many emails from companies that use
direct marketing that the promotions received will be drowned.
3. Resources
Direct marketing such as direct selling is also time-consuming and labor-intensive. In
certain types of businesses, direct marketing does not generate a response that is worth the
resources expended.
C.
Marketing Ethics Issues Direct
Related to the various advantages of direct marketing, it has serious problems when
viewed from the consumer's perspective. Some of the ethical issues are as follows: (Public
and Ethical Issues in
Direct Marketing 1 Aggravation Dislike | Course Hero, n.d.)
1. Aggravation
Sometimes people feel disturbed if there are many incoming marketing offers,
especially using media via telephone. There are also product notifications made via SMS.
This method is annoying if done with the principle of coercion.
2. Injustice
Marketing utilizing Marketing capitalizes on consumers' ignorance of the product
being offered with the lure of the benefits of using the product. Usually done on elderly
people.
3. Fraud and Forgery
Some direct marketers design letters and write texts that are meant to deceive. This
kind of method is done only to attract interest from consumers and only benefits that person.
4. Attacks on Privacy
Marketers often contact customers during working hours or breaks. This kind of thing
is considered very disturbing, moreover prospective buyers also have their own privacy.
D.
Advantages of Direct Marketing
Direct marketing also provides benefits to buyers, including: (Firmansyah, 2020, pp.
305-307)
1. Cozy
Customers do not have to face traffic jams, find parking lots and shuffle through
stores and aisles to find and research products. They can shop by comparing products
through catalog mailings and browsing internet sites.
2. Easy and Personal
Customers face less haggling noise when buying and do not have to face
salespeople or be subjected to pushy and emotional trade persuasion. Business buyers
can learn about available products and services without having to wait and settle with a
salesperson.
3. Comparative Information
Online channels and the internet also give customers access to a wealth of
comparative information, information about the company, its products and competitors.
Good sites often provide more information in a more useful form than the most attentive
salesperson in the profession can provide.
4. Interactive and Immediate
Customers can often interact with a seller's website to create exactly the
configuration of information, products or services they want, then order or download the
information instantly.
While the advantages of implementing direct marketing for sellers are:
1. Customer Relationship Building
Direct marketers compile or purchase databases containing detailed information about
potentially profitable customers. Using that database, they build strong, ongoing
relationships with customers.
2. Lower Costs and Increase Speed and Efficiency
Online marketers are spared the cost of maintaining a store and the accompanying
rent, insurance and utilities. Customers deal directly with sellers so online marketing often
results in reduced costs and improved efficiency of channel and logistics functions such as
order processing, inventory handling, shipping and trade promotion.
3. Flexibility
Marketers make constant adjustments to their offers and programs. For example, an
online catalog can be adjusted daily or even hourly, adapting product selection, pricing and
promotions to suit changing market conditions.
4. Global
The Internet is a global medium that allows buyers and sellers to click from one
country to another within seconds. Marketers Even small online businesses will find that
they have direct access to the global market.
THE INFLUENCE OF INDIVIDUALS AS A REFERENCE GROUP ON
CONSUMER BEHAVIOR:
A.
Definition of Group References
A reference group is a group of individuals who interact with each other to provide
real references both quickly and slowly to influence a person in purchasing and
consumption. Reference groups or can also be called reference groups can be used as a
reference for a person in making purchasing decisions. A common factor among all types of
reference groups is that they are used by members as a point of reference for evaluating their
actions, beliefs and attitudes. In society there are various types of reference groups
including:
1. Family
The family is a form of basic group that plays an important role in influencing other
family members on consumer behavior in using products. For example, a mother has a
strong influence on her daughter in terms of using beauty products, seasonings, clothing
styles. A father has a strong influence on a son in terms of hairstyle, hair oil, shampoo.
2. Friendship Group/Friends (Informal)
Friends are the second basic group that has an important influence in influencing a
person's behavior. This group is formed due to similarities in things, including similar
hobbies, brands, attitudes, behavior and social needs.
3. Formal Social Community Group
In society, there are groups that people deliberately form that have the same goals and
some of the same things in their members, such as PKK arisan, religious groups, sports
groups. For example, sports groups have a strong influence in influencing their groupmates
in terms of using certain brands in the accessories and equipment they use.
4. Working Group
Those who spend time in the workplace will directly form work groups. Work group
involvement is important because there are more activities carried out in work groups. In
between jobs, communication interactions sometimes occur, not only limited to work but
with regard to other everyday issues such as shopping behavior, brands and the latest
products on the market. For example, a coworker has a strong influence on the brand of
bags, shoes, clothes and so on.
According to Kotler & Armstrong (2008), factors that influence consumer behavior
include:
1. Cultural Factors
Cultural factors have a broad and deep influence on consumer behavior. Sellers or
marketers must know the role played by cultural factors, sub-culture and social class.
2. Social Factors
Consumer behavior is also influenced by everything that causes social changes around
the environment. Certain social groups are considered to have an influence on changes in the
behavior of every human being.
3. Personal Factors
Consumer behavior is also influenced by personal characteristics, which include age
and life cycle stage, occupation, economic conditions, lifestyle, personality and self-concept.
4. Psychological Factors
Important psychological factors are motivation, perception, knowledge, attitudes and
beliefs.
B.
Group Type References
The classification of reference groups according to Peter, J Paul and Olson C, (2005),
is divided into several groups:
1. Formal and Informal
Formal reference groups are formed and clearly detailed, for example work groups in
the office, division groups, PKK social gathering groups. Whereas informal reference
groups are not clearly specified, for example, friendship groups/friends.
2. Primary and Secondary
Primary groups measure the involvement of direct and face-to-face interactions more
often, for example interactions with family, friends. Meanwhile, secondary groups measure
the involvement of less direct and face-to-face interactions, for example interactions with
PKK groups, sports groups.
3. Membership
Membership is the entry of a person into an association of reference groups, for
example sports groups, nature lovers groups.
4. Aspiration
Means that a person aspires to join and match the reference group. A group that shows
a desire to follow the norms, values, behaviors of others who are used as reference groups.
Members of the aspiration group seek to make associations with others who they refer to by
behaving in the same way.
5. Dissociation
Has meaning someone who tries to avoid association with the reference group.
C.
How Reference Groups Influence Consumer Choices
One of the things that will influence consumers in decision making is the reference
group. Reference groups will influence a person through their function as carriers of value
expression, normative influence and information influence (Suwarman, 2011).
1. Effect of Value Expression
A consumer will buy an expensive cellphone to be considered capable by others. The
consumer thinks that buying an expensive cellphone will be admired by others. Consumers
have the idea that one of the indicators that someone will be considered successful is having
an expensive cellphone. Reference groups will influence a person in their function as
carriers of value expressions.
2. Normative Influence
Normative influence is the influence of a reference group on a person through social
norms that must be obeyed. Normative influence will be strong on a person to follow a
reference group if there is strong pressure to comply with existing norms. Normative
influence will be stronger on a person to follow a reference group, if there is: a) strong
pressure to comply with existing norms, b) social acceptance as a strong motivation, c)
products and services purchased will be seen as a symbol of social norms.
3. Influence of Information
Reference groups will influence a consumer's choice of product or brand or service
because reference groups are highly trusted and heard. An example is health services in
hospitals.
D.
Influence Process Model Individual
The model is a picture/reaction shown by an individual where the reaction can
influence awareness to respond.
The model defines consumer decision making as the process of feeling and evaluating
brands, considering how alternative brands meet consumer needs and deciding on a brand.
According to Assael (2001) there are two broad influences that affect individuals, the first is
the individual consumer where needs, brand perceptions, characteristics and attitudes,
towards alternatives that influence brand choice. The second influence on consumer decision
making is the environment. The individual buying environment is described by norms and
values and by face-to-face groups.
Consumer behavior aims to understand how individuals make purchasing decisions,
where individuals as consumers have interesting diversity. There are many factors that
influence and interact with each other so that it is not easy to conclude a view of consumer
behavior. According to Armstrong and Kotler (2008) companies can study actual consumer
purchases to find what they buy, where and how much. Consumer behavior is influenced by
several factors including:
1. Cultural Factors
This factor consists of two, namely cultural factors and sub-cultural factors. Cultural
factors are the most basic determinants and desires of behavior such as values, norms,
perceptions, behavior. While sub-culture is a smaller element of culture and provides
characteristics and socialization specific to its members such as religion, pride, group, race.
2. Social Factors
Consumer behavior is also influenced by social factors such as reference groups that
have the influence of face-to-face interactions, family and social status.
3. Personal Factors
a.
Age and Life Cycle
From birth to old age, the needs of a person will be different and varied. A
person's tastes also differ in terms of dress, furniture, and recreation in relation to their
age.
b.
Employment and Economic Conditions
A person's consumption is influenced by his job, a factory worker will buy work
clothes, work shoes and a food box, but a company director will buy expensive clothes
and travel in a private vehicle.
c.
Lifestyle
A person's lifestyle in the needs of daily life expressed in the activities, interests
and opinions concerned.
d.
Personality and Self-Concept
Each individual will have a different personality and will influence the behavior
of others.
4. Psychological Factors
It consists of four main factors including motivation, perception, learning, beliefs and
attitudes. The motivation of individuals who live in suburban areas will be different from
individuals who live in the city center, among others, in terms of choosing brands, models,
cuisine flavors and others.
THE RELATIONSHIP BETWEEN SOCIAL CLASS AND CONSUMER BEHAVIOR
A.
Definition of Class Social
A social class is a group of people who exist and occupy a social layer based on
economic criteria. Basically, all societies have social strata. These strata can also sometimes
take the form of a caste system where different members of their caste are raised with
specific roles and cannot change their caste membership. Stratification is more often found
in the form of social classes. Social class is a relatively homogeneous and permanent
division of society, which can be arranged hierarchically and also has members with similar
values, interests and behaviors. People who belong to a social class group will also be
similar in terms of income and social status in society. They may work in more or less the
same and similar occupations and they are also likely to have a common taste also in music,
clothing, leisure activities and art.
A consumer's social class is related to his or her position in society. Factors such as
education, profession and income determine the consumer's class in society. Almost all
groups make distinctions between members in terms of comparative advantage, power and
access to valuable resources. This social hierarchy will create a status hierarchy where
consumers prefer some products over others. Income is an important indicator of social
class, but its proportion is far from perfect. Factors such as place of residence, cultural
interests and worldview also determine social class. As income distribution changes around
the world, it will become increasingly difficult to distinguish members of social classes.
Many products are successful because they attract a new group that marketers call the mass
class, at least those who have enough income to buy luxury goods on a small scale.
B.
Social Class Size and Impact
Social class is a complex concept that depends on many factors. Not surprisingly,
social scientists are divided on how best to measure social class. Early indicators were the
status trait index in the 1940s and the social status index. In society, social grades are
divided into "haves" and "have-nots" (although the number of "haves" is relative). The place
you in the social structure not only determines how much money you spend, but also how
you spend it.
Sociologist W. Lloyd Warner proposed in 1941 the most influential classification of
class structure. Warner has identified six social classes including: upper top, lower top,
upper middle, lower middle, upper bottom and lower bottom.
Social class can generally describe the overall ranking of people in society. People of
the same social class have more or less the same social status in society. They work in more
or less similar professions and tend to have similar lifestyles based on similar income levels
and preferences. These people tend to share and interact with many ideas and values about
how they lived after the 1950s. The index combines individual characteristics (income,
housing type, etc.) into a social class status label. The accuracy of this configuration is
controversial among researchers. One study claims that raw education and income
measurements, as well as combined status measurements, are used for segmentation
purposes.
American consumers generally have no problem placing themselves either in the
working class (lower middle class) or the middle class. Workers with relatively prestigious
jobs still consider themselves to be working class, even though their income is in line with
that of many white-collar workers. This fact reinforces the idea that the terms "working
class" or "middle class" are subjective. Their importance speaks to self-identity, at least as
much as financial well-being. Marketing researchers first suggested that people from
different social classes could be differentiated. However, many of the methods originally
used to classify consumers are outdated and no longer effective today. One reason for this is
that social scientists designed measurements for most social classes with the traditional
nuclear family in mind. This unit includes middle-aged male workers and full-time female
homemakers. These measures struggle to accommodate the most common two-income
households today, which are young singles living alone, or female-led households. Another
problem in measuring social class is the increasing anonymity of our society. Previous
studies relied on the reputation method where researchers conducted extensive interviews in
the region to determine a person's reputation and background. If they used the information
and also followed people's interaction patterns, they could create a comprehensive picture of
people's social status. However, this approach is hardly applicable in most societies today.
The compromise is to interview an individual to obtain demographic data and combine that
data with the interviewer's subjective impression of each individual's wealth and standard of
living.
C.
Class Movement Social
Social movement is one of the political science studies that discusses resistance
movements by revealing topics and discourses along the way. Social movements are the
main form of collective action (group action). While some sociologists refer to social
movements as a form of collective action rather than a form of collective action, sociologists
classify social movements as a form of collective action (Locher, 2002; Crossley, 2002).
According to Hasanuddin (2019), social movements have many characteristics. That is, first,
it is carried out by many people who have the same vision, mission and goals for a particular
issue. Second, you need to achieve certain goals. Third, it is organized by certain social
groups with written and unwritten rules.
Value-Added Theory, this theory views that social movements are complex with
various conditions, namely eligibility and structural tension. Structural eligibility is the
general perception of a particular phenomenon and structural tension is the state of society
that experiences tension because it fails to meet the general expectations of the phenomenon.
Value-added theory argues that social movements exist to relieve structural tensions. Efforts
to relieve tension are made through mass action by disseminating information about certain
issues and mobilizing action. The grouping of types of social movements follows various
aspects, purpose exercises and aspects of achievement. Blumer (Stolley, 2005:189) classifies
social movements into two types, namely:
1. General social movements, which are movements that change social values, such as the
women's movement that leads to movements that change the status and perspective of
women.
2. Specialized social movements, which are social movements with a clearer (special) focus,
such as the anti-abortion movement. Based on the dimension of the target of change (who is
changing) and the dimension of the amount (level) of change (how much change), social
movements can be grouped into four types. In addition, the following are some other social
class movements, namely:
a.
Alternative social movements.
b.
Movement social liberation (redemptive social movements.)
c.
Reformative social movements.
d.
Revolutionary social movements.
New social movement theory, new social movements are social movements that
emerge as a critique of previous old theories that have always existed in class ideological
discourse. New social movements are more issue-oriented movements and are not interested
in the idea of revolution, and the appearance of new social movements is more plural,
ranging from anti-racism, anti-nuclear movements, feminism, civil liberties and so on.
D.
Application of Social Class to Consumer Behavior
This theory draws on social psychological factors to explain why individuals engage
in social movements. This theory deals with terms such as: tension, stress, crowd (society,
mass), emotion, irrationality, emotional transfer, alienation, frustration and depression
(Klandermans in Manalu, 2009). This view believes that social movements occur as a side
effect of rapid social change. In this rapid change, collective action develops in various
forms of religious, secret and political groups. This is explained as follows: the
powerlessness of social control systems and mechanisms creates social cohesion, born as an
attempt by society to respond to crisis situations by building mutual trust as a new basis for
shared solidarity. This view does not use formal channels and sees social movements as
behavioral crises, frustrations that emerge in the form of voluntary and uncoordinated
collective actions. The main forms of movements are mass movements and simple social
movements.
CUSTOMER SATISFACTION AND COMPLAINTS:
A.
Producer and Consumer Interests
1. Definition of Manufacturer
Producers in consumer protection have their own term, the term has changed to
business actors, which is stated in Law Number 8 of 1999 concerning consumer protection
article 1 point (3) which states that: "A business actor is any individual or business entity,
whether in the form of a legal entity or not a legal entity established and domiciled or
conducting activities within the jurisdiction of the Republic of Indonesia, either alone or
jointly through an agreement, organizing business activities in various economic fields".
It can be explained that the business actors included in the Law are companies,
corporations, state-owned enterprises, farmers, and others. In addition, it can also be
explained that the definition of a business actor in Article 1 paragraph 3 of the Consumer
Protection Law is quite broad because it includes wholesalers, leasers, retailers, and others.
Under the Directive, the definition of "Producer", also known as a business actor,
includes:
a.
The party that produces the final product in the form of manufactured goods. They are
responsible for any losses arising from the goods they distribute to the public,
including when losses arise from defective goods that are components in the
production process.
b.
Manufacturer of raw materials or components of a product.
c.
Anyone who, by affixing a name, brand or other mark to a product, reveals himself as
the producer of a good/service.
Nasution stated that producers or business actors can be grouped into three, among
others:
a.
Provider of funds for the needs of the providers of goods and/or services.
b.
Producer or manufacturer of goods and/or services.
c.
Distributors of goods and/or services.
The definition of business actors is very broad, covering all forms of business, so it
will make it easier for consumers, in the sense that many parties can be sued, but it would be
better if the Consumer Protection Law (UUPK) provides details as in the directive, so that
consumers can more easily determine to whom to submit a claim if they are harmed by the
use of the product.
2. Producer Rights and Producer Obligations
a.
Producer Rights
In business actors have the right to conduct a business, which is regulated in article 6
of Law Number 8 of 1999, producers are referred to as the rights of business actors listed in
article 6 of the Law on consumer protection are:
1) The right to receive payment in accordance with the agreement regarding the conditions
and exchange rate of goods and/or services traded.
2) The right to legal protection from the actions of consumers who act in bad faith.
3) The right to conduct appropriate self-defense in the legal settlement of consumer
disputes.
4) The right to rehabilitation of good name if it is legally proven that consumer losses were
not caused by the goods and/or services traded.
5) Rights stipulated in other statutory provisions.
Based on the rights of business actors mentioned above, if we look at it, it is more
related to the government apparatus and/or the Consumer Dispute Settlement Body or the
court in its duty to resolve disputes. Through these producer rights, it is hoped that excessive
consumer protection that ignores the interests of business actors can be avoided. The only
thing that relates to the obligations of consumers to the rights of business actors mentioned
in numbers 2, 3, and 4 is the obligation of consumers to follow the dispute resolution efforts
as described earlier.
b.
Producer Obligations
The obligations of business actors listed in Article 7 of Law Number 8 of 1999
concerning Consumer Protection are:
1) Act in good faith in conducting its business activities.
2) Provide correct, clear, and honest information about the condition and guarantee of
goods and/or services as well as providing user explanations, repairs and maintenance.
3) Treat or serve consumers correctly and honestly and non-discriminately.
4) Guarantee the quality of goods and/or services produced and/or traded based on the
provisions of the applicable quality standards for goods and/or services.
5) Provide opportunities for consumers to test, and/or try certain goods and/or services
and provide guarantees and/or warranties for goods made and/or traded.
6) Provide compensation, compensation and/or reimbursement for losses due to the use,
consumption, and utilization of goods and/or services traded.
7) Provide compensation, compensation and/or replacement if the goods and/or services
received or utilized are not in accordance with the agreement.
c.
Producer Responsibility
According to Article 19 of Consumer Protection Law Number 8 Year 1999, business
actors have a responsibility. The responsibilities of business actors include:
1) Business actors are responsible for providing compensation for damage, pollution, and
/ or consumer losses due to consuming goods and/or services produced for trade.
2) Compensation as referred to in paragraph (1) may be in the form of a refund or
replacement of goods and/or services of a similar or equivalent value or health care
and/or compensation in accordance with the provisions of the applicable laws and
regulations.
3) Compensation is made within 7 (seven) days after the date of the transaction.
4) The provision of compensation as referred to in paragraph (1) and paragraph (2) does
not eliminate the possibility of criminal prosecution based on further proof of the
existence of an element of guilt.
5) The provisions as referred to in paragraph (1) and paragraph (2) shall not apply if the
business actor can prove that the fault is the fault of the consumer.
3. Consumer Definition
The definition of consumer contained in Article 1 point (2) of Law No. 8 of 1999
concerning Consumer Protection, that "Consumer is every person who uses goods and / or
services available in the community, both for their own interests, family, other people and
other living beings and not for trade".
From the definition of consumers above, we can put forward the elements of the
definition of consumers: (Celina, 2008, p. 27).
a.
Everyone
The subject referred to as a consumer means every person who has the status of a user
of goods and/or services. However, the term person can raise doubts, whether it is only an
individual person who is commonly called a nature like person or includes legal material
(rechtspersoon). Therefore, consumers must also include business materials with a broader
meaning than legal materials.
b.
User
In accordance with Article 1 paragraph (2) of the Consumer Protection Law, the word
"User" emphasizes that the consumer is the ultimate consumer. The term "User" in this case
is used for the formulation of these provisions or indicates that the goods and/or services
used are not necessarily the result of a sale and purchase transaction.
c.
Goods and/or services
In relation to the term goods and/or services, the word product is used as a substitute
for this termology, because currently "Product" has connotations as goods or services. The
Consumer Protection Law defines goods as any object, whether tangible or intangible, both
movable and immovable, both expendable and non-expendable, which can be traded, used,
utilized, or utilized by consumers.
d.
What is available in the community
The goods and/or services offered to the public must be available in the market (see
also the provisions of Article 9 paragraph (1) letter (e) of GCPL). In this increasingly
complex trade, this requirement is no longer demanded by the consumer community.
e.
For the benefit of oneself, family, other people, other living things
Consumer transactions are intended for the benefit of oneself, family, other people and
living things. This interest is not only intended for oneself and one's family, but also the
goods and/or services are intended for other people (outside oneself and one's family), even
for living things, such as animals and plants.
f.
Goods and/or services that are not for trading The notion of consumers in the GCPL Law is
emphasized, i.e. only the end consumer. This limitation can already be used in consumer
protection regulations in various countries.
Nasution (1995, p. 19) statedthat consumers can be grouped into two, namely: (1)
Users or users of goods and/or services with the aim of obtaining goods and/or services for
resale; (2) Users of goods and/or services to fulfill the needs of themselves, their families or
households.
4. Consumer Rights and Consumer Obligations
a.
Consumer Rights
There are generally four internationally recognized rights, namely:
1) The right to clear information.
2) The right to security.
3) The right to vote.
4) The right to be heard.
These four basic consumer rights are internationally recognized, in its development
consumer organizations incorporated in The International Organization of Consumer Union
(IOCU) added several more rights, including:
1) Right to consumer education.
2) Right to compensation.
3) The right to a good and healthy living environment.
Meanwhile, consumer rights as stated in Article 4 of Law No. 8 of 1999 concerning
Consumer Protection are as follows:
1) The right to comfort and safety in consuming goods and/or services.
2) The right to choose goods and/or services and to obtain such goods and/or services in
accordance with the exchange rate and the conditions and guarantees promised.
3) The right to correct, clear and honest information regarding the conditions and
guarantees of goods and/or services.
4) The right to have their opinions and complaints about the goods and/or services used
heard.
5) The right to obtain protection advocacy and efforts to resolve consumer protection
disputes properly.
6) The right to consumer education and guidance.
7) The right to be treated or paid fairly and honestly and without discrimination.
8) The right to obtain compensation and/or replacement, if the goods and/or services
received are not in accordance with the agreement or not as they should be.
9) Rights stipulated in other statutory provisions.
b.
Consumer Obligations
Rights of course cannot be separated from obligations, consumer obligations
according to Article 5 of Law Number 8 of 1999 concerning Consumer Protection, are:
1) Read or follow the information instructions and procedures for the use or utilization of
goods and/or services, for security and safety.
2) Good faith in conducting transactions to purchase goods and/or services.
3) Pay according to the agreed exchange rate.
4) Follow the efforts to properly resolve consumer protection disputes.
With the existence of laws that regulate the rights and obligations of business actors
and consumers, it is hoped that there will be a balance of interests between the two parties.
B.
Consumer and Safety Products
1. Consumer Protection
Consumer protection is all efforts that ensure legal certainty to provide protection to
consumers.
2. Legal Basis of Consumer Protection
In essence, there are two important legal instruments that form the basis of consumer
protection policy in Indonesia, namely:
a.
The 1945 Constitution, as the source of all sources of law in Indonesia, mandates that
national development aims to realize a just and prosperous society. The goal of national
development is realized through a system of democratic economic development so as to
grow and develop a world that produces goods and services that are suitable for
consumption by the community.
b.
Law No. 8 of 1999 on Consumer Protection (UUPK). The enactment of this Law provides
hope for the Indonesian people, to obtain protection for losses suffered from transactions of
goods and services. UUPK guarantees legal certainty for consumers.
3. Objectives of Consumer Protection
In accordance with Article (3) of the Consumer Protection Law, the objectives of
consumer protection are:
a.
Increase consumer awareness, ability and independence to protect themselves.
b.
Raising the dignity of consumers by preventing them from the negative excesses of using
goods and/or services.
c.
Increase consumer empowerment in choosing, determining and demanding their rights as
consumers.
d.
Create a consumer protection system that contains elements of legal certainty and
information disclosure and access to information.
e.
Raising awareness of business actors regarding the importance of consumer protection so
that grow an honest and responsible attitude in business.
f.
Improve the quality of goods and/or services that ensure the continuity of the business of
producing goods and/or services, health, comfort, security and safety of consumers.
4. Consumer Protection Principles
a.
The Benefit Principle mandates that all efforts in the implementation of consumer
protection must provide maximum benefits for the interests of consumers and business
actors as a whole.
b.
The principle of justice, the participation of all people can be realized to the fullest and
provide opportunities for consumers and business actors to obtain their rights and carry
out their obligations fairly.
c.
The Principle of Balance, provides a balance between the interests of consumers,
business actors and the government in a material or spiritual sense.
d.
The Principle of Consumer Safety and Security, provides a guarantee of security and
safety to consumers in the use, use and utilization of goods and / or services consumed or
used.
e.
The principle of Legal Certainty, both business actors and consumers obey the law and
obtain justice in organizing consumer protection, and the state guarantees legal
certainty.
5. Consumer Alert
a.
Be critical of advertisements and promotions and don't be easily persuaded.
b.
Research before you buy.
c.
Get into the habit of spending according to plan.
d.
Choosing quality and standard goods that meet the aspects of security, safety, comfort
and health.
e.
Purchase according to need and ability.
f.
Pay attention to the label, item description and expiration date.
In the era of globalization, business actors are able to produce goods and or services
that have high competitiveness and win competition both at home and abroad, but on the
other hand free trade tends to result in goods and or services in circulation that do not
necessarily guarantee the safety, security and health of consumers.
Problems regarding consumer protection in its development have not been resolved
but instead these problems are increasing. This can be caused by various factors, namely
external factors and internal factors. One of the external factors is the influence of
globalization, which causes consumers to be given many choices and business actors are
increasingly encouraged to be more efficient. Producing goods in accordance with the needs
and interests of the community but paying less attention to the quality of production
materials that can be accounted for, besides that, services to consumers are also not optimal,
while internal factors come from consumers themselves, namely the lack of knowledge
about the products to be consumed, especially food problems that are safe for consumption.
Consumers basically really want products that are safe for consumption, but not a few who
become victims due to the negligence of business actors in processing products, but there
are also business actors who deliberately make mistakes so that they can get a lot of profit.
Based on this, business actors must be responsible for all the mistakes they make, whether
due to negligence or deliberate mistakes that result in the loss of food consumers and
possibly even death.
C.
Harmful Business Practices Consumers
1. Business
The word "business" itself is taken from the English "business" which means business
activities, business is often defined as the overall business activities carried out by people or
entities on a regular and continuous basis, namely in the form of activities to procure goods
or services or facilities for sale, exchange or lease with the aim of making a profit
(Simatupang, 1996, p. 1).
Businesses can be categorized into three groups, namely:
a.
Business in the sense of trade activities (Commerce), namely all buying and selling activities
carried out by people and entities, both domestically and abroad or between countries for
profit. For example: manufacturers (factories), dealers, agents, wholesalers and so on.
b.
Business in the sense of industrial activity, namely the activity of producing or producing
goods whose value is more useful than their origin. For example: the plantation industry,
forestry, mining, manufacturing buildings, bridges, food factories, clothing and so on.
c.
Business in the sense of service activities (service), namely activities that provide services
performed by both people and entities. For example: hospitality services, consultants,
insurance, tourism, lawyers, accountants and so on.
2. Fraudulent Business Practices
a.
Scope of Fraudulent Business Practices
In the development of the economy and technology, the role of consumers has
increased so that the motto "Buyer is King" was born. However, especially for developing
countries such as Indonesia, we also see that, on the one hand, the number of consumers is
very large and their living needs are increasing, on the other hand, the level of consumers is
increasing income is still a stabilizer in price control. In general, these are passive
consumers, who just accept what is presented by producers. This attitude of acceptance also
occurs as a result of industrial development that affects the environment (Zulham, 2013, pp.
47-48). The poverty of consumer protection law and the low knowledge of most Indonesians
are obstacles for consumers to obtain adequate protection. Therefore, the best shortcut is that
consumers must protect themselves and this can be achieved if consumers are aware of their
rights.
UN Resolution 39/248 of 1985 on Guidelines for Consumer Protection describes the
weaknesses of consumers as a result of "imbalances in economic terms, educational levels
and gaining power". Because of these weaknesses, consumers are often at a disadvantage in
their relations with providers of goods or services. Points 14-19 of the UN Resolution
mention business practices that harm consumers, namely: (Widjaya, 2001, p. 28)
1) Actions that not comply with statutory provisions.
2) Trade practices that harm consumers.
3) Unclear producer liability.
4) Unfair competition results in narrowed consumer choices and lower prices.
5) Unavailability of spare parts and after-sales service.
6) Unilateral standardized contracts and removal of essential consumer rights.
7) Unfair credit terms.
b.
Characteristics of Fraudulent Business Practices and Their Legal Protection
1) Products that endanger one's health or life
The case of poisoned biscuits that occurred in Tangerang a few years ago can be
used as a concrete example. In that case, the biscuits sold contained poison, resulting in
the deaths of four children. In such cases, the facts are clear, that the death of the four
children was caused by eating biscuits that were declared to contain poison by laboratory
tests.
2) Misrepresentation of a product
Informative information on goods and services is correct and good information
about each product, both regarding origin, safety or quality standards, composition, value,
and quality. nutrition, size, measure, scale, general and/or technical conditions and so
forth. Producers are prohibited from making false and misleading statements about the
products they sell. The prohibition against dishonest practices mentioned above is
intended so that in conducting business activities entrepreneurs realize that the
management of economic activities is for the common good. The prohibition of dishonest
practices is also based on the fulfillment of one of the rights possessed by consumers,
namely the right to obtain correct information from producers. With this information,
consumers are expected to make choices in consuming goods or services with more
rational consideration. However, in reality, there are still many cases of providing
information or information that is not true.
3) Misleading advertisements
Two types of advertisements that can be categorized as harmful to consumers are
misleading and untrue. Misleading occurs when consumers are irrationally influenced by
the advertisement.
D.
Misleading Ads
1. Advertising
a.
Definition of Advertising
Advertising is one part of an advertising company in promoting the production of
producers to consumers.
Advertising can be defined as "any paid form of nonpersonal communication about an
organization, product, service or idea by an identified sponsor" (Raphl Alexander, 1965).
Advertising is a form of non-personal communication about an organization, product,
service or idea paid for by a known sponsor.
The Indonesian Advertising Company Association (PPPI) defines advertising as any
form of message about a product delivered through the media financed by a known initiator
and addressed to some or all of the public.
In general, advertising can be defined as a means of communication for marketing that
shows a product of goods or services produced by producers to inform about the products
sold and trusted by consumers.
b.
Types of Advertisements
1) National advertisements, are advertisements that are national in scope or part of a
country. Some Large national advertisements generally appear in prime time on
television or major national media as well as other media.
2) Local advertising, is advertising at the local level. Local advertising aims to encourage
consumers to shop at certain stores or use local services or visit a certain place or
institution.
3) Primary or selective advertising, is advertising that focuses on creating demand for a
particular brand.
4) Business-to-business advertising, is advertising targeted at one or more individuals
whose role is to influence the purchase of industrial goods and services for the benefit
of the companies in which these individuals work.
5) Professional advertisements, are advertisements that target professional workers such as
doctors, lawyers, dentists, engineers and so on.
6) Trade advertising, is advertising that targets members who manage marketing channels,
such as wholesalers, distributors and retailers (Morrisan, 2010, p. 21).
c.
Related Parties in Advertising
1) Advertising Company, an advertising company or advertising agency is a service
organization that specializes in planning and implementing advertising programs for clients,
This is a company that uses the services of an external advertising agency or company. The
staff of these advertising companies consists of artists, writers, media analysts, researchers
and other experts who have specialized skills, knowledge and experience that can help
clients market goods and services (Morrisan, 2010, pp. 146-147).
2) Advertisers, according to Indonesian Pariwara Ethics, advertisers are initiators, funders and
service users. The advertiser means the party who initiates the advertising company to
promote the product of his business by providing clear, correct and honest information from
the advertiser company.
3) Advertising Media, is a means of mass communication such as print media (newspapers,
magazines, tabloids), electronic media (television, radio and the internet) and there are also
other media, namely, banners, pamphlets, brochures and billboards. The forms of
advertising media are divided into three, namely:
a)
Broadcasting Media, advertisers must always consider what broadcasting media is most
appropriate for promoting a product (goods and services) (Morrisan, 2010, p. 236).
b)
Print Media, in media planning, magazines and newspapers have a position to play
different from broadcast media. This is because both print media allow advertisers to
present information in more detail or detail that can be processed according to the speed
of understanding of the reader (Morrisan, 2010, p. 281).
c)
Internet media, the Internet can be defined as a worldwide method for exchanging
information and communicating through interconnected computers. Companies build
and use websites or web sites with the aim of being nothing more than an electronic
catalog or brochure that can be accessed online which aims to provide information
(Morrisan, 2010, pp. 317-319).
4) Vendors, a group of service organizations that assist advertisers, advertising and media
companies. Often referred to as freelancers or consultants. Examples are scriptwriters and
graphic artists, photographers, songwriters and others.
5) Consumer, is every user and enjoyer of goods and services that have been advertised.
6) The government, is the watchdog for the operation of advertising rules.
d.
Advertising Code of Ethics
Business actors must provide and be responsible for correct, adequate and clear
information for the benefit of consumers in choosing goods, information that must be
notified to consumers, such as regarding price, quality and other information that can help
consumers in deciding to buy goods according to their needs and the quality of the goods.
Information responsibility in advertising is that offers made by business actors for
products in the form of movable and immovable goods must contain information that does
not cause misinterpretation regarding the condition of the goods and / or services. This has
been implied in the provisions of Article 7 letter (b) of Law Number 8 of 1999 concerning
Consumer Protection, namely "Provide correct, clear and honest information regarding the
condition and guarantee of goods and / or services and provide an explanation of use, repair
and maintenance".
Advertising business actors must refer to several general principles of the code of
ethics or advertising manners, namely as follows: (Simatupang, 2004)
1) Advertisements must be honest, responsible and not in conflict with applicable legal
provisions.
2) Advertisements must not offend and or demean the dignity, religion, morals, customs,
culture, ethnicity and class.
3) Advertising must be animated by the principle of fair competition.
2. Deceptive Advertising
a.
Definition of Misleading Advertising
The Big Indonesian Dictionary says that "Advertisement" means: (1). Ordered news
(to encourage, persuade) to the public about the goods and services offered; (2). Notification
to the public about goods or services being sold, posted in mass media such as newspapers
or magazines. Meanwhile, the word "Misleading" according to the Big Indonesian
Dictionary comes from the word "Sesat" which means "wrong way; not going the right
way", but if the word "misguided" is added with the prefix "me-" and the suffix "kan" then it
will turn into the word "misleading" which means "to bring to the wrong path; cause to go
astray. (wrong way)".
Misleading advertisement is a news order that encourages, persuades the public about
the goods or services being sold, posted in mass media such as newspapers or magazines,
but the content of the news presented is not known to be true.
b.
Criteria for Misleading Ads
The importance of clear and complete information is expected to protect consumers
from losses caused by advertisements that contain elements of misdirection and fraud. Some
forms of advertisements that contain elements of misdirection and deception include:
1) Bait and switch advertising, which can be categorized as bait and switch advertising, is
advertising that actually does not intend to sell the products offered, but is more aimed at
attracting consumer visits to the place of business. This type of advertisement offers certain
goods at special prices such as discounts or promises of gifts, even though the business does
not intend to do so or if it does so in an unreasonable amount, where consumers then find
the reality that does not match what has been promised regarding the advertised thing.
2) Misleading advertising (mock-up advertising), this ad classification is slightly different from
lure advertising. This type of advertisement usually only wants to show the efficacy of a
product through excessive depiction. Usually, such advertisements, using television media,
will produce impressive impressions. From the above phenomenon, it is clear that
information has been manipulated in such a way as to obscure the true meaning of the
information. (Simatupang, 2004, pp. 12-13)
Slightly different from the forms of advertising that have been stated above, Pradopo
argues that there are 3 (three) types of deceptive advertising, including:
1) Fraudulent advertising, advertising that cannot be trusted (straight forwardlie)
2) False advertising, claims to product benefits that can be fulfilled under certain
conditions that are not clearly explained in the advertisement.
3) Misleading advertising, this advertising involves claims and beliefs. In other words, an
advertisement that connects with consumers' beliefs. For example, consumers believe
that having white skin is part of beauty. This consumer belief is utilized by
manufacturers (business actors) of well-known skin whitening brands, which by using
their products, the skin will become white within 7 (seven) days.
The limitations of a misleading advertisement also implied in Article 17 paragraph (1)
of the Consumer Protection Law are:
1) Deceiving consumers regarding the quality, quantity, materials, usefulness and price of
goods and or service rates as well as the timeliness of receipt of goods and or services.
2) Misrepresenting the guarantee or warranty of goods and or services.
3) Containing false, incorrect or inaccurate information about goods and or services.
4) Does not contain information about the risks of using goods and or services.
5) Exploit events and or a person without the permission of the authorized person or the
consent of the person concerned.
6) Violating ethics and/or advertising laws and regulations.
In relation to misleading advertisements, the results of the research "Legal Studies on
Legal Aspects and Business Ethics of Advertising" conducted by the National Law
Development Agency found forms of advertisements that need to be highlighted which
include: (Nasution, 1993/1994, pp. 52-55)
1) Deceptive Pricing
By price misrepresentation, it is meant to convey a certain price level as if it were the
best (low) price for the consumer compared to the price of the same product from the same
business at the same time or compared to the prices of competing products. "Sale",
"Cheapest", "Buy a House Get a Parabola", and other similar statements in advertisements
are examples of phrases that can be misleading to consumers. The goal of such
advertisements is to give consumers the impression that there is a certain price level for the
goods or services offered. However, the advertiser does not state what the low price is
compared to. From the point of view of the interests of fellow entrepreneurs, this way of
offering can lead to unfair competition. The public also suffers from the negative impact of
this advertising practice, including the drugging of the public from one of the elements of
gambling, namely the hope of getting a lottery or prize. Unfortunately, to date there has
been no research on how many people actually received "Good Luck" compared to those
who participated in the "Raffle" as a whole and/or those who did not have good luck.
2) Deceptive Promotion
Misrepresentation in the promotion of goods or services is done by exaggerating the
quality, nature or ability of the goods or services. A product, misrepresenting it, playing up
the warranty terms of a product, luring consumers to visit a point of sale under attractive
conditions but then offering another product under other conditions. Some examples of
statements used include: "Number 1", "Prima", "Made from Natural Ingredients" (by
presenting certain vegetables and fruits), and other accompanying statements.
