The Political and Legal Environment of Marketing

Lesson Transcript
Instructor: Jennifer Lombardo

Jennifer Lombardo received both her undergraduate degree and MBA in marketing from Rowan University. She spent ten years in consumer marketing for companies such as Nielsen Marketing Research, The Dial Corporation and Mattel Toys. She is currently an adjunct professor of marketing at Rowan University and a social media marketing consultant.

The marketing industry operates in a political and legal environment. Learn about the federal legislation, regulatory agencies, and state laws that affect business operations, including marketing. Explore the functions of the Consumer Product Safety Commission, the Federal Trade Commission, and the Food and Drug Administration. Updated: 08/19/2021

Breaking the Law

Detective Lombardo has been called to an emergency town meeting! He is needed ASAP to educate businesses on the political and legal environment of marketing. Why? It seems like many local places are not informed and are running into trouble with the law!

One local company just had their magnetic toy product recalled by a large agency. This recall was the result of kids being injured. The company now has to handle the logistics of the recall and very poor public relations.

Why Are Laws Needed?

Why are laws needed? Detective Lombardo's first task of the meeting was to explain to the business owners that laws are important for protection and growth. Governmental laws protect businesses' interests and they can also protect one business from another business. Most importantly, laws help protect consumers. Marketing managers must be aware of the laws in order to successfully and legally execute the marketing mix. There are three main areas that Detective Lombardo will cover tonight to make sure that all of the businesses in town stay out of trouble with the law.

Federal Legislation

Detective Lombardo introduced major federal laws that can affect the marketing decisions of a company. The first law he discussed was the Sherman Act of 1890. This act makes monopolies or attempts to monopolize illegal, and it ensures fair competition. The next law is the Robinson-Patman Act of 1936, and this makes it illegal to offer different prices to different buyers of merchandise of like grade and quality. The Federal Trade Commission Act of 1914, the Hart-Scott-Rodino Act and the Celler-Kefauver Antimerger Act of 1950 all were passed to regulate the competitive environment. These acts give the federal government more power to approve corporate mergers and maintain the correct competitive business balance.

Recent CPSC recalls include hazardous humidifiers, toys, and bunk beds.
Consumer Product Safety Commission Recalls

State Laws

Detective Lombardo also insisted that the community investigate state laws. Each state has different laws for companies to follow. For example, in California, the state has passed laws to lower energy consumption on an assortment of appliances. It is important to keep updated on state government changes within the state the business is located.

Regulatory Agencies

Detective Lombardo then introduced the regulatory agencies. These agencies are known to pursue businesses that violate regulatory laws. He spent the most time briefing the marketing managers about three specific agencies.

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