The Role of Regulators in Providing Regulations for Effective Alcohol Marketing Across United Kingdom - Research Paper Example

The role of regulators in providing regulations for effective alcohol marketing across United Kingdom College Identification of purpose Regulation is set rules that are aimed at conducting and controlling the people to whom they are set for. Marketing of any product contains a lot of regulations. This essay identifies some of the theories of regulations by Baldwin et al (2012) and how they affect the marketing industry specifically the beer marketing industry in the United Kingdom. This essay is therefore investigating the role of regulators and regulations in the marketing of alcohol in the UK. It is very relevant in determining the importance of regulations in a particular industry. Introduction Regulations are usually made by various regulators and their main aim is to ensure that the products that get into the market are of high quality and that the consumers are not exploited at all. The main role of regulators therefore is to ensure quality and efficiency on the side of the consumer. For example, consider a place that has one beer company which is supposed to meet the demand of a certain targeted market. Since there is o competition based on this kind of monopoly, there is little that the consumer can do to ensure that quality and that they are exploited. The producer can decide to make low quality beer and since the consumer has no other option he will be forced to buy it. Or the producer can decide to exaggerate the price so that they can make more profit. With good regulations, all these can be managed and the consumer can be confident to have both quality and good pricing for the products that they are taking. There are a lot of regulations that are present in the marketing of beer in the UK. These regulations are very important and a look at the role of the people behind these regulations is very important (Gunter, 2007). Types of regulations and their example in the beer marketing industry The three main types of regulations present in (Baldwin et al, 2012), is present in UK beer marketing industry. Self regulations, a type of regulation that is done by an organization itself internally without involving any outside help, can be seen from almost all the beer industries in the market. For example acorn Brewery decided that the best way to market themselves was through self regulations. During this period, the company decided to make the top quality beer that will impress more and more people. A change in beer bottle is also important, a change is always better and this is why after a period of time, the company always ensures that they change the beer bottles to something that is completely new. With these regulations, the company will not only improve in sales rather they will also ensure that the consumer gets the best quality beer. Self regulations are seen everywhere and sometime it appears as the trademark of a specific company (Baldwin ET all, 2012). There are also a lot of benefits that the company gets with self regulatory as opposed to other methods of regulations. First is the improvement in expertise. When companies improve in quality, due to their own regulations, then the staffs who works for them has a very high capability of attaining a high level of expertise in that particular field. For example Adams beer industry is well known for the high quality expertise in the marketing field due to the strict marketing rules that exists within the industry (Baldwin ET all, 2012). This therefore helps the company in always being ahead of its top competitors in the market. Efficiency is another important goals achieved by self regulations. Self regulations always ensure that the best is given out and this best is what brings back more customers. Another commonly used regulation is the Meta regulations. This is usually enforced by the entire industry or by government agencies to ensure that the consumer gets the best product. In the beer industries and sometime extending into the cigarette industries, these regulations are sometimes put in place to ensure that the life of the consumer is protected and that the customer knows exactly what they are getting into. Imagine a situation where no regulations existed by any external organization concerning beer marketing. Then industries would do just anything to sell their beer including lying to the consumer about the dangers of their product. In the end many consumers would end up with various health and addiction issues without noticing what caused it. It is for this reason that various agencies put rules and regulations that controls the way that beer is marketed in the UK. When this is done, then he consumer is held responsible for all damage that might be caused by the products that are sold to them (Baldwin ET all, 2012). The regulators have regulations that beer sold in the UK has to have a warning on every advertisement as well as the beer bottle informing the consumer of the various dangers of drinking. With this, every individual can see the dangers and get into the drinking habit only after accepting the damages that might come with it. In 2005 after a series of accidents caused by driving after heavy drinking (Gunter, 2007), the government beer regulators came up with regulations that insist that after every advert, the producer has to warn the consumer of the dangers of driving when drunk. This ensures responsibility in the part of the producer on their customers. It shows that the producer has some responsibility over the life of not only the customer but also the entire innocent life that he would have to take in case they cause an accident. These regulations are therefore important to ensure safety of not only the drinker but also the people around them. In case the producer does not include these details in the advertisement, then they face the law and can sometime be charged large fines or even the withdrawal of their license with which they cannot function without. The number of advertisements that a particular producer can give on a certain beer product is also limited according to these regulation. This in turn ensures that the producer does not spend a lot of time advertising their products to the extent of making one make an ill decision yet alcohol is considered addictive and the producer has to ensure responsibility in the marketing of their products (Baldwin ET all, 2012). Role of the office of fair trading The office of fair trading has a major role of ensuring that an agreement among competitors that does not support competition during marketing of any alcoholic drink is done away with. For example competitors may decide to honor boundaries hence causing monopoly in each geographic position they withhold. Such agreements are to be done away with by the office of fair trading. In case there is an abuse of a dominant position, they have to come in and intervene. Selling of alcohol to underage is also a responsibility that they have to monitor and ensure that it does not happen. Importance of regulation There are countless reasons why regulations are necessary in any industry especially the marketing industry. However there are some major big reasons that affect each and every industry and which are key reasons as to why regulations are necessary. Without regulations then all these problems would be affecting most industries. Most of the below reasons are almost everywhere in the marketing of beer. It is therefore more than necessary that the UK regulators ensure strict regulations in order to avoid the above problems (Chen, 2005). Market failure One of the market failures includes monopoly. This is a situation where one seller produces specific goods for a particular market. The result is a market failure with no competition and without any regulations; the seller can get in to really exploit the consumer. To avoid all these, regulations are really necessary. Most monopolistic firms are usually craving for extra profit and due to lack of competition; they either raise their profits so high or make low quality products that will fetch them a lot of profit. In the event of a monopolistic situation, the regulators always come in to ensure that they make regulations that are mindful of the consumer. In the past ten decades the alcohol industry has never had any monopoly. However, if such occurs then the regulations that are in place about the price controls, and all the necessary conditions that are required during marketing of the products. This will ensure that there is responsible marketing of alcohol without risking the lives of the consumer for profit. Another market failure that exists according to Baldwin et al (2012) is windfall profits. This is always experienced in the beer industry especially during holidays and special occasions when many people look around for alcohol. In such a case, the policy that exists protects the consumer from paying more. All the prices are standardized and they are not expected to suddenly rise unless there is a significant reason to. Regulations therefore ensure that people do not suffer from the greedy producers who would like to make more money during the festive seasons. Externalities are also important. While marketing alcohol, there are many externalities that come out. From the UK regulations, all the companies have to ensure that they clean up all the externalities and more so protect the environment. For example, it is the responsibilities of the beer company to ensure that the beer bottles of their beers does not pollute the environment. Posters used for advertising are also to be properly disposed. If this is not done so then they risk losing their license. Therefore all the externalities coming from the advertisement of any alcoholic drink has to be covered by the producer themselves. Information inadequacy is also another market failure that is controlled by the regulators. In an event of a competition, some producers may not provide the consumer with all the necessary information that is necessary for the comparison with other products. In this case, regulators have strict regulations that inform the consumer of all the information needed for alcohol selection. For example, it is mandatory that each and every alcohol producing company in the UK has to indicate the alcohol content of that particular alcohol that is on sale. This is necessary for the customer to have all the information necessary to make important judgments like the amount of alcohol to take and the risks. This regulation therefore ensures that things are done in the light without hiding some characteristics. However some producers are known to go behind providing wrong information but if found, they face high fines or risk losing their license due to their incompetence. Anti competition behavior and predatory pricing is a common practice in the alcohol industry in the UK. It is common practice to see an alcohol drink go so low in its prices that the competitors cannot do with it and hence quit. When this is done, the consumer might be in for a surprise when all the other competitors are out of the market. Once this is so, the producer adds a lot of profit to cover for all the loss it went through. To avoid this, there are regulations that limit the prices of each product that a producer can have. This regulation is there to ensure that the consumer is not exposed to any form of exploitation in later years. This is also controlled by the regulations that limit the number of adverts used in an alcoholic drink (Miracle ET all, 2001). In many instances in the alcohol industry, there are cases of unequal bargaining power. This is mostly seen among companies that have been in the market over a long period of time as opposed to new ones. To protect all companies, there are regulations set by alcohol marketing regulators on the type of advertisement that every company can have. This is useful in ensuring that there is equality for every company regarding the marketing of their product. Workers also need to be informed about their pay and that the pay scale available in the market. With this, all marketers have the chance to compare their salary with that of others and to know if they are in the same scale (Pennock, 2007). Proper planning is also ensured by the regulations. Without any regulations on planning, the whole alcohol industry would be a mess and not just its marketing department. So regulations are always in place to ensure that each company plans for the way that it markets its product. There has to be a plan to ensure that there is no clash. For example, each company has to inform the authorities of any major campaign that is to take place at least one week in time to ensure that there is no collation and the authorities know of the event so that they can ensure safety and security. Any violation off this regulation can lead to the cancellation of the whole event and a fine on the company. The company has to ensure that every marketing personnel who is out for any promotion has an ID, to let people know that he is an official and not a conman out to con people of their money. This is necessary for employee safety and protection (Peterson, 2009). Good regulations and examples in the alcohol marketing industry The criteria used to decide on good and bad regulations are a key to deciding what good regulations are. Depending on the criteria, all regulations can either be good or bad. It is therefore the role of regulators to ensure that each criterion is relevant to the given type of regulations. Some economists argue that a good regulation maximizes wealth Baldwin et al (2012). However this is not always the case since the maximization of wealth is not a guarantee to an ethically strong regulation. It is for this reason that Baldwin et al (2012) comes up with five major criteria for choosing a good regulation. These criteria does not have profit maximization and wealth creation as the main point of reference rather various economic criterions for ensuring that a good regulation is found. Most of the UK regulations on alcohol marketing covered by the alcohol act contains almost all of the below criteria. It is therefore considered that the regulations are of standard since none of them can move without parliament approval (Barnes, 2005). Support of the legislative mandate This criterion supports that every regulation has to be supported by the legislative council of a country, to ensure that the parliament supports it. By so doing, the regulation will have the support of the people since the legislative council represents the people as they are voted in by the people. This also ensures that the regulations are able to achieve the given mandates that they are set for (Bench, 2009). Accountability Regulators are accountable for coming up with regulations that will make every mistake be accounted for by the person or company that cause it. This will also include the regulators themselves. So a good regulation has to ensure accountability. For example, the alcohol industry has regulations that ensure that each and every person and organization be held accountable for any damage caused to the environment during any marketing program. Another case of accountability among the alcohol producers during the marketing of their products is to ensure that alcohol is not sold to minors. This is why they have to state in every advert that alcohol is not for sale to underage. Due process This ensures that the regulators has to pay attention to equality during the process of coming up with new regulations. The regulation is necessary to determine the kind of qualifications needed for the market. These fair rules are very important in the market and ensure that the consumer not only gets the best quality products, but the producer is fairly treated. An example is the regulation in the beer advertising industry that ensures that all the adverts are limited to a specified number of times. A regulation that ensures quality is also a one of such good regulation. Expertise The use of expertise to judge a good regulation is necessary. However, to ensure this, it is necessary that for a team of regulators, one of them has to be an expert in that particular field. This ensures that not only does the regulation receive public support but it is also beneficial to the market. Expertise advice is therefore a key step to ensuring that a regulation is good (Kaptan, 2003). Efficiency This may seem to be the most important criteria for choosing a good regulation. Every good regulation has to ensure that efficiency is met. To be efficient, the regulations have to ensure that new technology and expertise are involved in every step. For example, in the event of ensuring that there is proper alcohol marketing, the internet which is the latest marketing place is not left out. This ensures that regulations cover every point that is necessary for the marketing (Kaptan, 2003). The role of the five above criteria is to ensure that all the standards are met when setting a good regulation. Without these criteria, it would be common practice to set regulations that will either be hard on the consumer or the producer. To create fairness and balance, these regulations are necessary (Usachan, 2008). Conclusion and recommendations In conclusion, it is evident from the above literature that regulations are set to ensure quality and consumer satisfaction. However, the producer is not left behind and by this; the regulation also ensures that the producer has the chance to make enough wealth. Regulators have the role of ensuring that all these are met. In the marketing of alcohol, the UK regulators are much keener since alcohol is a very delicate product. They have to ensure that there is proper and responsible drinking as well as drinking to the right age group. It is for this reason that the regulators are very strict to the marketing rules of the alcoholic products (Ganztzias, 2005). This ensures that every alcohol producer is responsible for the actions of the product on the life of the consumer. Regulations are therefore the best way to ensure responsibility, and proper marketing of the alcoholic products. However, the UK legislator is also keen on this issue due to the investments that is contained in this industry. It is for this reason that they make strict rules to also protect each and every company from others and ensure that competition is fair at all levels. The best recommendation that I can make is the involvement of the consumer during the making of the regulations. I have noticed that from almost all the literature covered here, most of the concern was based on the consumer without even involving their opinions on these issues. To ensure that there is fairness in all sides, they too should be involved in coming up with important regulations that affect them. Bibliography BALDWIN, R., CAVE, M., & LODGE, M. 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