Food and Drug Administration - Essay Example

Source: Associated Press (2009) – 400 words Summary Consumers have changed their spending habits which impacts the borrowing markets. The article offers that outstanding consumer debt has fallen by more than expected and consumers are not applying for credit cards as readily. Analysis This would be of interest to retail companies as it shows a sign that consumers intend to pay down debts rather than making personal purchases. This trend could be psychological in nature, dealing with concerns about short-term spending and the impact on their finances with broader macroeconomic issues. Because consumers are spending their resources on paying down their personal debt, this does not leave as much disposable income to buy merchandise. The article offers that “retailers already are bracing for another meager holiday season” (Rugaber, 1). At the microeconomic level, less demand for credit can impact the retail industry significantly if there are wide scale changes in consumer behavior and attitude toward retail spending. Some consumers may be considering that the cost of a car would be too significant on their personal budgets and would rather keep their creditworthiness by paying down debt. Consumer attitudes might also be focused around small scale items, as cost savings, such as reducing grocery store volume per trip or changing their favorite brands. The article offers that jobs are scarce currently which also changes the mindset of buyers, giving them more incentive to cut back on personal spending in the retail environment. The National Retail Federation believes that the retail holiday season will see a one percent drop in sales this year, due to consumers reducing their spending and their need for credit. Opinion Speaking strictly from the microeconomics level, this makes sense how one aspect of consumer attitude can strongly impact the strength of a specific industry, such as retail. It would seem that the real question which should be asked is whether consumers would be cutting back on large purchases or small purchases and in what specific retail segment. Is it scattered throughout retail or does this concern only deal with high dollar purchases? Microeconomics has taught the importance of conducting research and gaining demographic information in order to support local business success and profitability. Consumer attitudes changing to reflect a new attitude regarding spending and credit is a microeconomic issue with potential real-life problems for certain retail marketplaces. It would be very important to conduct consumer research to find out why. Source: World Net Daily, Morning Edition. (2007) – 400 words Summary The new light bulbs designed to save energy and reduce waste have created a new situation where consumers are concerned with hazards to their health. A situation is described in which a bulb broke, releasing mercury into a girl’s bedroom, causing a $2,000 cleanup cost from hazardous materials specialists. Analysis The light bulb marketplace and retailers are concerned about the impact of consumers demanding more safety protocols regarding new fluorescent lamps which use mercury as a catalyst. They are worried that their health could be at risk because there is not enough emphasis on warning labels on packaging which are being criticized as deemphasizing the problem. One consumer, not knowing of the danger after a bulb broke in her house, vacuumed up the mess believing she had taken care of the problem and gave it no further thought. However, after reading up on the potential mercury danger posed by these new bulbs, she realized she had inadvertently spread mercury dust throughout the house. This is angering consumers: “I was horrified. I went through every place upstairs and took out every bulb” (Farah, 1). This consumer was so nervous about the potential mercury problems that it led her to reconsider future purchases of these bulbs until safety information is provided or they are given more information about the potential health risks. Likely, this will impact the sales of these light bulbs if consumers, at the microeconomic level, change their buying attitudes. Though certain organizations are attempting to combat the problem in terms of waste and environmentalism, buyers are still skeptical. Opinion Product manufacturers have what is known as a bill of materials which shows the materials needed to build a product. Part of this information generally includes an assessment of hazard potential with any kind of metal or chemical used in producing light bulbs or any other product. If mercury poses a threat to human safety, then consumers should be putting pressure on the industry to provide better safety instructions. These new lights bulbs are much more expensive than traditional bulbs which also likely makes the buyers frustrated since they have perceived health consequences along with a higher price tag. Any business which carries these products should be concerned about how consumers will perceive their role in the potential health hazard and change their attitude about shopping there. Source: U.S. News & World Report. (2009) – 400 words Summary There has been an outbreak of salmonella which is being linked to peanuts and affects products such as peanut butter cookies, sandwich crackers, and even ice cream. The efforts of the U.S. Food and Drug Administration has caused grocers to recall many peanut butter products. Analysis As of the publishing date of the article, there were six deaths and 470 sickened citizens in the U.S. and Canada which were linked with salmonella and certain peanut butter products. In a difficult economy, retailers are struggling to compete in this sector and cannot afford the negative publicity associated with recalls when they are trying to gain consumer business. Two years prior, ConAgra had a massive recall of peanut butter products under the Peter Pan brand name which was linked to a much higher number of cases where consumers were sickened by salmonella. Buyers already had exposure to bad publicity about the peanut butter products and to have a secondary one occur puts more products at risk when buyers become worried about the long-term health value of peanut butter. This has caused companies like ConAgra to offer the public press releases which indicate that its products are not risky, just to get buyers to return to the Peter Pan brand. The salmonella situation even caused ConAgra to shift supplier for its peanut paste, used in many products, therefore changing this specific industry at the microeconomic level. Famous names such as Wal-Mart, Little Debbie, and Keebler were some of the business names linked with the peanut butter recalls. This could impact business sales volumes if consumers look to these companies negatively. Opinion It is interesting that the Food and Drug Administration was unable to properly contain the problem the first time around, therefore allowing for a second outbreak of salmonella to occur in such a very short period of time. At a time where buyer behaviors are frequently changing and they are concerned about spending and credit, having bad publicity is not going to be good for the business. Microeconomics has taught the interdependencies of seemingly unrelated events and links them in a way which measures the overall strength of a business. The peanut butter industry, and those which use sell their finished products, should be very concerned about issues of reputation on the buyer marketplace, especially in a volatile micro-level business environment. References Farah, Joseph. “Consumers in dark over risks of new light bulbs. Push for energy-saving fluorescents ignores mercury disposal hazards”, 2007. http://www.wnd.com/news/article.asp?ARTICLE_ID=55213 Reinberg, Steven. “Peanut butter product recalls mount. More companies pull products from shelves as FDA advises consumers not to eat anything but jars of peanut butter while salmonella probe continues”. U.S. News & World Report, 2009. http://health.usnews.com/articles/health/healthday/2009/01/19/peanut-butter-product-recalls-mount.html Rugaber, Christopher S. “Consumers cut borrowing by $12B in August”, 2009. http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/10/07/national/w120730D05.DTL&tsp=1 Read More