Warranty and Complaint Policies: An Opportunity for Marketing Management

A DECADE of consumerism has substantially redefined the relationship of buyer and seller in the marketplace. Consumer activism, legislation, and heightened consumer expectations have placed more responsibility on the manufacturer for the performance of his goods, with a corresponding increase in the rights of the consumer. Direct complaints to manufacturers from the better-educated, increasingly affluent and aware consumer have burgeoned in this new climate. Although business appears to be doing a much better job in dealing with irate consumers, expectations have apparently outstripped this improvement. Federal Trade Commissioner Engman recently summed up the situation by saying: The simple fact is that for vast and increasing numbers of consumers with valid complaints, there is nothing to be done . .. other than kick the dog, yell at his children, and curse at his wife.' In this article the authors focus on an area that has received relatively little attention in the ongoing furor of consumerism: warranty and complaint policies and practices of consumer packaged goods manufacturers (CPGMs). Although attacked by consumer activists on several fronts-unit pricing, informational labeling, package standardization, and the like-CPGMs have generally maintained a low profile in an area of business practice that has been a major issue for other types of manufacturers. Studies by the authors and others show that CPGM response to overt consumer dissatisfaction is generally good, but that many CPGMs choose to ignore-or do not fully appreciate-the magnitude of customer dissatisfaction with their products, and have not formulated adequate policies and procedures to deal with it.2 Furthermore, some opportunities inherent in offering guarantees and responding to complaints have not been fully explored. In the following pages, the authors: