Marketing Strategy And Lease Arrangement: Obligations Under Australian Consumer Law
Target Market in the Advertisement
1. Group or Groups Are Targeted In the Advertisement
The consumer market targeted in the commercial is the young people resigning in South Australia. They are the self-dependent, unmarried and college educated city dwellers who are between the age of 20 and 35. They live in rented apartments and have jobs in social service or creative fields.
Youth is selected as the target market as they are more inclined towards environmental issues. They are highly educated and aware of the rights of animals. Also, they are less price sensitive as compared to others as they are willing to spend more on the products which they value the most and companies which they support.
2. Are they likely to believe the claims? Why or why not?
The youth will consider the declaration which says that the vegan hair dye is only made of beet juice and it has been sold at a reduced price of $5.00 for a limited period. They would be prompted to purchase the product by viewing at it’s the features and the reduced price. Researches show that eight out of ten people only read the taglines or headlines of the products without viewing its actual contents (Asrar, Hussain and Ahmed, 2017).
3. Description of the conduct of the South Australian Consumer Law
As per the Commonwealth of Australia (2010) the code of conduct is formulated by the Australian Consumer Law (ACL) which is consumer law applicable to each territory and state of the country. It comprises of the code of conduct regarding the fulfillment of the guarantees given to the consumers regarding the problems faced by the consumers with the goods or services and refunds.
It also covers the provisions regarding the safety of the products and displaying the safety warning notices and the essential requirements of reporting. The unfair business practices comprising of misleading or deceptive conduct and representations and unfair contract terms are also assimilated in the code of conduct.
Conduct comprises of advertisements, quotations, promotions and statements made by a person who conducts the business. While deciding whether the conduct is misleading or deceptive, it is to be discovered that the overall impression which is created by the conduct is inappropriate or false.
4. Is it likely to mislead? Why or why not?
The consumers are likely to be misled as firstly, the product is made up of only 10 % of the beet juice and other natural products and to ensure that the color is retained, 30% is made up of artificial chemicals. Secondly, at the promotion event, only 3 chairs are there in the salon while the number of participants is 200. So, only 3 of them would be able to experience the quality of the product while others would just be misled by viewing the label of the products which says that the hair dye is made up of our totally organic ‘vegan’ product (Barve et al.,2015).
Likelihood of Consumers Believing the Claims
5. Relevant Law and Case Law That May Be Applied on the case study
As per Legal Service Commission of Australia (2013) the Australian Consumer Law [Competition and Consumer Act 2010 (C th) Schedule 2s 18] restricts the conduct which is ambiguous and deceiving or is intended to do that. For the purpose of analyzing if the conduct is misleading, the courts have assessed that the proof of intent to deceive is not needed and to establish the actual deception is not necessitated. The main factor is the capability or propensity to mislead the consumers.
As it was held in ACCC v Reckitt Benckiser (Australia) Pty Ltd, it was held that a person must not involve in misleading and deceptive conduct in trade and commerce (Bowlt Commercial Lawyers Pty Ltd, 2018).
6. Government Authority Regulating the Conduct and advice provided by them
The Australian Competition and Consumer Commission (ACCC) is a constitutional authority which administers the Competition and Consumer Act 2010 along with a variety of additional provisions thereby promoting competition, fair trading and administrating the national infrastructure for the benefit of the citizens of Australia.
Its role is to enhance the prosperity and wellbeing of the consumers of Australia. It safeguards, empowers and supplements the way in which competition works in the markets of Australia and contribute to increasing the efficiency of the markets of Australia. The Competition Commission advice the businessmen to be honest and comply with the regulations of competition, fair trading and to avoid deceptive and misleading promotions of their products.
1. Relevant Legislation in South Australia
The lease arrangements in South Australia are regulated by the Retail and Commercial Leases Act 1995. It applies to the retail shops. A written lease agreement must comprise of the name and address of the landlord. It should be signed by both the parties i.e. tenant and landlord. The names of all the lessees must also be mentioned in the agreement. The address of the premises and the amount of rent to be paid should also be written in the agreement.
The duration of the lease agreement and the party who shall pay for the expenses of water and electricity shall be clearly mentioned in the agreement. If anything is excluded from the agreement, it shall also be mentioned in it. Any other additional regulations about the payment or lease shall also be included in the agreement. Lastly, the date of its applicability and preparation should also be mentioned with the signatures of both the parties (Government of South Australia, 2017).
Conduct of the South Australian Consumer Law
2. Three Express Terms That Would Be Included In This Lease Agreement
- The amount of rent payable, how often it is to be paid and the method of payment must be specifically mentioned in the agreement. If the amount of rent exceeds $400000 per annum on a retail shop then there is no applicability of the act per Section 4(2)(a) of Retail and Commercial Leases Act 1995.
- The agreement regarding the responsibility to pay for the rates and expenses of water supply shall be mentioned in the agreement. The lessee shall be liable to pay the charges related to water and sewage (South Australia: Retail and Commercial Leases Regulations 2010, 2011).
- The third term would be the responsibility for insurance of the premises and the contents. In this case, the responsibility would be upon the lessee to pay for all these expenses.
3. Legislation about Rent Increases
As per Mark Sallies and Crawford Legal (2012), the lessor must not change the base rent for the period of 12 months after the lease is entered into. If there is an increase in the rent during the last 12 months, then the base rent may not be increased in that particular period. However, it does not prevent the lessor to increase the rent up to the current market rent by $100 every 6 months.
At least two years have elapsed if the rent under the security bond has been increased. In that case , the lessor is required to write a notice to the lessee for the increase of the amount. The amount can be increased but it should not be exceeded for more than four weeks rent under the agreement.
4. Expenses and outgoings payable by a lessee and his accountability for their payment
The major expense payable by a lessee is those in association with preparation, registration and stamping of the lease of the retail shop which is called the preparatory costs. However, the lessee is not liable to pay the amount unless he is provided with a copy of the account which is given to the lessor for incurring the expenses.
It also comprises of the fees which are charged by a mortgagee for showing the certificate of title for the building over which the salon is to be registered or for agreeing for the lease. The amount paid to the lawyer of the lessor shall also be reimbursed from the lessee. The liability of the lessee shall not in excess to one half of the other preparatory costs and the actual amount of stamp duty and fees payable for registering the lease (South Australian Small Business Commissioner, 2018).
5. The responsibility of a landlord for the repairs
The landlord is accountable for repairs of the major wear and tear of the building including the roof and the building systems which are contained in the common areas used by both the lessee and the landlord. Though these are not mentioned in the lease agreement the landlord is liable for their repairing and maintenance (Focus Legal, 2017).
6. The responsibility of a tenant for the repairs
With regards to the commercial leases, the tenant is accountable for the maintenance of the rented premises comprising of walls, fixtures and floors which the landlord requires the tenant to maintain and repair throughout the term of the lease.
However, the provisions regarding the repair and maintenance of furniture, plant and equipment, refrigerator and air conditioners which are used by the tenant in the routine life should be specifically provided in the lease agreement (Moss, 2016).
References
Asrar, Z., Hussain, M. and Ahmed, S.(2017) Effect of TV Commercials on Youth Consumer Behavior. Advances in Social Sciences Research Journal, 4(20).pp. 50-57.
Barve, G., Sood, A., Nithya, S. and Virmani, T.( 2015) Effects of advertising on youth (age group of 13-19 years age). J Mass Communicat Journalism. 5(260), p.2.
Bowlt Commercial Lawyers Pty Ltd(2018). A “Painful” Case of Misleading or Deceptive Conduct [online] Available from: https://www.bowltlawyers.com.au/news/a-quotpainfulquot-case-of-misleading-or-deceptive-conduct_111s32 [Accessed 30th July, 2018].
Commonwealth of Australia (2010) Compliance and enforcement :How regulators enforce the Australian Consumer Law [online] Available from: https://consumerlaw.gov.au/files/2015/06/compliance_enforcement_guide.pdf [Accessed 30th July, 2018].
Focus Legal(2017) Commercial leases – Responsibility for repairs and maintenance [online] Available from: https://www.focuslegal.com.au/lawyer-chatswood/commercial-leases-responsibility-for-repairs-and-maintenance [Accessed 31st July, 2018].
Government of South Australia (2017) Lease agreements explained[online] Available from: https://www.sa.gov.au/topics/housing/renting-and-letting/renting-privately/lease-agreements-explained [Accessed 30th July, 2018].
Legal Service Commission of Australia (2013). Misleading or deceptive conduct. [online] Available from: https://www.lawhandbook.sa.gov.au/ch10s03s03s01.php [Accessed 30th July, 2018].
Mark Sallies and Crawford Legal(2012) Tenant’s Rights In The Retail And Commercial Leases Act (S.A.) – Part 1 [online] Available from: https://www.crawfordlegal.com.au/files/COM005.pdf [Accessed 30th July, 2018].
Moss, A.(2016) A Review of the Retail and Commercial Leases Act 1995 (SA) [online] Available from: https://www.lga.sa.gov.au/webdata/resources/files/A%20Review%20of%20the%20Retail%20and%20Commercial%20Leases%20Act.pdf [Accessed 31st July, 2018].
Pride, W.M. and Ferrell, O.C.(2015) Marketing 2016. Cengage Learning.
South Australia :Retail and Commercial Leases Regulations 2010(2011) Contents [online] Available from: https://www.legislation.sa.gov.au/LZ/C/R/RETAIL%20AND%20COMMERCIAL%20LEASES%20REGULATIONS%202010/CURRENT/2010.199.UN.PDF [Accessed 30th July, 2018].
South Australian Small Business Commissioner(2018) Leasing Business Premises online] Available from: https://www.sasbc.sa.gov.au/retail_leasing/leasing_business_premises [Accessed 31st July, 2018].