Warner-Lambert case study, business and finance homework help

Please replied to my classmates posts: for example give your opinion hi nice post ….

post 1 Chara wrote this;

Identify, compare and contrast the facts in Warner-Lambert and the case you identified

In the Warner-Lambert case the company claimed that its Listerine Anti-Septic Mouthwash was able to prevent and cure sore throats and colds. The company was unable to provide sufficient evidence or proof that the Listerine product provided more than fresh breathe even though they managed to falsely market the product as such.

A class action lawsuit was opened against Verizon Wireless in 2015. The Federal Communications Commission and the State Attorneys General and Verizon Wireless agreed to a refund program for current and former Verizon Wireless account holders due to unauthorized and previously unfunded commercial Premium Short Messaging Service charges that were created by third-parties. The charges appeared on account holders telephone bills through text message content such as sports and entertainment services. Even though Verizon Wireless stopped offering its commercial Premium SMS program in 2014, the class action lawsuit was enforced. Verizon Wireless customers, including myself received a credit adjustment on their February or March 2016 bill if they submitted a class action claim by December 31, 2015.

Both cases are similar in comparison because both companies deceived the consumer in order to make a profit by concealing or hiding the true facts about their product and services.

Is either company guilty of fraud?

Both companies are guilty of fraud according to the FTC, The FCC and the State Attorneys General because the law clearly states that when a company advertises a product or service, the advertisement must be truthful without misleading the consumer. By doing so, the consumer is provided with the opportunity to make an informed decision to purchase the product or service offered. When a company decides to hide the truth in its advertisement, it becomes both an unethical and illegal situation.

In the Warner-Lambert case, the company should have conducted studies that were backed by scientific evidence prior to marketing the product incorrectly.

Which factors, behavior or actions would you have done differently if you were in charge of the companies? Why?

In the Warner-Lambert case, I would have conducted surveys or focus groups with various aged people who were sick with colds and sore throats and paid them to use the Listerine product to determine if its use improved or cured them. I would add a disclaimer that stated, based on recent studies conducted the Listerine pocket packs product provided a vapor nasal action when two or three sheets were taken together to help with allergies however none of the products cure colds or sore throats.

I would have placed an insert in the bill and added a disclaimer on the Verizon Wireless website in regards to the Premium SMS charges from the third-parties. Clients would be provided with a 90-day grace period to opt out of the service free of charge.

Being truthful and upfront with consumers from the beginning regarding all of the products and services would help to maintain and draw new clients and eliminate the need to payout claims in legal fees for being deceitful and dishonest.

References:

Verizon Wireless Premium SMS Refund Program. (2015, December 31). Retrieved October 26, 2016 from http://www.cfpbsettlementverizon.com

Post 2: Rachel wrote this:

Overview

Logitech’s former acting controller, Jennifer Wolf, did not keep track of the revenue of a new product that was not as successful as it was projected to be. This fraudulent information created a $30.7 million, or more than 27%, overstatement of operating income in fiscal 2011 (Heller, 2016). “On Tuesday, the SEC announced that Logitech had agreed to pay a $7.5 million fine to settle allegations of improper accounting involving the Revue product and two other areas during a five-year period. Two other executives — former controller Michael Doktorczyk and former director of accounting Sherralyn Bolles — agreed to pay penalties of $50,000 and $25,000, respectively” (Heller, 2016).

Is either company guilty of fraud?

Both, Warner-Lambert and Logitech are guilty of fraud and misrepresenting customers and investors. Warner-Lambert misrepresented their product, Listerine, to customers by stating that it prevented and cured colds and sore throats. This product in fact definitely did not and had a complaint filed against them for false advertisement. Logitech misrepresented investors by falsifying revenue to show that they were more successful with a new product than they actually were.

Which factors, behavior or actions would you have done differently if you were in charge of the companies? Why?

I would have not lied about the revenue of the Logitech company’s new television set-top device. I would have also not lied about the Listerine product curing colds and may have used advertising tactics such as saying it may alleviate sore throats instead of curing them. I would try not to have any false claims associated with my brand. This will cause judgement from consumers in the future and may stop people from purchasing my products compared to competitors.

References

Heller, M. (2016, April 19). Ex-Logitech CFO Accused of Accounting Fraud: CFO. Retrieved from CFO Web Site: http://ww2.cfo.com/accounting/2016/04/ex-logitech-…

 
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