In the wake of the ageing population in Hong Kong, the number of emergency alarm system (EAS) service providers has increased in recent years to cater for the needs of the elderly and the needy, and the services provided have also become more diverse. Apart from emergency support, service providers also provide services such as counselling, general enquiries, and regular consolation phone calls. They also support a wide range of devices, from traditional residential phones to the more modern smartphones and related products. Amongst the complaints received by the Consumer Council in recent years, most of them were related to the discrepancies between EAS services and consumers' expectations. For example, staff of the service provider promoted service plans on the pretext that consumers were entitled to a grant but did not clearly state the qualifying conditions, thereby misleading consumers into thinking that they could enjoy the services for free. Consumers found their new smartphones not compatible with the older versions of EAS mobile applications, causing inconvenience to consumers who need to upgrade their service plans for using the new applications. Consumers were also disappointed to learn that the number of regular consolation calls from EAS service providers were different from the sales pitch.

The Council reminds consumers that EAS services are support services that are designed for people with special needs. They are especially important to the elderly and those with chronic illnesses. However, they may not know how to enquire about details of the service plans and service providers should therefore disclose clear and complete information to consumers, including the nature, scope, terms and costs of services as well as the application requirements for the grant. They should also provide suggestions according to the consumers' needs and remain patient to elaborate on the details regarding special requests raised by consumers, so as to avoid unnecessary disputes. To safeguard the rights of the elderly when subscribing these services, it is advised that family members or dependable persons should accompany the elderly and help them understand the terms and conditions before signing the contract.

Case 1: Enticed to Enjoy Free Service with Government Grant but Need to Pay Eventually for Being Not Qualified

A staff member of Company A called the complainant to promote EAS service plans, and recommended a $210/month mobile service plan after learning that the complainant received a disability allowance. The staff member also mentioned that Company A could provide a monthly subsidy of $100 and the complainant could apply for a grant from the Social Welfare Department (SWD) to offset the outstanding amount, thus rendering the total service charge free. The complainant therefore agreed to subscribe to Company A's services. The complainant provided Company A with his passbook to apply for the subsidy as instructed by the staff. However, the complainant later discovered that Company A charged a total of $630 for EAS services in 3 months. The complainant decided to enquire with SWD which replied that the complainant was a recipient of the disability allowance but not the Comprehensive Social Security Assistance (CSSA) Scheme and in this circumstance, eligible applicants must be aged 65 or above, yet the complainant did not meet this age requirement.

The complainant sought the Council's help as he opined that Company A's staff failed to explain clearly on the criteria and did not follow up on his refund request for the subsidy. Company A initially only agreed to rescind the contract and waive the fee for breaching the contract. After the Council's conciliation, Company A agreed to give the complainant a full refund and send personnel to collect the EAS devices from the complainant.

Case 2: Re-signing Contract and Paying Extra for Incompatibility between EAS App and New Smartphone

The complainant suffers from chronic illness. As the complainant's family members have long been away from Hong Kong, he has installed EAS for years. The complainant purchased Company B's EAS special offer plan for 24 months with a monthly fee of $198. The plan covered both residential phone and mobile application. The complainant bought a new smartphone after about 6 months and discovered that the EAS mobile application was incompatible with it. Company B suggested the complainant to sign a new contract for an upgrade at a new monthly fee of $208; otherwise, the complainant could only use the mobile application on the old phone. The complainant was not willing to re-sign a new contract because the original contract with Company B was still valid. As the complainant did not know that the EAS mobile application could not support new phones and he could not carry 2 smartphones at the same time, and worry about his protection when staying outdoor, so he asked Company B to provide other viable solutions.

According to Company B's reply, although the EAS mobile application had already been updated, the older version could still run on some mobile phones. Company B eventually decided to exercise discretion to let the complainant upgrade the mobile application at the original price ($198) until the contract expires.

Case 3: Number of Consolation Phone Calls Fell Short of Expectations Due to Unclear Descriptions

The complainant is a singleton elderly who recalled that her mother used to receive a very warm consolation phone call from her EAS service provider before dinner every evening. Hence, when the complainant received a promotional call from Company C which promised her the same consolation phone call service, she agreed to install EAS for a monthly fee of $160. The complainant also agreed to pay 3-month service charge in advance upon the installation of EAS devices. However, over a period of 2 months, the complainant received less than 10 calls and with disappointment, she complained to Company C. A staff member replied that, due to a shortage of manpower, Company C could only call customers 2 to 3 times per month. The complainant was dismayed because the salesperson promised to call regularly. However, Company C claimed that the concerned staff, who was a new hire and did not fully understand EAS services, made the sales pitch and caused the misunderstanding. As the complainant opined that Company C provided services that did not match their promotional information, she lodged a complaint with the Council and demanded the cancellation of Company C's services.

According to Company C's reply, the complainant requested regular calls several months after signing the contract. Company C had already provided services such as weather alerts and calls on festive occasions or at irregular intervals. The complainant could also receive a call once a week and contact the staff by pressing the test button on the EAS device. However, the complainant did not accept these solutions. Company C insisted that the complainant should pay the installation fee of $475 for early termination of the 1-year contract. The complainant eventually decided to pay the fee and terminate the contract after negotiating with the company.

Some EAS service providers are self-financing charitable organisations while some are private corporations. Consumers should compare service plans based on their scope, costs, service quality and reputation, and also pay heed to the following:

• Compare and select service plans based on needs and habits, for example, the frequency of taking part in outdoor activities and the ability of using smartphones. Give service providers details about special requests in advance and confirm them in writing when signing the contract;
• Contact the SWD, the Housing Department or the Hong Kong Housing Society to enquire on the grant amount as well as application procedures and requirements in advance, and then discuss the details with family members or social workers. Avoid rushing into a decision based on the sales pitch so as to avoid unexpected losses;
• Read the details and costs as stipulated in the contract carefully and pay heed to any terms related to installation fees and early termination of contract. To understand lengthy contracts in small fonts, the elderly can consider asking family or friends for help.

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Then, assume you are the newly appointed marketing manager of Prompt Emergency Service Company and answer the following questions based on the above press release.

(1) Analyse what ethical issues in marketing mix of each case that were complained by customers as indicated in the above press release. Use the relevant information from the press release to support your analysis. (Also refer to Note: Ethical issues in marketing mix).

(2) Apply the four Successful strategies for Relationship Marketing to avoid the above identified customer' complaints in case 1 (Q1) to be occurred in your company. State clearly which complaints are avoided and it is expected all complaints of case 1 should be addressed. (Note: Each Successful strategy for Relationship Marketing must address at least one complaint.)

(3) Use the two more mature levels of Ethical (Moral Character) Development Model to elaborate how you would apply each of these levels to ethically to avoid the identified customers' complaints identified in case 3 (Q1). State clearly which complaints are avoided and it is expected all complaints of case 3 should be addressed. (Note: Each point of the levels must address at least one complaint.)

(4) According to your answer of Q2, design a poster to promote at least one of the successful strategies for Relationship Marketing to your company's customers.The promotional poster must be coloured and can be drawn either by hand or by computer.

Type your report and design your promotional poster on a standard form given.