Appendix C: Detailed Flowcharts of the Ministry's Outcomes Framework

Consumers' Expectations of Transactions Are Met by Suppliers
The Role of Information in Creating Consumer Preferences and Expectations
Reductions in the Level of Product or Service Failures
Consumers and Suppliers Have Confidence in Market Rules and Institutions
Consumers Have Effective Access to Redress
Flowchart 1: The Ministry's Outcomes Framework
Flowchart 2: Meeting Consumers' Expectations - the Information Dimension
Flowchart 3: Meeting Consumers' Expectations - Reduced Product/Service Failure
Flowchart 4: Meeting Consumers' Expectations - Have Confidence in Market Rules and Institutions
Flowchart 5: Meeting Consumers' Expectations - Have Effective Access to Redress

The Ministry's high-level outcome is that:

Consumers Transact with Confidence

Our high-level outcome that "consumers transact with confidence" recognises three factors:

consumer expectations are influenced by the quality of information available to them about a transaction - and, collectively, successful transactions generate confidence
market rules and institutions influence the confidence of consumers
consumers have a reasonable expectation that effective redress is available.

The high-level outcome is supported by the following intermediate outcomes:

Consumers' Expectations of Transactions Are Met by Suppliers

Consumers enter into transactions with certain expectations. In particular, they may expect to receive: a particular product or service; of a particular description, quality, and quantity; at a particular price; or on particular terms. Consumers also have fundamental expectations around product safety. If those expectations are met, consumers' confidence in the particular supplier, and in the market overall, is likely to be reinforced.

The Role of Information in Creating Consumer Preferences and Expectations

Information helps shape the formation of consumer preferences and expectations about the process and outcome of a transaction.

Reductions in the Level of Product or Service Failures

Consumers generally make assumptions about the safety and quality of products and services. Assumptions about quality and fitness for purpose are likely to be informed by price and will vary accordingly. Consumers are likely to assume that products on the market are safe. [31] If there is a gap between assumptions and reality (the outcome of a transaction), consumers risk getting a bad deal.

Consumers and Suppliers Have Confidence in Market Rules and Institutions

Ideally, consumers and suppliers have confidence in the market as a whole. Confidence is self-reinforcing: if market participants believe the market works well, they act with confidence and that tends to reinforce confidence and further strengthen the market. Rules and institutions that contribute to well-functioning markets can reinforce consumer confidence by influencing the weighting consumers give to different assumptions when making decisions in the face of imperfect information.

Consumers Have Effective Access to Redress

The availability of effective redress can build consumer confidence in transactions by influencing the weighting consumers give to different assumptions when faced with imperfect information. Accessibility of redress mechanisms may reduce consumers' assessment of the risks of transacting with a supplier they do not know or trust (or have imperfect information about) because they are aware they can seek a remedy if things go wrong.

The flowcharts in this Appendix show the underlying assumptions and detailed interactions between consumers, suppliers and possible interventions by the Ministry - and how these interactions then link to the Ministry's specific outcomes.

Flowchart 1: The Ministry's Outcomes Framework

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Note: The flowchart represents the primary drivers of the Ministry's work. However, the public as opposed to "pure" consumer safety aspects of Consumer Safety's work [32] do not fit within this framework. No implication should be drawn from this. In particular it does not mean that these functions should not be carried out within the Ministry. Indeed, there are pragmatic reasons why this work should continue.