Chapter 2.
Consumer Well-Being
MKT201 - CONSUMER BEHAVIOR
Watch the news…
Rana Plaza building collapsed in Bangladesh and fashion industry
American Volkswagen diesel emissions scam
And recently…
Innisfree’s plastic bottle covered with a “Hello, I’m Paper Bottle“ label.
Chapter Objectives
1. Ethical business is good business.
2. Marketers have an obligation to provide safe and functional
products as part of their business activities.
3. Consumer behavior impacts directly on major public policy issues
that confront our society.
4. Consumer behavior can be harmful to individuals and to society.
You are here!
Business Ethics and Consumer Rights
Ethics is moral principles that govern a person’s behavior or the
conducting of an activity (The Oxford Dictionary)
Business Ethics are rules of conduct that guide actions in the
marketplace; these are the standards against which most people in
a culture judge what is right and what is wrong, good or bad.
Over the last two decades, there has been an increased emphasis on
ethics within business and industry. One of the reasons is due to
increased public pressure on companies to perform ethically.
However, the question is can they provide profits and still do
what’s right for customers and the environment?
The answer is simple…
“Ethical business is good business.”
Nielsen found that 43% of global respondents claim to have
actually spent more on products and services from companies that
have implemented programs to give back to society.
Consumers in Asia-Pacific are most likely to say they had
spent more on products and services from socially responsible
companies.
Legal vs. Ethical
• Is there any different between legal business and ethical business?
• Many of the decisions that business people face today do not involve
strictly legal matters. Instead, they require judgements concerning
what is “right” or ethical behaviour.
• Although a business may be acting within the law, it may not be
ethical
Ethics vs. Culture
There are cultural differences in what is considered ethical.
Deception in Marketing
- Package Downsizing
This is a practise where the contents within
the package are reduced, but the price,
package size and appearance of the package
appears the same or is altered to hide the
reduced content. This practise is most often
used by manufacturers of fast-moving
consumer goods.
Deception in Marketing
- Slack Filling
A slack (or under) filling is another common practice which food
companies use to disguise the true contents within a particular
food packaging.
Video
Deception in Marketing
- Green Washing
A Greenwashing "is a practise which involves the selective
disclosure of positive environmental actions while hiding negatives
ones to portray a misleading picture of being environmentally
responsible to the public”. (Lyon, 2011)
What’s in a label?
Deception in Marketing
- Mimicry in the marketplace
Brand mimicry can be described as ‘the act or art of
copying or close imitation of a brand (usually a well-
known brand) in terms of packaging, design and
concept, and brand name in order to generalise
similar brand origin, company origin and attributes’
Consumers’ Right and Product Satisfaction
• Market Regulation
• Consumerism
• Corporate Social Responsibility (CSR)
• Transformative Consumer Research (TCR)
• Social Marketing
U.S. Regulatory Agencies and Responsibilities
Social Marketing and Corporate Social
Responsibility (CSR)
• Social marketing encourages positive behavior and discourages negative activities.
• CSR is the process of encourage organizations to make a positive impact on
stakeholders
• Cause marketing is a strategy that aligns businesses with a cause.
Mattel
OMO
Toms
Transformative Consumer Research
• TCR promotes research projects that include the goal of helping
people or bringing about social change
• Social marketing strategies use marketing techniques to encourage
positive behaviors such as increased literacy and to discourage
negative activities such as drunk driving
Data Privacy and Identity Theft
• Apple vs. Facebook and Data Privacy
• Identity theft occurs when someone steals your personal information and
uses it without your permission.
• Real-time bidding: an electronic trading system that sells ad space on the
Web pages people click on at the moment they visit them.
• Phishing in which people receive fraudulent emails that ask them to supply
account information.
• Botnets (a set of computers that are penetrated by malicious software
known as malware that allows an external agent to control their actions)
that hijack millions of computers without any trace.
• Locational privacy is related to consumers that have GPS on their cell
phones.
Sustainability and Environmental Stewardship
A triple bottom-line orientation refers to business strategies that strive to
maximize return in three ways:
• Financial
• Social
• Environmental
Green marketing describes a strategy that involves the development and
promotion of environmentally friendly products and stressing this attribute
when the manufacturer communicates with customers.
LOHAS—an acronym for “lifestyles of health and sustainability.” This label
refers to people who worry about the environment, want products to be
produced in a sustainable way, and spend money to advance what they see
as their personal development and potential.
Compulsive Consumption
Compulsive Comsumption refers to repetitive and often excessive
shopping performed as an antidote to tension, anxiety, depression, or
boredom.
“Shopaholics” turn to shopping much the way addicted people turn to
drugs or alcohol.
Consumed Consumers
Consumed consumers are people who are used or exploited, willingly
or not, for commercial gain in the marketplace. Examples – prostitutes,
selling babies, blood, organ and hair donors, surrogate mothers being
paid to carry other people’s children.
Consumers Theft and Fraud
Wardrobers who buy an outfit, wear it once, and return it; customers
who change price tags on items, then return one item for the higher
amount; and shoppers who use fake or old receipts when they return a
product.
This practise takes advantages of the retail stores return policy and can
be viewed as a variation of shop-lifting.
Counterfeiting and Piracy
Counterfeiting is when companies or individuals sell fake versions of
real products to customers.
End of Chapter 2
References
• Lyon, T. and J. Maxwell. 2011. “Greenwash: Corporate environmental
disclosure under threat of audit.” Journal of Economics &
Management Strategy, 20(1): 3-41.
