Consumer Behaviour- Discussion Assignment

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Consumer Behavior: Buying, Having, and Being 13th Edition

Chapter 2

Consumer and Social Well-Being

Learning Objectives 2.1 Ethical business is good business.

2.2 Marketers have an obligation to provide safe and functional products as part of their business activities.

2.3 Consumer behavior impacts directly on major public policy issues that confront our society.

2.4 Consumer behavior can be harmful to individuals and to society.

Learning Objective 2.1 Ethical business is good business.

Marketing Ethics and Public Policy •  Business ethics are rules of conduct that guide actions in

the marketplace

•  There are cultural differences in what is considered ethical.

Needs and Wants •  Consumerspace •  Materialism

•  Provenance

•  Curation

Do Marketers Manipulate Consumers? Advertisers simply do not know enough about people to manipulate them

Do Marketers Create Artificial Needs? Objective of marketing: create awareness that needs exist, not to create needs

•  Need: a basic biological motive

versus •  Want: one way that society has taught us that the need can be satisfied

Sample of Federal Legislation Intended to Enhance Consumers’ Welfare (1 of 2) Table 2.1 Sample of Federal Legislation Intended to Enhance Consumers’ Welfare

Year Act Purpose

1953 Flammable Fabrics Act Prohibits the transportation of flammable fabrics across state lines.

1958 National Traffic and Safety Act Creates safety standards for cars and tires.

1958 Automobile Information Disclosure Act

Requires automobile manufacturers to post suggested retail prices on new cars.

1966 Fair Packaging and Labeling Act Regulates packaging and labeling of consumer products. (Manufacturers must provide information about package contents and origin.)

1966 Child Protection Act Prohibits sale of dangerous toys and other items.

1967 Federal Cigarette Labeling and Advertising Act

Requires cigarette packages to carry a warning label from the Surgeon General.

1968 Truth-in-Lending Act Requires lenders to divulge the true costs of a credit transaction.

1969 National Environmental Policy Act

Established a national environmental policy and created the Council on Environmental Quality to monitor the effects of products on the environment.

1972 Consumer Products Safety Act Established the Consumer Product Safety Commission to identify unsafe products, establish safety standards, recall defective products, and ban dangerous products.

Sample of Federal Legislation Intended to Enhance Consumers’ Welfare (2 of 2) [Table 2.1 continued]

Year Act Purpose

1975 Consumer Goods Pricing Act Bans the use of price maintenance agreements among manufacturers and resellers.

1975 Magnuson-Moss Warranty Improvement Act

Creates disclosure standards for consumer product warranties and allows the Federal Trade Commission to set policy regarding unfair or deceptive practices.

1990 The Nutrition Labeling and Education Act

Reaffirms the legal basis for the Food and Drug Administration’s new rules on food labelling and establishes a timetable for the implementation of those rules.

1998 Internet Tax Freedom Act Established a moratorium on special taxation of the Internet, including taxation of access fees paid to America Online and other Internet Service Providers.

2010 Dodd-Frank Wall Street Reform and Consumer Protection Act

Prompted by the recession that began in 2008, intends to promote the financial stability of the United States by improving accountability and transparency in the financial system, to end “too big to fail,” to protect the American taxpayer by ending bailouts, and to protect consumers from abusive financial services practices.

Are Advertising and Marketing Necessary? Does advertising foster materialism?

•  Products are designed to meet existing needs •  Advertising only helps to communicate their availability

For Reflection (1 of 4) Advertisers are often blamed for promoting a materialistic society by making their products as desirable as possible. Do you agree with this?

•  Do you agree with this? –  If yes, is materialism a bad thing? –  If no, what are your reasons?

Learning Objective 2.2 Marketers have an obligation to provide safe and functional products as part of their business activities.

Courses of Action •  Voice •  Private

•  Third-Party Response

Consumers’ Rights and Product Satisfaction •  Market Regulation

–  Corrective advertising

•  Consumerism –  Culture jamming

U.S. Regulatory Agencies and Responsibilities Table 2.2 U.S. Regulatory Agencies and Responsibilities

Regulatory agency Responsibilities

Consumer Product Safety Commission (CPSC)

Protects the public from potentially hazardous products. Through regulation and testing programs, the CPSC helps firms make sure their products won’t harm customers.

Environmental Protection Agency (EPA)

Develops and enforces regulations aimed at protecting the environment. Such regulations have a major impact on the materials and processes that manufacturers use in their products and thus on the ability of companies to develop products.

Federal Communications Commission (FCC)

Regulates telephone, radio, and television. FCC regulations directly affect the marketing activities of companies in the communications industries, and they have an indirect effect on all firms that use broadcast media for marketing communications.

Federal Trade Commission (FTC)

Enforces laws against deceptive advertising and product labeling regulations. Marketers must constantly keep abreast of changes in FTC regulations to avoid costly fines.

Food and Drug Administration (FDA)

Enforces laws and regulations on foods, drugs, cosmetics, and veterinary products. Marketers of pharmaceuticals, over-the-counter medicines, and a variety of other products must get FDA approval before they can introduce products to the market.

Interstate Commerce Commission (ICC)

Regulates interstate bus, truck, rail, and water operations. The ability of a firm to efficiently move products to its customers depends on ICC policies and regulation.

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

Social Marketing and Corporate Social Responsibility (CSR) •  Social Marketing encourages positive behavior and

discourages negative activities.

•  CSR is the process of encouraging organizations to make a positive impact on stakeholders

•  Cause marketing is a strategy that aligns businesses with a cause.

Top Cause Marketers •  Yoplait •  Susan G Komen

•  General Mills

•  P&G

•  RED

•  Boxtops for Education •  Kellogg’s

•  Campbell’s

•  Girl Scouts

•  Dawn

For Reflection (2 of 4) •  Do you purchase a certain product because of their

cause? Why?

•  Do you think organizations support a cause for profits or because they want to be active in their community?

Learning Objective 2.3 Consumer behavior impacts directly on major public policy issues that confront our society.

Data Privacy and Identity Theft (1 of 2) •  Identity theft occurs when someone steals your personal

information and uses it without your permission.

•  The Personal Data Notification & Protection Act of 2015

•  The Student Digital Privacy and Parental Rights Act of 2015

•  Real time bidding •  Phishing

•  Botnets

•  Locational Privacy

Data Privacy and Identity Theft (2 of 2)

Market Access •  Disabilities •  Food deserts

•  Media literacy

•  Functionally illiterate

A triple bottom-line orientation refers to business strategies that strive to maximize return in three ways:

•  Financial

•  Social

•  Environmental

Sustainability and Environmental Stewardship (1 of 2)

Sustainability and Environmental Stewardship (2 of 2) •  Sustainability •  Conscientious consumerism

Green Marketing and Greenwashing

Table 2.4 LOHAS Market Sectors (1 of 3) Table 2.4 LOHAS Market Sectors

Personal Health Green Building

$117 billion $100 billion

Natural, organic products Home certification

Nutritional products Energy Star appliances

Integrative health care Sustainable flooring

Dietary supplements Renewable energy systems

Mind body spirit products Wood alternatives

Table 2.4 LOHAS Market Sectors (2 of 3) [Table 2.4 continued]

Eco Tourism Natural Lifestyles

$42 billion $10 billion

Eco-tourism travel Indoor & outdoor furnishings

Eco-adventure travel Organic cleaning supplies

Blank Compact fluorescent lights

Blank Social change philanthropy

Blank Apparel

Table 2.4 LOHAS Market Sectors (3 of 3) [Table 2.4 continued]

Alternative Transportation Alternative Energy

$20 billion $1 billion

Hybrid vehicles Renewable energy credits

Biodiesel fuel Green pricing

Car sharing programs Blank

Source: lohas.com accessed March 2, 2013.

For Reflection (3 of 4) •  Would you prefer to purchase from a restaurant that

composts?

•  What are some sustainable methods used in your workplace?

Learning Objective 2.4 Consumer behavior can be harmful to individuals and to society.

Consumer Terrorism •  Cyberterrorism •  Guerrilla marketing

Addictive Consumption •  Consumer addiction •  Social media addiction

•  Cyberbullying

•  Phantom Vibration Syndrome

•  Compulsive consumption

Dark Side of CB Consumed consumers

•  Illegal acquisition and product use –  Consumer theft and fraud

§  Shrinkage §  Serial wardrobers §  Counterfeiting

•  Anticonsumption

For Reflection (4 of 4) •  Do you know someone who is addicted to social media?

In what way?

•  If you work in retail, have you experienced consumers habitually returning items?

For Review 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.