Chapter 16

The Dark Side of Consumer

Behavior
Consumer Behavior - A Framework
John C. Mowen
Michael S. Minor

Key Concepts

Deceptive
advertising
Childrens ability to
distinguish programs
and ads
Improving childrens
advertising
Negligent consumer
behavior
Product misuse

Drivers of
compulsive
consumption
Corporate social
responsibility
Why firms want to
seem responsible
Consumer reactions
to product recalls
Corporate rumors

Introduction

Firms may engage in unscrupulous

behavior.
Consumers also engage in
negligent behavior.
Governments regulate buying and
selling goods and services to
reduce the harmful effects of these
behaviors.

Major Public Policy Issues

Deceptive advertising
Advertising to children
Telemarketing fraud

Deceptive Advertising

An advertisement which is potentially

misleading or literally false is deceptive.
Potentially misleading ads are difficult to
evaluate because miscomprehension may
often occur.

Miscomprehension is a problem for firms because

the audience does not understand the message
being delivered.

The FTC regulates deceptive advertising, but

not miscomprehension.

Advertising to Children

Both policy makers and marketing

managers have reacted to criticism of
advertising directed at children.
Some countries have banned
advertising to children under 12.

Telemarketing Fraud

The elderly are

vulnerable to fraud by
telemarketers.
A program to combat
this fraud is the Know
Fraud Program.
Organizations that fight
telemarketing fraud are
the AARP, the FBI, the
Post Office, and others.

Negligent Consumer
Behavior

Negligent behavior is composed of

actions and inactions that may
negatively affect the long-term quality
of life of individuals and society.
This type of behavior can occur in two
different contexts:

Product Misuse
Consumption of Hazardous Products

Product Misuse

Many injuries result from

misuse of a safe product
- not from product
defects.
Using a cell phone while
driving is being outlawed
in some areas.
The most dangerous
component is the
consumer, and theres no
way to recall him.

Consuming Hazardous
Products

Between 1988 and 1998 alcohol related

accidents have declined. The methods
used to increase consumer awareness
are:

Informing and Education

Social Controls
Economic Incentives
Economic Disincentives

Compulsive Behavior

Some products are hazardous and consumption

can become compulsive or addictive over time.
Other behaviors are not harmful in moderation
but become addictive when they become
compulsive.

Smoking
Compulsive Drinking
Gambling
Compulsive Shopping
Other Compulsions

Smoking

Consumers until the late 1960s were

exposed to nearly 3000 cigarette
commercials per week of 38 different
brands.
In 1950 there was already concern over
the health hazards of cigarette smoking.
Smoking declined from the 1960s to
1992 but has held steady since then.

Compulsive Drinking

As mentioned earlier, there has been a

decline in alcohol-related deaths on the
road. This suggests a decline in alcohol
consumption.
Despite the decrease in sales of hard
liquor, there is an increase in alcoholic
soft drinks.

These taste like colas or fruit juices but may

contain more alcohol than beer does.

Gambling

Gambling affects an estimated 8 to 12

million people.
Gambling takes place in casinos in Las
Vegas, New Jersey, on river boats and
elsewhere.
State-run lotteries make it easy to
gamble by visiting a convenience store.

Compulsive Shopping

Some consumers shop

till they drop because
shopping can become
an addiction similar to
alcohol or drugs.
There are drugs
available to help
relieve this compulsion.
Compulsive shopping
may be hereditary.

Other Compulsions

Overworking and
overeating are some
other compulsions.
Research has
stressed sociological
and psychological
influences. Chemical
imbalances may also
be important.
Multiple compulsions
may occur together.

Corporate Social
Responsibility

Firms have become viewed as

responsible for more than generating
profits.
Corporate social responsibility refers
to the idea that firms have an obligation
to help the larger society by offering
some of their resources.

Succeeding in the Long

Run

A businesss self-interest could be

advanced if the business embraced a
long-run view.
This position would permit expenditures
in support of socially responsible
activities and provide future benefits in
the form of consumer approval and
loyalty.

Acquiring a Positive Public

Image

One way of showing that companies are

socially responsible is by creating a
positive public image.
Another way that firms can show they
are socially responsible is by making
speedy product recalls.

The Diffusion of Rumors

Public peace of mind can be corrupted

by diffusion of rumors.
Rumors often plague both large and
small companies.

Types of Rumors

Pipe dream rumors represent wishful thinking on

the part of the circulators.
The bogie rumor is a fear rumor that spooks the
market place.
Self-fulfilling rumors are based on a perception
of what could happen in the future if something
else were to occur.
In premeditated rumors individuals spread
rumors that may help them financially or
otherwise.
Spontaneous rumors arise when people seek
explanations for unusual events.

Avoiding Regulation

A final reason to act in a socially

responsible manner is to avoid
government regulation.
Most of the burden of social
responsibility is on marketers. They can
do best by following the strategies
suggested, and maintaining a positive
initial corporate image and responding
quickly when difficulties arise.

Managerial Implications

Positioning. The concept of corporate social

responsibility has direct implications for the
positioning of a company. Efforts to create a
good-citizen image help to position a firm as
one that puts customers first.
Environmental Analysis. A companys actions
must be in compliance with laws and
regulation.

A firm should be in a position to respond promptly

if a response is warranted: An early-warning
system needs to be in place and functioning
continuously.

Implications continued

Research. Market research should be used to

determine how consumers view the company.

Market research may also help determine whether

customers are using a firms product in a novel
manner that may be unsafe.

Marketing Mix. Pricing, promotion, product

development, and distribution should be
socially responsible.
Segmentation. Some population segments
are more concerned with issues of corporate
social responsibility than are other segments.