Chapter 16 The Dark Side of Consumer Behavior   Consumer Behavior - A Framework John C. Mowen Michael S. Minor
Key Concepts <ul><li>Deceptive advertising </li></ul><ul><li>Children’s ability to distinguish programs and ads </li></ul>...
Introduction <ul><li>Firms may engage in unscrupulous behavior. </li></ul><ul><li>Consumers also engage in negligent behav...
Major Public Policy Issues <ul><li>Deceptive advertising </li></ul><ul><li>Advertising to children </li></ul><ul><li>Telem...
Deceptive Advertising <ul><li>An advertisement which is potentially misleading or literally false is deceptive. </li></ul>...
Advertising to Children <ul><li>Both policy makers and marketing managers have reacted to criticism of advertising directe...
Telemarketing Fraud <ul><li>The elderly are vulnerable to fraud by telemarketers.  </li></ul><ul><li>A program to combat t...
Negligent Consumer Behavior <ul><li>Negligent behavior is composed of actions and inactions that may negatively affect the...
Product Misuse <ul><li>Many injuries result  from misuse of a safe  product - not from product defects. </li></ul><ul><li>...
Consuming Hazardous Products <ul><li>Between 1988 and 1998 alcohol related accidents have declined. The methods used to in...
Compulsive Behavior <ul><li>Some products are hazardous and consumption can become compulsive or addictive over time.  </l...
Smoking <ul><li>Consumers until the late 1960s were exposed to nearly 3000 cigarette commercials per week of 38 different ...
Compulsive Drinking <ul><li>As mentioned earlier, there has been a decline in alcohol-related deaths on the road. This sug...
Gambling <ul><li>Gambling affects an estimated 8 to 12 million people. </li></ul><ul><li>Gambling takes place in casinos i...
Compulsive Shopping <ul><li>Some consumers “shop till they drop” because shopping can become an addiction similar to alcoh...
Other Compulsions <ul><li>Overworking and overeating are some other compulsions.  </li></ul><ul><li>Research has stressed ...
Corporate Social Responsibility <ul><li>Firms have become viewed as responsible for more than generating profits. </li></u...
Succeeding in the Long Run <ul><li>A business’s self-interest could be advanced if the business embraced a long-run view. ...
Acquiring a Positive Public Image <ul><li>One way of showing that companies are socially responsible is by creating a posi...
The Diffusion of Rumors <ul><li>Public peace of mind can be corrupted by diffusion of rumors. </li></ul><ul><li>Rumors oft...
Types of Rumors <ul><li>Pipe dream  rumors represent wishful thinking on the part of the circulators. </li></ul><ul><li>Th...
Avoiding Regulation <ul><li>A final reason to act in a socially responsible manner is to avoid government  regulation.  </...
Managerial Implications <ul><li>Positioning. The concept of corporate social responsibility has direct implications for th...
Implications continued… <ul><li>Research.  Market research should be used to determine how consumers view the company. </l...
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Chapter 16: The Dark Side of Consumer Behavior

  1. 1. Chapter 16 The Dark Side of Consumer Behavior Consumer Behavior - A Framework John C. Mowen Michael S. Minor
  2. 2. Key Concepts <ul><li>Deceptive advertising </li></ul><ul><li>Children’s ability to distinguish programs and ads </li></ul><ul><li>Improving children’s advertising </li></ul><ul><li>Negligent consumer behavior </li></ul><ul><li>Product misuse </li></ul><ul><li>Drivers of compulsive consumption </li></ul><ul><li>Corporate social responsibility </li></ul><ul><li>Why firms want to seem responsible </li></ul><ul><li>Consumer reactions to product recalls </li></ul><ul><li>Corporate rumors </li></ul>
  3. 3. Introduction <ul><li>Firms may engage in unscrupulous behavior. </li></ul><ul><li>Consumers also engage in negligent behavior. </li></ul><ul><li>Governments regulate buying and selling goods and services to reduce the harmful effects of these behaviors. </li></ul>
  4. 4. Major Public Policy Issues <ul><li>Deceptive advertising </li></ul><ul><li>Advertising to children </li></ul><ul><li>Telemarketing fraud </li></ul>
  5. 5. Deceptive Advertising <ul><li>An advertisement which is potentially misleading or literally false is deceptive. </li></ul><ul><li>Potentially misleading ads are difficult to evaluate because miscomprehension may often occur. </li></ul><ul><ul><li>Miscomprehension is a problem for firms because the audience does not understand the message being delivered. </li></ul></ul><ul><li>The FTC regulates deceptive advertising, but not miscomprehension. </li></ul>
  6. 6. Advertising to Children <ul><li>Both policy makers and marketing managers have reacted to criticism of advertising directed at children. </li></ul><ul><li>Some countries have banned advertising to children under 12. </li></ul>
  7. 7. Telemarketing Fraud <ul><li>The elderly are vulnerable to fraud by telemarketers. </li></ul><ul><li>A program to combat this fraud is the Know Fraud Program. </li></ul><ul><li>Organizations that fight telemarketing fraud are the AARP, the FBI, the Post Office, and others. </li></ul>
  8. 8. Negligent Consumer Behavior <ul><li>Negligent behavior is composed of actions and inactions that may negatively affect the long-term quality of life of individuals and society. </li></ul><ul><li>This type of behavior can occur in two different contexts: </li></ul><ul><ul><li>Product Misuse </li></ul></ul><ul><ul><li>Consumption of Hazardous Products </li></ul></ul>
  9. 9. Product Misuse <ul><li>Many injuries result from misuse of a safe product - not from product defects. </li></ul><ul><li>Using a cell phone while driving is being outlawed in some areas. </li></ul><ul><li>“ The most dangerous component is the consumer, and there’s no way to recall him.” </li></ul>
  10. 10. Consuming Hazardous Products <ul><li>Between 1988 and 1998 alcohol related accidents have declined. The methods used to increase consumer awareness are: </li></ul><ul><ul><li>Informing and Education </li></ul></ul><ul><ul><li>Social Controls </li></ul></ul><ul><ul><li>Economic Incentives </li></ul></ul><ul><ul><li>Economic Disincentives </li></ul></ul>
  11. 11. Compulsive Behavior <ul><li>Some products are hazardous and consumption can become compulsive or addictive over time. </li></ul><ul><li>Other behaviors are not harmful in moderation but become addictive when they become compulsive. </li></ul><ul><ul><li>Smoking </li></ul></ul><ul><ul><li>Compulsive Drinking </li></ul></ul><ul><ul><li>Gambling </li></ul></ul><ul><ul><li>Compulsive Shopping </li></ul></ul><ul><ul><li>Other Compulsions </li></ul></ul>
  12. 12. Smoking <ul><li>Consumers until the late 1960s were exposed to nearly 3000 cigarette commercials per week of 38 different brands. </li></ul><ul><li>In 1950 there was already concern over the health hazards of cigarette smoking. </li></ul><ul><li>Smoking declined from the 1960s to 1992 but has held steady since then. </li></ul>
  13. 13. Compulsive Drinking <ul><li>As mentioned earlier, there has been a decline in alcohol-related deaths on the road. This suggests a decline in alcohol consumption. </li></ul><ul><li>Despite the decrease in sales of hard liquor, there is an increase in alcoholic soft drinks. </li></ul><ul><ul><li>These taste like colas or fruit juices but may contain more alcohol than beer does. </li></ul></ul>
  14. 14. Gambling <ul><li>Gambling affects an estimated 8 to 12 million people. </li></ul><ul><li>Gambling takes place in casinos in Las Vegas, New Jersey, on river boats and elsewhere. </li></ul><ul><li>State-run lotteries make it easy to gamble by visiting a convenience store. </li></ul>
  15. 15. Compulsive Shopping <ul><li>Some consumers “shop till they drop” because shopping can become an addiction similar to alcohol or drugs. </li></ul><ul><li>There are drugs available to help relieve this compulsion. </li></ul><ul><li>Compulsive shopping may be hereditary. </li></ul>
  16. 16. Other Compulsions <ul><li>Overworking and overeating are some other compulsions. </li></ul><ul><li>Research has stressed sociological and psychological influences. Chemical imbalances may also be important. </li></ul><ul><li>Multiple compulsions may occur together. </li></ul>
  17. 17. Corporate Social Responsibility <ul><li>Firms have become viewed as responsible for more than generating profits. </li></ul><ul><li>“ Corporate social responsibility” refers to the idea that firms have an obligation to help the larger society by offering some of their resources. </li></ul>
  18. 18. Succeeding in the Long Run <ul><li>A business’s self-interest could be advanced if the business embraced a long-run view. </li></ul><ul><li>This position would permit expenditures in support of socially responsible activities and provide future benefits in the form of consumer approval and loyalty. </li></ul>
  19. 19. Acquiring a Positive Public Image <ul><li>One way of showing that companies are socially responsible is by creating a positive public image. </li></ul><ul><li>Another way that firms can show they are socially responsible is by making speedy product recalls. </li></ul>
  20. 20. The Diffusion of Rumors <ul><li>Public peace of mind can be corrupted by diffusion of rumors. </li></ul><ul><li>Rumors often plague both large and small companies. </li></ul>
  21. 21. Types of Rumors <ul><li>Pipe dream rumors represent wishful thinking on the part of the circulators. </li></ul><ul><li>The bogie rumor is a fear rumor that spooks the market place. </li></ul><ul><li>Self-fulfilling rumors are based on a perception of what could happen in the future if something else were to occur. </li></ul><ul><li>In premeditated rumors individuals spread rumors that may help them financially or otherwise. </li></ul><ul><li>Spontaneous rumors arise when people seek explanations for unusual events. </li></ul>
  22. 22. Avoiding Regulation <ul><li>A final reason to act in a socially responsible manner is to avoid government regulation. </li></ul><ul><li>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. </li></ul>
  23. 23. Managerial Implications <ul><li>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. </li></ul><ul><li>Environmental Analysis. A company’s actions must be in compliance with laws and regulation. </li></ul><ul><ul><li>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. </li></ul></ul>
  24. 24. Implications continued… <ul><li>Research. Market research should be used to determine how consumers view the company. </li></ul><ul><ul><li>Market research may also help determine whether customers are using a firm’s product in a novel manner that may be unsafe. </li></ul></ul><ul><li>Marketing Mix. Pricing, promotion, product development, and distribution should be socially responsible. </li></ul><ul><li>Segmentation. Some population segments are more concerned with issues of corporate social responsibility than are other segments. </li></ul>
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