The new breed of the informed. The proactive consumer. The prosumer

1. [Document subtitle]
[Author name]
[COMPANY NAME] [Company address]

2. Introduction
From its beginnings in 1994, Business-to-Consumer (B2C)
Internet Commerce has grown more slowly than even many skeptics
had predicted. There has been a decline in growth rates for many
types of mobile commerce (M-Commerce) that marketers and pundits
predicted. Consumers are enthusiastic about the new ways of
doing business. Some impediments have been natural, but others
have been created by marketers.
The concept of trust has been extensively studied by
eCommerce researchers. There was an antidote for many of the
impediments. Electronic transactions were expected to either
directly overcome those downsides or make the offering more
attractive to consumers and thereby compensate for them.
A naiveté has always permeated the 'trust' focus. An
organization's competency refers to its ability to fulfill the
promises it makes to customers, while its integrity refers to
its ability to act consistently, reliably, and honestly.
Companies that are benevolent are those who put their customers'
interests ahead of their own self-interest and show sincere
concern for them."
eCommerce researchers have spent a great deal of time
investigating the concept of 'trust'. This was seen as an
antidote to many of the impediments. It was expected to either
directly overcome them, or to add to the attractiveness of the
offering and thereby outweigh the downsides that consumers
perceive in doing business electronically.
It is evident from the behavior of consumer marketing
companies that few of them are benevolent, and that many
compromise their integrity in the process. Observers should not
be surprised, since 'holding consumer interests above a

3. corporation's own interests' is not only in direct conflict with
business culture, but also with the law. In spite of its
popularity as a unit-descriptor in US business schools,
'business ethics' is an oxymoron. Directors have obligations to
the company. However, corporations' behavior is not governed by
ethical considerations because consumer rights laws constrain
their actions.
1. From Passive to Proactive Consumers
Consumers are becoming less passive, and a greater number of
consumers are looking for more substance than image, which is
why the 'consumer as quarry' approach is rapidly approaching its
'use-by' date.
To describe how business enterprises prepared consumers for
the products that manufacturers soon would be able to produce,
Galbraith (1967) coined the term 'the revised sequence'. As a
result of mass media and sophisticated advertising techniques,
mass media could influence consumer behavior.
Many things have changed over the past few decades. In the
first place, there are other modes of communication besides
traditional broadcast media, such as billboards, print, radio
and television, that posed a challenge to mass media. Secondly,
advances in technology have enabled 'mass customisation' of
products at prices barely above standard prices, thanks to
advances in the economics of production.

4. The crucial third factor has been changes in consumer
behaviour. During the era of mass media, the Silent Generation,
Baby Boomers, and early Generation X'ers grew up. People who
were born after 1980, however, have a very different perspective
on the world. Many older generations have adapted to the new
possibilities, including some of the earlier generations.
In the 1990s, 'mass' was replaced by 'interactive'.
Millennials have grown up with inexpensive, reliable, and easily
accessible interactive multimedia communication. Instead of
merely being avid consumers of digital content and services,
they are now producers. Their mode of activity is participative.
The fact that it violates copyright law surprises them, although
it does not cause them much concern.
In mainstream media, we have moved away from interactive
services into 'always-on' and highly immersive situations, and
the individual tries to be 'always-on' as well.
As a result of these factors, the conditions have been
created for consumerism to flourish. The term was coined by
Toffler in 1980.
As the name implies, prosumers are proactive consumers and
producers. Prior to the industrial revolution, production for
consumption was the predominant activity. As a result of
industrialization, material wellbeing improved through
specialization of labour, which led to 'production for
exchange', and the separation of consumption and production
activities. The post-industrial age has caused a shift in human
activity back towards 'production for consumption' in recent
decades.
Do-it-yourself (DIY) movements and 'home handyman' trends, as
well as self-service retail stores and, gradually, self-service

5. checkouts are defining elements of prosumerism. Various methods
for gathering insights from people who or might buy a new
product or service include focus groups, consumer panels, and
other means. In the digital world, examples include direct data
capture at ATMs, EFT/POS terminals and more recently Internet
Banking, the free software and open source movements, together
with self-help, mutual service, contributions to FAQs, and
Wikipedia. With the advances in computing and networking
technologies, and the ease with which consumers are accessing
information, Toffler's concept of the "proactive consumer" has
become a reality.
Prosumers have undermined the concept of 'consumer as
quarry.' Within some markets, it is reasonable to say that
consumers are fools. But those segments are aging, and reducing
in size and spend. A growing number of people have a prosumer
orientation that makes it more likely to alienate them. In
innovation diffusion terms, some market segments already exhibit
early-adopter and early-majority characteristics, including many
that are likely to be early-adopters. Consequently, alienation
can result in non-adoption. These risks must be assessed and
then managed by corporations. This paper examines three areas:
communication, business, and the basis on which consumers and
companies interact.
2. Marketing - with - Prosumer Communications
In the mass media era, consumers are turned off by aggressive
and arrogant marketing practices. Information should be readily
available to them at any time, and terms should be fair and
convenient.

6. Contract law generally governs the terms of contracts that
merchants impose on consumers, with additional provisions
reflecting market power and size imbalances in many
jurisdictions. Complex patterns are particularly prevalent in
common law jurisdictions. Throughout history, laws developed on
the basis of judicial decisions, were overlaid by legislative
provisions and statutory codes, and were then supplemented by
judicial decisions that applied, explained, and expanded the
legislation.
In some cases, compliance with the law might be enough to
overcome distrust, but this is not likely. The consumer
protection law is poorly developed in many jurisdictions, and
even when it is strong, enforcing it is slow and difficult.
There is a gap between consumer expectations and the law - and
in some cases they are heading in divergent directions. It is
especially true in online and mobile commerce contexts, and
especially among the more tech-savvy and younger market
segments. Marketing to prosumers requires understanding and
reflecting both the law and consumer expectations.
A study of the terms that web-site operators impose on
consumers reveals that most understand neither the law nor
respect for it, and they actively work to curtail and undermine
consumers' legal rights. As Internet commerce is supranational,
this can be accomplished in several ways, such as imposing a
jurisdiction that is geographically remote from the consumer and
enforcing regulatory arbitrage.
A research study was conducted by this author in 2006. In
order to accomplish the project, a 'Normative Template for
Marketer-Consumer Communications' was developed based on the

7. available guidelines . This research project examined sites that
failed dismally to meet reasonable consumer expectations.
In this Template, consumer marketing companies can find a
checklist that is suitable for companies that recognize that
their contract terms are a distrust factor among customers and
prospects, and that wish to differentiate themselves with
consumer-friendly communications and contract terms.
A few of the ideas embodied or implied by the Template are
obvious, such as ensuring that the purchaser is clear about the
price he will pay and ensuring that personal data, particularly
payment-related information, is secure. However, there are other
important aspects that may be less obvious, such as:
•It is essential that the terms of each particular contract
be accessible before, after, and in the long run, in the
form of version management, including dates and version
numbers, and that prior versions remain accessible;
•Allocation of risk to the merchant. It is an inexpensive
form of marketing if the system is effective;
•Accessible and convenient enquiry and complaints
processes, as well as outcomes that can be appealed to a
higher authority and enforced.
Compared to their predecessors brought up in an era of mass
media, consumers today are more demanding. Providing the
customer with favorable terms of contract and constructive
communication can prevent distrust. Marketing, law, and
information systems insights and methods must be blended
effectively in this area of research

8. 3.Consumer Device Insecurity
There is one aspect of contract terms that seems likely to
impact the future of the contract. Transactions conducted from
desktops and laptops are risky. Many vulnerabilities exist in
the physical context, hardware, software, networks, and
transaction partners, and many threats exist as well. It has
been reported by various consultants and suppliers that
organised crime is attracted to Internet crime because it
provides 'easy money' and little chance of prosecution. While
the organizations making these pronouncements have their own
self-interests to consider, malware is already spreading at an
epidemic level.
Mobile, handheld, and wireless devices are increasingly being
used for eCommerce and MCommerce. As a result, there are even
greater risks. In general, the most pressing threat is the
occurrence of unauthorised transactions, either due to errors,
rogue devices, or rogue transactions, and to malware
infiltrating consumer devices and capturing authenticators.
Some financial institutions, in at least some countries, have
recognized the problem and imposed the responsibility on
consumers to ensure the security of their devices in order to
avoid liability. The fact that consumer devices cannot be made
secure is logically preposterous, since achieving moderate
levels of security requires knowledge and expertise beyond that
of the vast majority of consumers.
After public awareness revealed the proposal's
inappropriateness, a number of Australian banks backed off. New
Zealand's banks were able to achieve such a change through the
Banking Code. New Zealand regulators and consumer rights groups

9. have responded aggressively to these restrictions, but it
appears that these are being removed from the Banking Code.
Australian and New Zealand banks' ill-conceived moves are far
less constructive for consumer marketers. The first step is to
recognise the way in which the risks are created:
•Inherently insecure products are delivered by technology
providers;
• It includes financial institutions using payment processes
that are inherently insecure (especially credit cards);
• Overtop of insecure infrastructure are insecure eCommerce
facilities built by consumers marketing organizations.
Second, those industry sectors need to determine what steps
they should take. In Clarke & Maurushat, the following was
suggested:
•consumer education;
•on-demand advice to consumers;
•appropriate software, readily available for download;
•Download and install prepackaged security settings;
•Installing and configuring such software should be
straightforward.
Marketers who are confident in their security design may be
able to go a step further and encourage consumer trust (and
perhaps even loyalty). If you conduct eCommerce and MCommerce
through their facilities, they can offer you a guarantee against
losses. It might be reasonable for the prosumer to suspect that
companies that decline to offer such guarantees are
misrepresenting the security of their services and passing the
risks onto them. Prosumers will steer clear of such companies
and look for no-risk warranties that are ironclad.

10. 4.Privacy Law, Policies and Practice
Individuals have different perspectives on privacy and
different degrees of importance to it at different times and in
different contexts, and it is a slippery concept. Both from the
individual's perspective and from the consumer marketer's
perspective, privacy represents a risk because it creates
distrust and impedes adoption, and so must be managed.
It is possible to provide a shield against such distrust by
providing legal protections for privacy. Business enterprises
and government agencies have succeeded in ensuring that privacy
laws offer little protection and are in any case unenforceable
or unenforced. Fair Information Practices was responsible for
this.
With the publication of weaker guidelines designed to make
life easier for businesses and governments at the expense of
consumer privacy, the limited protections available under OECD-
style data protection laws have been undermined yet further.
This result has led to poor consumer protection, and the
growing number of prosumers is concerned about it. As a result,
corporations are exposed to privacy risks, such as suspicion and
mistrust. As a result, adoption is slow, resulting in limited
return on investment, or even non-adoption, resulting in
abandonment.
Corporations have perpetrated a number of blunders that have
caused the public to be deeply concerned about the way they
behave. Credit card details have been the subject of a highly
publicised cluster of security disasters. The collection, use,
and abuse of data, as well as retention, destruction, and access
to data are also concerns that are often far more significant
about privacy.

11. In order to address this issue, consumer marketing companies
have a number of options available to them.
A comprehensive privacy strategy can be developed and
implemented first. The purpose of this activity is to take a
proactive stance and lay the groundwork for specific actions
that both encourage positive actions (such as prior
consultations with affected parties and effective privacy
policies) and encourage defensive actions (such as credible
media releases to disperse the controversy when bad news
arises).
The second option is for companies to conduct privacy impact
assessments (PIAs) for every major project they undertake,
consult with privacy advocates and oversight agencies, and
design business processes so that privacy issues can be avoided
or at least minimized.
A third type of measure is the publication of privacy policy
statements (PPS). Especially in jurisdictions without or with
severely inadequate data privacy laws (primarily the USA and
Australia), this is very important. Prosumers, particularly
those telecommuting from overseas, may expect a PPS in most
European countries, so companies should invest in one.
Prosumers will demand consumer marketers use these
techniques. It is up to companies to either persist in their
old-fashioned, mass-media mentality and suffer slow turnover,
profitability, and brand value, or to begin cultural change now
and gain an early-mover advantage.
5. Conclusions
Traditional marketing philosophies derived from mass media
era have dominated eCommerce research. During the mass media

12. era, corporations and eCommerce researchers perceived consumers
similarly. 'Couch potatoes' are passive viewers of videos,
reacting but not responding to images being streamed at them.
Based on the analysis undertaken in this paper, the mass
media era has passed. Get over it'. In eCommerce research, we
are responsible for leading in new directions, not following
blind alleys. In an era of media that is not one-way, not simply
interactive, but immersive, prosumers' participation must now be
encouraged.
Researchers should at least complement, but preferably
replace, their focus on trust factors with attention to distrust
factors. It is necessary to purge the research toolkit of naive
notions of marketing company benevolence and even integrity.
Altruism has no place in corporate law or corporate culture,
but doing the right thing by consumers does. During their risk
assessments, organizations often discover that distrust inhibits
adoption. As prosumers become more activist and have more access
to information, image-building activities may have some effect,
but they breed cynicism among them. Instead of merely tricking
customers into believing that the company is benevolent,
positive actions can be taken to avoid distrust and instill
trust among them. These measures do not cost a lot of money.
Developing and implementing substantive measures is the most
effective way to address risks for consumers. In one element,
the merchant is assigned most of the risk by contractual terms
that protect their interests. Furthermore, consumer marketing
should be based on transparent, consumer-friendly privacy
policies and practices that avoid much of the data-acquisition
and consumer profiling that have been so prominent in recent
years.

13. In order to implement these strategies, a marketing
organization must have a corporate culture that embodies the
notion of 'consumer as quarry'. Organizations with old-fashioned
consumer marketing 'values', on the other hand, need to make a
cultural change urgently. So now is a better time to begin the
transition than later.
There is a need for significant transformation in many
consumer marketing organizations at the moment, since many of
them are behind the times. In order to differentiate themselves
from their competitors, more advanced and more flexible
companies must adopt consumer-friendly strategies and measures.
While that advantage is certainly competitive, second-movers
cannot recover the extra revenue generated during that window,
and regaining market-share and brand-enhancement gains will take
time and money.