Week 6 assignment

Please see attached. 

Issues in Consumer Protection and Potential Ethical Issues in Marketing Strategy Presentation

Grading Guide

MKT/554 Version 2

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Issues in Consumer Protection and Potential Ethical Issues in Marketing Strategy Presentation Grading Guide

MKT/554 Version 2

Consumer Behavior

Copyright

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Individual Assignment: Issues in Consumer Protection and Potential Ethical Issues in Marketing Strategy Presentation

Purpose of Assignment

Student understanding of consumer behavior is applied at the end of the course to how individuals and companies may harm the public in part based on similar insights on consumers and their vulnerabilities.

Grading Guide

Content		Met		Partially Met		Not Met		Comments:
The student provides personal thoughts and examples of data privacy and identity theft.
The student provides personal thoughts and examples of sustainability and environmental stewardship
The student provides personal thoughts and examples of addictive consumption
The student includes personal thoughts and examples of marketing ethics as it pertains to children, the elderly, and other disadvantaged groups.
The student includes graphics to enhance the effectiveness of their presentation.
The presentation is 10 to 15 slides with speaker notes and is appropriate for the audience.
The presentation includes relevant media and visual aids that are consistent with the content.
	Total Available		Total Earned
105	#/105

Met

Partially Met

Not Met

Comments:

Total Available

Total Earned

 

Presentation Guidelines
The presentation is laid out with effective use of headings, font styles, font sizes, and white space.
Intellectual property is recognized with in-text citations and a reference slide.
The presentation includes an introduction and conclusion that preview and review major points.
Major points are stated clearly; are supported by specific details, examples, or analysis; and are organized logically.
Rules of grammar and usage are followed including spelling and punctuation.
45	#/45

Assignment Total	#	150	#150
Additional comments:

Wk 6 – Issues in Consumer Protection and Potential Ethical Issues in Marketing Strategy Presentation

Top of Form

Assignment Content

1.

Top of Form

Create a 10- to 15-slide Microsoft® PowerPoint® presentation, with speaker notes, in which the interrelationship between consumer behavior and marketing is discussed.

Include topics such as business ethics and consumer rights from Ch. 2 of Consumer Behavior: Buying, Having, and Being.

Include the following in your presentation:

· Your personal thoughts and examples on data privacy and identity theft, sustainability and environmental stewardship, addictive consumption, and marketing ethics as it pertains to children, the elderly, and other disadvantaged groups

· Graphics to enhance the effectiveness of your presentation.

Format your presentation consistent with APA guidelines.

Bottom of Form

Bottom of Form

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Consumer Well-Being

Chapter Objectives

When you finish reading this chapter you will understand why

Christen wheels her cart down the grocery aisles, absent-mindedly
throwing in the usual fill-ins she always buys on her weekly trip. She
reaches for a box of Tide laundry detergent and is about to toss it
into the cart when she stops herself in midair: She just remembered
her resolution to think a little more about the environmental impact
of the cleaning products and other groceries she brings into the
house. When her son Jon came home from school and asked her
how she was helping to preserve the world for the next generation,

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.

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she was embarrassed that she couldn’t answer him. From the
mouths of babes! Time for this 33-year-old to learn a lesson.

Source: DmitriMaruta/Shutterstock.

Might as well start with detergents—Christen thinks about that news
report she saw last week about the excessive use of chemicals and
other additives that are bad for the water supply, not to mention the
huge amount of fresh water U.S. consumers waste just to wash their
clothes.

Christen has always bought Tide; it’s the same product her mother
used for years. Now as she takes a closer look in the detergent
section she notices a lot of other brands, including some
“ecologically sound” ones she’s never seen before like Dropps, Ecos,
Method, and Seventh Generation. When she looks at each box, Tracy
notices that some carry different “ecolabels,” including one issued
by the U.S. Environmental Protection Agency called DfE (Design for

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the Environment). Hmmm…Tide doesn’t have that on its box. On the
other hand, the Tide package does recommend just using cold water
instead of hot for the laundry, and Procter & Gamble (P&G) now sells
a concentrated version that doesn’t require as much soap to do the
wash. Christen also notices that the “green” brands seem to cost a
bit more. Today every penny counts—how much of her precious
grocery budget is worth sacrificing for a slightly less sudsy wash?
All of these choices are really confusing. Maybe she should stick
with what she knows and let others worry about the environment.
Then again, what will she tell Jon the next time he asks about how
“green” she is?

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Business Ethics and
Consumer Rights

Mainstream U.S. shoppers like Christen increasingly choose “green”
products that are better for the environment. On the other hand, there has
been a lot of hype about “the green revolution”; since the recession of 2008,
consumers are a lot more cost-conscious. To add to the confusion, even
well-intentioned shoppers have trouble figuring out which brands really are
better. It’s practically a full-time job to sort out all the competing claims.
One solution is for independent rating agencies to develop labeling
systems that the shopper can use to decide among options—but even
these systems can be overwhelming. There are 464 eco-label systems
worldwide. The U.S. government is trying to encourage businesses and
consumers to select green cleaning products; the Environmental Protection
Agency (EPA) even signed a promotion agreement with NASCAR to raise
awareness of the DfE label. In addition to DfE certification and other rating
systems the cleaning industry sponsors, a few manufacturers and retailers
even offer their own labels, such as SC Johnson’s Greenlist and Eco-Scale
by the Whole Foods grocery chain. Other major brands, like P&G’s Tide,
sell highly concentrated versions that are formulated to work with cold
water. It’s tough to make apples-to-apples comparisons, and these
competing systems threaten to “throw the baby out with the bath water” if
consumers like Tracy throw up their hands and just stick to what they know.

Ethical business is good business.OBJECTIVE 2-

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Is it possible for marketers to “do good” and still “do well”; can they
provide profits and still do what’s right for customers and the environment?

The answer is simple: Ethical business is good business. A majority of
consumers around the world say they are willing to pay more for products
and services from companies that are committed to positive social and
environmental impact. What is even more encouraging is that younger
consumers express this preference even more strongly: About three-
quarters of them feel this way, and 81 percent of them even expect their
favorite companies to declare publicly what they are doing to make the
world a better place.

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. These universal
values include honesty, trustworthiness, fairness, respect, justice, integrity,
concern for others, accountability, and loyalty.

Of course, notions of right and wrong differ among people, organizations,
and cultures. Some businesses believe it is okay for salespeople to pull out
all the stops to persuade customers to buy, even if this means they mislead
them; other firms feel that anything less than total honesty with customers
is terribly wrong. Because each culture has its own set of values, beliefs,
and customs, companies around the world define ethical business
behaviors quite differently.

These cultural differences certainly influence whether business practices
such as bribery are acceptable. Since

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77 the Foreign Corrupt Practices
Act makes it illegal for U.S. executives to bribe foreigners to gain business.
The Organization for Economic Cooperation and Development (OECD), to
which most industrialized countries belong, also outlaws bribery. Still,
these practices are common in many countries. In Japan, it’s called kuroi

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kiri (black mist); in Germany, it’s schmiergeld (grease money), whereas
Mexicans refer to la mordida (the bite), the French say pot-de-vin (jug of
wine), and Italians speak of the bustarella (little envelope). They’re all
talking about baksheesh, the Middle Eastern term for a “tip” to grease the
wheels of a transaction. Giving “gifts” in exchange for getting business
from suppliers or customers is acceptable and even expected in many
countries.

Regardless of whether they do it intentionally, some marketers do violate
their bonds of trust with consumers. In some cases, these actions are
actually illegal, as when a manufacturer deliberately mislabels the contents
of a package. Or a retailer may adopt a “bait-and-switch” selling strategy
that lures consumers into the store when it offers inexpensive products
with the sole intent to get them to switch to higher-priced goods.

In other cases, marketing practices have detrimental effects on society
even though they are not explicitly illegal. Some companies erect billboards
advertising alcohol and tobacco products in low-income neighborhoods;
others sponsor commercials that objectify women as they pander to male
viewers.

Needs and Wants: Do Marketers
Manipulate Consumers?

One of the most common and stinging criticisms of marketing is that
companies convince consumers they “need” many material things, and that
they will be unhappy and inferior people if they do not have these
“necessities.” The issue is a complex one and is certainly worth

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considering: Do marketers give people what they want, or do they tell
people what they should want?

Who controls the market—companies or consumers? This question is even
more complicated as new ways of buying, having, and being are invented
every day. It seems that the “good old days” of marketerspace—a time when
companies called the shots and decided what they wanted their customers
to know and do—are dead and gone. Many people now feel empowered to
choose how, when, or if they will interact with corporations as they
construct their own consumerspace .

In this new environment, individuals dictate to companies the types of
products they want and how, when, and where (or even if) they want to learn
about those products. In turn, companies need to develop and leverage
brand equity in bold new ways to attract the loyalty of these consumer
“nomads.” People still “need” companies—but in new ways and on their
own terms. As we’ll see throughout this text, profound changes in
consumer behavior are influencing how people search for product
information and evaluate alternative brands. In the brave new world of
consumerspace, we have much greater potential to shape our own
marketing destinies.

Do Marketers Create Artificial Needs?
The marketing system has come under fire from both ends of the political
spectrum. On the one hand, some members of the religious right believe
that marketers contribute to the moral breakdown of society when they
present images of hedonistic pleasure and encourage the pursuit of secular
humanism at the expense of spirituality and the environment. A coalition of
religious groups called the National Religious Partnership for the
Environment claims that gas-guzzling cars and other factors that cause

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climate change are contrary to Christian moral teachings about protecting
people and the Earth.

On the other hand, some leftists argue that the same deceitful promises of
material pleasure function to buy from people who would otherwise be
revolutionaries working to change the system. According to this argument,
the marketing system creates demand—demand that only its products can
satisfy.

A Response.

As we saw in Chapter 1 , a need is a basic biological motive; a want
represents one way that society has been taught to satisfy the need. For
example, thirst is a biologically based need. Marketers teach us to want
Coca-Cola to satisfy that thirst rather than, say, goat’s milk. Thus, the need
is already there; marketers simply recommend ways to satisfy it. A basic
objective of marketing is to create awareness that needs exist, not to
create needs.

Is Marketing Necessary?
More than

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years ago, the social critic Vance Packard wrote, “Large-scale
efforts are being made, often with impressive success, to channel our
unthinking habits, our purchasing decisions, and our thought processes by
the use of insights gleaned from psychiatry and the social sciences.” The
economist John Kenneth Galbraith charged that radio and television are
important tools to accomplish this manipulation of the masses. Because
consumers don’t need to be literate to use these media, repetitive and
compelling communications can reach almost everyone. This criticism
may even be more relevant to online communications, where a simple click
delivers a world of information to us.

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The American Association of Advertising Agencies created this ad to
counter charges that ads create artificial needs.
Source: Used with permission of the American Association of Advertising Agencies.

Some people charge that marketers arbitrarily link products to desirable
social attributes, so they foster a materialistic society where what we own
defines our value as a person. One influential critic even argued that the
problem is that we are not materialistic enough: We do not sufficiently
value goods for the utilitarian functions they deliver but instead focus on
the irrational value of goods for what they symbolize. According to this
view, for example, “Beer would be enough for us, without the additional
promise that in drinking it we show ourselves to be manly, young at heart,
or neighborly. A washing machine would be a useful machine to wash
clothes, rather than an indication that we are forward-looking or an object of
envy to our neighbors.”9

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A poster for Westin Hotels’ Well-Being Movement.
Source: Courtesy of Starwood Hotels & Resorts Worldwide, Inc.

A Response.

Products meet existing needs, and marketing activities only help to
communicate their availability. The economics of information
perspective regards advertising as an important source of consumer
learning. This view emphasizes the economic cost of the time we spend
to search for products. Accordingly, advertising is a service for which
consumers are willing to pay because the information it provides reduces
their search time.

Do Marketers Promise Miracles?

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Advertising leads us to believe that products have magical properties; the
things we buy will transform our lives. We will be beautiful, successful,
perhaps even live forever. In this respect, advertising functions as
mythology does in primitive societies: It provides simple, anxiety-reducing
answers to complex problems.

A Response.

Marketers simply do not know enough about people to manipulate them.
Consider that the failure rate for new products ranges from 40 to

80

percent. Although people think that advertisers have an endless source of
magical tricks and scientific techniques to manipulate them, in reality the
industry is successful when it tries to sell good products and unsuccessful
when it sells poor ones.12

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Consumers’ Rights and
Product Satisfaction

Fifty-four million dollars for a pair of missing pants? A judge in
Washington, D.C., made headlines a decade ago when he filed a $54 million
lawsuit against his neighborhood dry cleaner because it lost a pair of his
pinstriped suit pants. He claimed that a local consumer protection law
entitled him to thousands of dollars for each day over nearly four years in
which signs at the shop promised “same day service” and “satisfaction
guaranteed.” The suit dragged on for several months, but at the end of the
day the plaintiff went home with empty pockets. And some people claim
we have too many lawsuits in this country!

If you’re not happy with a product or service, what can you do about it? You
have three possible courses of action (though sometimes you can take
more than one):

1. Voice response—You can appeal directly to the retailer for redress
(e.g., a refund).

2. Private response—You can express your dissatisfaction to friends
and boycott the product or the store where you bought it.

Marketers have an obligation to provide safe and
functional products as part of their business activities.
OBJECTIVE 2-2

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3. Third-party response—Like the pantsless judge, you can take legal
action against the merchant, register a complaint with the Better
Business Bureau, or write a letter to the newspaper. These
comments can be effective, especially when others join in. Cover
Girl ran an advertising campaign targeted at female football fans
that depicted a model wearing a Baltimore Ravens jersey with the
tagline, “Get Your Game Face On.” At about the same time, a
prominent Ravens player made headlines in a series of allegations
about NFL players who physically abused their wives and girlfriends.
Protestors went online and altered the ad to make it look like the
model had a black eye. When enough people band together to
express negative marketplace sentiments through activist
organizations such as Greenpeace or in social media mass protests
such as the one Cover Girl ran into, dramatic changes can result.

The Tangled Web
From ihatestarbucks.com to
boycottwalmart.meetup.com/, irritated customers have
launched hundreds of gripe sites to air their grievances
against companies. The practice is so widespread that
some firms proactively buy unflattering domain names
to keep other people from buying them. Xerox, for
example, registered xeroxstinks.com,
xeroxcorporationsucks.com, and ihatexerox.net. About
20,000 domain names end in “sucks.com.” About one-
third of these sites are registered to none other than
the companies they slam: owners include Walmart
Stores, Coca-Cola, Toys “R” Us, Target, and Whole
Foods Market.

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In one study, business majors wrote complaint letters to companies. When
the firm sent a free sample in response, this action significantly improved
how the students felt about it. This didn’t happen, however, when they only
received a letter of apology—but no swag. Even worse, students who got no
response reported an even more negative image than before. This shows
that any kind of response is better than none.

Mass protests can sometimes bring about change.
Source: ZUMA Press, Inc./Alamy Stock Photo.

A number of factors influence which route we choose. People are more
likely to take action if they’re dissatisfied with expensive products such as
household durables, cars, and clothing than for problems with inexpensive
products. Ironically, consumers who are satisfied with a store in general
are more likely to complain if they experience something bad; they take the
time to complain because they feel connected to the store. And, if a

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company resolves the problem, customers feel even better about it than if
they hadn’t complained in the first place! The moral: Although nobody
likes criticism, organizations should encourage people to complain for
these reasons:

1. They get the chance to correct the situation.
2. They will avoid an escalating problem that results when consumers

take to social media to let others know they’ve been treated badly.
People are more likely to spread the word about unresolved negative
experiences to their friends than they are to boast about positive
occurrences.

3. They collect valuable insights about customers’ experiences that will
(hopefully) help them to improve for future customers.

4. If consumers do not believe that the store will respond to their
complaint, they will be more likely to simply switch than fight as
they just take their business elsewhere.

Companies that score high in customer satisfaction often benefit from a
big competitive advantage—especially when so many firms skimp on the
attention they pay to customers. A five-year study of customer satisfaction
in the Canadian banking industry provides typical results: Banks that
provided better service commanded a larger “share of wallet” than did
others (i.e., their customers entrusted them with a larger proportion of their
money).

Even so, more than half of the chief marketing officers (CMOs) who
participated in a large survey reported that their companies do not reward
their employees if customer satisfaction improves. More than one-third
said they have no way to track word-of-mouth among customers, and fewer
than three in ten said their firms are good at resolving customers’
complaints. What is wrong with this picture?

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Consumers get creative when they want to vent their feelings about
companies they don’t like.
Source: Michael Matthews/Alamy Stock Photo.

When a product doesn’t work as we expect or turns out to be unsafe (like
the spate of hazardous products from China, ranging from toothpaste to
dog food), it’s the understatement of the year to say we’re not satisfied. In
these situations, marketers must immediately take steps to reassure us, or
they risk losing a customer for life. If the company confronts the problem
truthfully, we are often willing to forgive and forget. But if the firm seems to
be dragging its heels or covering up, our resentment grows. This is what
happened during the BP oil spill in the Gulf of Mexico or during the
infamous “Poop Cruise,” when a disabled Carnival cruise ship sat at sea
while 4,200 passengers and crew suffered through five days with no
plumbing or electricity, and little food, under the glare of an unrelenting
media spotlight.

Market Regulation

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The subprime mortgage meltdown that led to the collapse of major
investment banking and insurance companies such as Bear Stearns,
Lehman Brothers, and AIG, as well as triggering the Great Recession of
2008 (and beyond), illustrates why many people look to governments and
industry watchdogs to provide oversight and regulation rather than relying
strictly on businesses to police themselves. Some members of the
business community regard this level of government oversight as
excessive, and the Trump administration has aggressively unraveled many
rules that relate to product safety and the environment. Still, concern for
the welfare of consumers has been an issue since at least the beginning of
the 20th century, and activists continue to voice concerns about a range of
issues such as child labor, exploitative advertising, and genetically
engineered food.

Partly as a result of consumers’ efforts, the U.S. government established
many federal agencies to oversee consumer-related activities. These
include the Department of Agriculture, the Federal Trade Commission, the
Food and Drug Administration, the Securities and Exchange Commission,
and the EPA. After Upton Sinclair’s 1906 book The Jungle exposed the
awful conditions in the Chicago meatpacking industry, Congress was
prompted to pass important pieces of legislation—the Pure Food and Drug
Act in 1906 and the Federal Meat Inspection Act a year later—to protect
consumers. A summary of some important consumer legislation enacted
since that time appears in Table 2.1 . You can find other information
about consumer-related issues at consumerreports.org and cpsc.gov (the
Consumer Product Safety Commission).

Table 2.1 Sample of Federal Legislation to Enhance Consumers’ Welfare

Year Act Purpose

1953 Flammable Prohibits the transportation of flammable fabrics

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Fabrics Act 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.

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Consumer
Products
Safety Act

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

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.

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99

0 The Nutrition
Labeling and
Education Act

Reaffirms the legal basis for the Food and Drug
Administration’s new rules on food labeling and
established 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. The Trump Administration is working to
repeal this Act.

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2016 Consumer
Review
Fairness Act
of 2016

Passed in response to a number of incidents where
companies tries to stifle negative online user reviews
by including a “gag clause” in a contract that
threatens legal action or monetary damages when
customers say bad things about the company. The
bill allows the FCC and individual states to take action
against companies that try this tactic.

Table 2.2 lists major U.S. regulatory agencies and what they do. One of
the most important ones for consumers is the Food and Drug
Administration (FDA); it polices advertising claims as well as the contents
of edible products and pharmaceuticals. For example, as part of an FDA
crackdown on consumer drug advertising, Bayer HealthCare
Pharmaceuticals launched a $20 million corrective advertising
campaign for Yaz, the most popular birth control pill in the United States.
This term means that the company must inform consumers that previous
messages were wrong or misleading. The TV commercials, which ran
during prime-time shows such as Grey’s Anatomy and on cable networks,
warned that nobody should take Yaz hoping that it will also cure pimples or
premenstrual syndrome. Bayer was required to run these ads to correct
previous messages after regulators decided the earlier ads overstated the
drug’s ability to improve women’s moods and clear up acne.

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.

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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.

Advertisers, retailers, and manufacturers typically try to police themselves
to ensure that their messages and products are not harmful or inaccurate.
In addition to good intentions, they have a practical reason to do so: They
don’t want governments to do it for them. Indeed, sometimes these efforts

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even seem to go a bit over the top. Consider, for example, a ruling by the
National Advertising Division (NAD) of the Council of Better Business
Bureaus, which is one of these industry watchdogs. Acting on a complaint
by rival Kimberly-Clark, P&G must add little flecks of cartoon toilet paper to
the backsides of its Charmin cartoon bears in future ads for its toilet paper.
Although P&G supported its claim that Charmin leaves “fewer pieces
behind” than the Cottonelle brand (and showed the results of its test on the
brand’s website), the NAD decided that the test “did not accurately reflect
the results consumers normally see and experience.”27

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Consumerism

“Absolut Impotence.” So reads a parody of a vodka ad created by
Adbusters, a nonprofit organization that advocates for “the new social
activist movement of the information age.” The editor of the group’s
magazine argues that America is no longer a country, but rather a
multitrillion-dollar brand subverted by corporate agendas. He claims that
“America™” is no different from McDonald’s, Marlboro, or General Motors.

Adbusters sponsors numerous initiatives, including Buy Nothing Day and
TV Turnoff Week, that try to discourage rampant commercialism. These
efforts, along with biting ads and commercials that lampoon advertising
messages, are examples of culture jamming , which is a strategy to
disrupt efforts by the corporate world to dominate our cultural landscape.
The movement believes that “culture jamming” will change the way
information flows; the way institutions wield power; the way TV stations are
run; and the way the food, fashion, automobile, sports, music, and culture
industries set their agendas.

Although some in corporate America may dismiss these extreme
sentiments as the ravings of a lunatic fringe, their proponents deserve to be
taken seriously. The scandals involving such corporate icons as BP, AIG,
Enron, Martha Stewart, Arthur Andersen, Bear Stearns, and massive product
recalls from companies such as General Motors and Blue Bell Creameries
fueled a growing bonfire of mistrust and skepticism among the consuming
public.

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President John F. Kennedy ushered in the modern era of consumerism with
his “Declaration of Consumer Rights” in 1962. These include the right to
safety, the right to be informed, the right to redress, and the right to choice.
The 1960s and 1970s were a time of consumer activism as consumers
began to organize to demand better-quality products (and to boycott
companies that did not provide them).

The publication of books such as Rachel Carson’s Silent Spring in 1962,
which attacked the irresponsible use of pesticides, and Ralph Nader’s
Unsafe at Any Speed in 1965, which exposed safety defects in General
Motors’ Corvair automobile, prompted these movements. Many people
have a vigorous interest in consumer-related issues, ranging from
environmental concerns such as global warming and climate change, toxic
waste, and so on, to excessive violence and sex on television or in the lyrics
of popular rock and rap songs like Robin Thicke’s controversial Blurred
Lines music video that some people interpreted as encouraging rape.
Indeed, after a public outcry Reebok had to drop the rapper Rick Ross from
its endorsement roster after he released a song about spiking a woman’s
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Corporate Social Responsibility (CSR)

The evidence is clear that a brand’s philanthropic activities can influence
shopper behavior and ultimately purchase decisions. Consumers are
especially interested in choosing brands that support causes they find
personally relevant. These causes include medical cures and disease
prevention, social change, faith-based initiatives, and animal and child
welfare.

As a reaction to these feelings, many firms today try to integrate corporate
social responsibility (CSR) into their business models. CSR describes
processes that encourage the organization to make a positive impact on
the various stakeholders in its community including consumers,
employees, and the environment. For example, the shoe company TOMS is
well-known for its promise to give a needy child a pair of shoes for every
pair it sells.

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Transformative Consumer Research

Indeed, some consumer researchers are themselves organizing, not only to
study but also to rectify what they see as pressing social problems in the
marketplace. This perspective is called participatory action research (PAR)
or transformative consumer research (TCR) . It promotes research
projects that include the goal of helping people or bringing about social
change. Scientists who subscribe to this perspective view consumers as
collaborators who work with them to realize this change rather than as a
“phenomenon” on which to conduct research. Adherents of TCR work with
at-risk populations, such as children, the disadvantaged, and the disabled,
or on such topics as materialism, consumption of dangerous products, and
compulsive consumption.

Marketing Pitfall
When an organization wants to encourage people to
contribute to its cause in some way, it seems like a
good idea to provide an initial token display of support
such as wearing a T-shirt, signing a petition, or asking
them to join a Facebook group. Makes sense, right?
Not necessarily. Some critics are worried about the
phenomenon they term slacktivism ; small and
relatively meaningless expressions of support for
important causes such as liking a charity on Facebook
that substitute for donations or volunteering. One study

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found that if the initial display is visible to others, this
public behavior can actually reduce the likelihood that
the person will contribute beyond that. Under some
circumstances the need to make a positive impression
on others is satisfied by the public display, so the
person exhibits slacktivism and doesn’t bother to do
anything else to support the cause.30

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Social Marketing

As the emerging TCR perspective shows, the field of consumer behavior
can help to improve our lives as consumers. Social marketing strategies
use the techniques that marketers normally employ to sell beer or
detergent to encourage positive behaviors such as increased literacy and to
discourage negative activities such as drunk driving. Many researchers
help to evaluate or create public policies to ensure that products are
labeled accurately, to certify that people can comprehend important
information in advertising messages, or to prevent children from being
exploited by program-length toy commercials that masquerade as
television shows.

CSR is more than a nice idea; it’s also good business. Consumer research
convincingly shows that, when all other things are equal, people are likely to
choose a brand that gives back to the community. Cause marketing is a
popular strategy that aligns a company or brand with a cause to generate
business and societal benefits. Indeed, one survey reported that three out
of five consumers bought a product or service in the previous year because
of its association with a cause. An executive observed, “As a whole,
Americans do have a heightened sensitivity to how they can help make a
difference.”

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Major Policy Issues Relevant
to Consumer Behavior

It’s hard to divorce consumer behavior from most of what goes on around
us. The field intersects with many of the big issues we read about and
debate every day. These range from human rights and humane working
conditions to the safety of what we eat, the future of our environment, and
our relationships with governments, corporations, and other organizations.
In this section, we’ll introduce three major issues—without pretending to
cover all of the important ones.

Data Privacy and Identity Theft

A Carnegie Mellon professor demonstrated just how easy it is to find
people online if you know what you’re doing. In one study he showed that it
was possible to deduce portions of a person’s Social Security Number
from nothing but a photograph posted online. The failure of social media
platforms including Facebook and Twitter to police “fake news” content
such as ads that Russians purchased to influence the 2016 presidential
election prompt many to reconsider how “free” information should be.

Consumer behavior impacts directly on major public
policy issues that confront our society.
OBJECTIVE 2-3

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Other technologies also threaten our privacy even while they make
marketing efforts more efficient. Facebook introduced a “Tag Suggestions”
feature that uses facial recognition to identify a user’s friends in photos he
or she uploads, and automatically suggests nametags for them. Other
programs like Picasa also incorporate facial recognition technology. This
handy little tool removes the need to keep typing the same friends’ names
into photo albums. But is there a dark side to this capability? Because
facial recognition analyzes and stores people’s unique facial
measurements, it may come with some serious privacy risks. For example,
in the near future it will be possible for marketers to identify people as they
walk down the street—and link their faces to relevant information such as
credit scores or medical records. Some firms already offer smart
billboards that detect the gender and age of a passerby and show that
person relevant ad messages. For now these boards don’t analyze
emotions or other personal characteristics, but what if they could detect a
feeling like sadness and offer the person a message about
antidepressants?

One of the biggest ethical issues many marketers face today relates to how
much they can—or should—know about their customers. Virtually anyone
who surfs the internet or who carries a cell phone (especially a smartphone
with GPS capability) shares reams of personal information with all sorts of
companies (whether they know it or not).

Clearly, we all benefit from technologies that allow companies to precisely
tailor their messages to our needs based on the product information we
look for. Indeed, industry researchers report that a lot of people actually
don’t mind the ads if they are personally relevant. But some consumer
advocates argue that we pay a high cost for this convenience. As the
director of one consumer group phrased it in a complaint to the Federal
Trade Commission, “Online consumers are being bought and sold like
chattel.”

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Are we for sale? In some sense, yes. If you go on the internet (and who
doesn’t today?), it’s likely that someone is carefully tracking your clicks—
the search items you Google, the sites you visit, perhaps even the
comments you post on Facebook. Your digital actions have actual financial
value, because of the industry called real-time bidding ; an electronic
trading system that sells ad space on the webpages people click on at the
moment they visit them.

In the early days of the internet, advertisers simply bought space on sites
that generally matched the demographics of their target audience. Then
they showed the same ad to everyone who came to the site—an inefficient
approach people in the industry call “spray and pray.” Today that picture has
changed as companies develop complex algorithms that predict where
consumers with specific profiles (e.g., “Asian Americans who make more
than $

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,000 a year, live in Los Angeles, and are in the market for a luxury
car”) will visit and serve up precisely tailored messages to these
customers. By the way, these are not “live auctions” like you might see on
eBay; they are conducted automatically on powerful computers that receive
several million bids every second. Each auction typically takes less than 30
milliseconds. And because not all customers are as likely to buy or to
spend as much as are others, these algorithms attach different values to
them so higher value customers command higher auction prices. As the
CEO of one of these trading companies explained, “The first impression
seen by a high-value person on the opening page of a major newspaper
first thing in the morning has a different value than a user from China who
is 12 and has been on the Web all day long playing games.” The real-time
bidding business is growing rapidly: Analysts estimate that by 2018, the
U.S. market alone will reach more than $12 billion.

Identity theft occurs when someone steals your personal information
and uses it without your permission. They may charge items on a credit
card or perhaps access medical services via your health benefits. Identity

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theft is the most common consumer complaint, according to the Federal
Trade Commission. It accounts for almost 20 percent of all problems
consumers report. Experts estimate that over 15 million Americans fall
victim to identity theft each year, with financial losses exceeding $50
billion. That’s about one in 16 adults! And, as any victim knows, the
financial aspects are not the only pain points because cancelling credit
cards or otherwise correcting the situation can result in huge hassles.

Identity thieves get more sophisticated every day. They used to be content
with stealing wallets and “dumpster diving” to obtain account numbers.
Today, we increasingly fall prey to high-tech phishing scams in which
people receive fraudulent emails that ask them to supply account
information, as well as 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.
Data breaches at major companies such as Equifax, Yahoo!, Target, Sony
Pictures, and even NASA continue to worry many people.

Locational privacy is a related issue. Every one of us who walks around
with a phone transmits his or her approximate location, and those of us
with GPS-enabled phones leave nothing to chance. In addition, many cars
now have GPS devices that can share their location with a centralized
service. We can purchase GPS trackers to keep tabs on our kids, aged
relatives, or wayward pets. Some insurance companies offer steep
discounts to drivers who use GPS tracking technology. The companies
provide a small tracker in the car that reports driving habits and in some
cases even whether the driver is cruising through unsafe neighborhoods.
Other services allow anxious parents to track a teenager’s driving and
provide a “report card” on use of the family car. A school district in Brazil
goes a step farther: It requires 20,000 grade school students to wear
uniforms embedded with GPS chips similar to those used in pet trackers.
The chips automatically send parents a text message as soon as their

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children enter the school grounds, or if their children are more than 20
minutes late. A Texas school district implemented a similar plan though it
later abandoned the idea and decided to install surveillance cameras on
high school campuses instead.

For all intents and purposes in today’s wired world, consumers can run, but
we can’t hide: If someone wants to know where we are or where we’ve been,
the data are there for the asking. As with web tracking, there is value here:
We can easily identify by looking at hundreds or even thousands of reviews
the best sushi place within a block of our current location, or perhaps get a
heads up on that policeman with the radar gun who is hiding behind that
billboard up the highway. However, this is a mixed blessing if this
information gets into the wrong hands. Consumers need to make tough
tradeoffs between convenience and constant surveillance.

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Market Access

Many of us take for granted that we are free to shop anywhere we want or
that we can easily learn about our purchase options—everything we need is
just a click of a mouse away, right? In reality, however, large numbers of
people can’t make this claim. For one reason or another their market
access (i.e., their ability to find and purchase goods and services) is
limited because of physical, mental, economic, or social barriers.

Disabilities
Disabled people are the largest minority market in the United States. One in
five U.S. adults lives with a disability that interferes with daily life. The
Census Bureau reports that there are 54 million adults with disabilities who
spend almost $200 billion annually, yet companies pay remarkably little
attention to the unique needs of this vast group. Fully 11 million U.S. adults
have a condition that makes it difficult for them to leave home to shop, so
they rely almost exclusively on catalogs and the internet to purchase
products. Many people have limited mobility and are unable to gain easy
access to stores, entertainment venues, educational institutions, and other
locations. Bodily limitations or disfigurements may result in real or
imagined stigmatization, so self-concept and interpersonal relationships
may be problematic. People who rely on wheelchairs for mobility often
encounter barriers when they try to enter stores, move around the aisles, or
enter dressing rooms that are too narrow to accommodate a chair. Others
have mental illnesses, such as excessive anxiety in public places. These
issues touch many of us; for example, 15 percent of Vietnam and 19

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Gulf War veterans have been diagnosed with post-traumatic stress disorder
(PTSD), and 20 percent of veterans who served in Afghanistan and Iraq
have received care at a Veterans’ Administration (VA) facility for the
disorder since their return home. Large numbers of children also encounter
difficulties with market access, whether offline or online.

The good news is that technology holds the potential to improve market
access. Here are a few exciting new developments:

The touch screen is a breakthrough for people who have problems with
motor skills. They no longer need to manipulate a mouse, keyboard, or
pen to use programs. A device like the iPad makes touch-to-speak
technology affordable and easy to use. For example, a person who is
unable to speak can communicate his or her preferences for meals,
activities, and so on just by touching the screen. Other apps amplify
sounds for the hard of hearing, or even encourage children with motor
skills disabilities to engage in physical therapy. The LookTel Money
Reader app makes it possible for blind people to pay for products in
cash; it can “read money” and tell the person the value of the bills he or
she holds.
Dating websites for singles with health problems allow people with an
array of disabilities, including paralysis and multiple sclerosis, to find
partners. Dating 4 Disabled caters to people with physical diseases,
while NoLongerLonely focuses on those with mental illness. Sites like
these and others allow users to be blunt and honest about their own
issues and what they seek in a partner. One site was created by a man
whose brother suffered from Crohn’s disease. He observed, “He was a
good-looking boy, but when do you tell a girl that you have a colostomy
bag? The first date? The third? There’s no good time.”
As the number of people using wheelchairs grows by over two million
per year in the United States alone, the market for adaptive clothing
that provides a broader range of apparel options grows as well. The

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designer Tommy Hilfiger launched a children’s collection that includes
modified closures, adjustability, and alternate options for getting into
and out of the garments.

Food Deserts
The Department of Agriculture defines a food desert as a census tract
where 33 percent of the population or 500 people, whichever is less, live
more than a mile from a grocery store in an urban area or more than 10
miles away in a rural area. Healthy food options in these communities are
hard to find or are unaffordable. Researchers estimate that in the United
States about 23.5 million people live in food deserts.

Some designers are jumping into the growing market for adaptive clothing.
Source: ITAR-TASS News Agency/Alamy Stock Photo.

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Limited access to healthy choices can lead to poor diets and higher levels
of obesity and other diet-related diseases. More broadly, this food
insecurity increases the number of low- and moderate-income families who
struggle to purchase the diet they need to sustain a healthy and active
life.

Literacy
Media literacy refers to a consumer’s ability to access, analyze, evaluate,
and communicate information in a variety of forms, including print and
nonprint messages.

Media literacy empowers people to be both critical thinkers and creative
producers of an increasingly wide range of messages using image,
language, and sound. This movement reminds us that we are bombarded
with thousands of messages every day that espouse a particular point of
view or try to persuade us to buy this or that. It’s our job to critically
evaluate this information and not everyone has the skills to do that. This
task is even more difficult in the age of Google, where many of us assume
that whatever comes up in a Google search or on Wikipedia is completely
true and accurate (Hint: not by a long shot). As the tried-but-true phrase
says, “Caveat Emptor”—let the buyer beware!

Unfortunately, some of us have an even bigger problem than evaluating the
source of a message: We can’t read it in the first place. The U.S.
Department of Education estimates that about one in seven U.S. adults are
functionally illiterate . This term describes a person whose reading
skills are not adequate to carry out everyday tasks, such as reading the
newspaper or the instructions on a pill bottle. Almost half of people in the
United States read below a sixth-grade level.

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This limitation impedes market access for a couple of reasons: First, the
illiterate or “low-literate” consumer is at a disadvantage because he or she
encounters difficulty in learning about the best purchase options. Second,
this person may experience feelings of shame and embarrassment and
avoid market situations where he or she will be forced to reveal the inability
to read a label or other written material. Some of these people (whom
researchers term social isolates) cope with the stigma of illiteracy by
avoiding situations in which they will have to reveal this problem. They may
choose not to eat at a restaurant with an unfamiliar menu, for example.

Low-literate consumers rely heavily on visual cues, including brand logos
and store layouts, to navigate in retail settings, but they often make
mistakes when they select similarly packaged products (for example,
brand line extensions). They also encounter problems with numeracy
(understanding numbers); many low-literate people have difficulty knowing,
for example, whether they have enough money to purchase the items in
their cart and unethical merchants may cheat them out of the correct
amount of change. Not surprisingly, these challenges create an emotional
burden for low-literate consumers, who experience stress, anxiety, fear,
shame, and other negative emotions before, during, and after they shop.

Marketing Pitfall
At both ends of the income spectrum, consumers are
seeking healthier food that is locally produced in order
to reduce the high carbon footprint that results from
extended shipping. We see a growing demand for so-
called superfoods like certain fruits, nuts, and
seaweeds that are “calorie sparse and nutrient dense”
in order to maximize the bang for the buck, nutritionally
speaking. Sometimes we run into problems despite

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the best of intentions. For example, it turns out that
those plastic water bottles that people tote around
instead of sipping “calorie dense and nutrient sparse”
soda aren’t so great after all. Although we may benefit
from drinking water instead of sugary beverages, by
one estimate the energy (and subsequent climate
change) used in the production of these containers is
equivalent to filling them one-quarter full with oil. In
addition the bottles may be transported thousands of
miles on gas-guzzling cargo ships, and then the
discarded bottles can take thousands of years to
decompose. Recently it has been discovered that the
water itself may contain microbits of plastic from the
bottle.

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Sustainability and Environmental
Stewardship

Almost everyone today is concerned about saving our planet. Worries about
climate change, entire species going extinct, widespread exposure to
carcinogens and harmful bacteria, and many other issues are front and
center. The consumer’s focus on personal health is merging with a growing
interest in global health. Some analysts call this new value conscientious
consumerism .

A sustainable business model is not just about “do-gooder” efforts that
reduce a company’s carbon footprint or the amount of plastic that goes
into landfills. Indeed, about six out of every ten companies that convert to a
sustainable business model report that they have profited financially as
well. A triple bottom-line orientation refers to business strategies that
strive to maximize return in three ways:

1. The financial bottom line: Provide profits to stakeholders.
2. The social bottom line: Return benefits to the communities where

the organization operates.
3. The environmental bottom line: Minimize damage to the

environment or even improve natural conditions.

The U.S. Environmental Protection Agency defines the concept this way:
“Sustainability is based on a simple principle: Everything that we need
for our survival and well-being depends, either directly or indirectly, on our
natural environment. Sustainability creates and maintains the conditions

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under which humans and nature can exist in productive harmony, that
permit fulfilling the social, economic and other requirements of present and
future generations.” Some people refer to this way of thinking as cradle to
cradle; the target to aim for is a product made from natural materials that is
fully reusable or recyclable so that the company actually uses zero
resources to make it.

That is a tough goal, but many organizations work hard to get as close to it
as they can—and consumers increasingly take notice. Many of us are much
more mindful of these issues when we shop and when we make decisions
about the foods we eat, the clothes we wear, the buildings in which we live
and work, and the cars we drive. Various surveys conducted recently show
that roughly half or more Americans want to buy eco-friendly products. This
preference is much stronger among young consumers, where 90 percent
say they look at a manufacturer’s reputation for sustainability. And this
focus pays off for companies that are listening: Unilever’s portfolio of 18
“sustainable living” brands are growing 50 percent faster than its other
brands.

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Airinum is one company that is tapping into a desire for functional yet stylish
protective wear as concerns grow about the effects of air pollution on
consumers’ health.
Source: Photo by Alexander Bello for Airinum www.airinum.com. Copyright Airinum AB.

Because sustainability and related issues such as climate change,
pollution, and toxic products are so pervasive, it is important to distinguish
this term from another widely used buzzword: 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. Although some specialized
companies such as Seventh Generation have successfully built a following
around their green products, this strategy has not fared well in recent years.
Nonetheless, there still is demand for environmentally friendly products:
U.S. consumers spend more than $40 billion a year on them. This estimate
includes $29.2 billion for organic food; more than $10 billion for hybrid,
electric, and clean-diesel vehicles; more than $2 billion on energy-efficient

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light bulbs; and $640 million on green cleaning products. However, sales
are flat or lower than in prior years.

A Ford ad in Brazil promotes conservation.
Source: Courtesy of J. Walter Thompson Publicidade LTDA.

Why would this be? We know that consumers increasingly pay more
attention to environmental issues, and many even say they will pay more for
products that manufacturers produce under ethical conditions (e.g., in
humane workplaces and without harmful chemicals). In one typical study,
the researchers gave subjects a description of a coffee company that either
used or did not use Fair Trade principles to buy its beans. They found that
participants were willing to pay an additional $1.40 for a pound of the
coffee if it was ethically sourced and were negative about the company if it
did not adhere to these principles. The study obtained similar results for
shirts that were made with organic cotton.

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Still—as we’ll see in more detail in Chapter 8 —it is common to witness a
disconnect between consumers’ attitudes and their actual behavior. As the
old saying goes, “The road to hell is paved with good intentions.” Despite
consumers’ best intentions to “buy green,” we can point to two major
reasons for the gap between saying and doing:

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“We consume, but at what price? Let’s become human again. Please
donate.” Ad for a Belgian NGO (non-governmental organization) condemning
food industry practices such as the feeding of Thai prawns with poison.
Source: Christophe Gilbert/Marine Vincent & Pierre Jadot.

First, green products are more expensive because the ingredients tend to
cost more than their more conventional counterparts, and transportation
costs are higher too because they are sold in smaller volumes than the big
brands. Although many consumers profess a desire to buy environmentally
friendly products, especially in tough economic times they have a tendency
not to back these preferences with their cash. When the Great Recession hit
in 2008, it took a lot of the steam out of the green movement. For example,
in 2009, S.C. Johnson introduced a line of green products called Nature’s
Source and the company spent more than $25 million to advertise them. By
2010 the company slashed the line’s advertising budget to zero.64

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This ad from The Slovak Republic underscores the growing priority
consumers place upon organic foods.
Source: JANDL marketing a reklama, S.R.O.

Unfortunately, the second reason for the lackluster showing of green
products is largely self-inflicted. Greenwashing occurs when companies
make false or exaggerated claims about how environmentally friendly their
products are. Think about the old story of the “boy who cried wolf ”:
Consumers simply don’t believe most of the green claims companies
make about their brands. Almost one-fourth of U.S. consumers say they
have “no way of knowing” if a product is green or actually does what it
claims. Their skepticism is probably justified: According to one report,
more than 95 percent of consumer companies that market as “green” make
misleading or inaccurate claims. Another survey found that the number of

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products that claim to be green has increased by

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percent since 2009—
but of the products investigated, almost one-third had fake labels, and 70%
made green claims without offering any proof to back them up. One
survey reported that 71 percent of respondents say they will stop buying a
product if they feel they’ve been misled about its environmental impact,
and 37 percent are so angry about greenwashing that they believe this
justifies a complete boycott of everything the company makes.
Greenwashing has impacted many well-known companies. In 2017,
Walmart agreed to pay $1 million to settle claims that allege the nation’s
largest retailer sold plastic products it misleadingly labeled
“biodegradable” or “compostable” in violation of California law.

How can we motivate consumers to practice what they preach? A recent
study of more than 2,000 hotel guests suggests that simply allowing
consumers to pledge to practice sustainable behaviors increases the
likelihood they will follow through. When guests made a specific
commitment at check-in to hang their towels for reuse to reduce laundry
waste (and received a lapel pin to symbolize their commitment), the
number of towels actually hung increased by more than 40 percent. The
researchers estimated the savings at one hotel at over $50,000 and nearly
700,000 gallons of water.

As we saw in Chapter 1 , it is typical to find that a relatively small number
of consumers account for a large amount of the action with regard to a
certain consumption activity or purchase. This certainly is true when we
look at people who walk the walk, in addition to talking the talk, about
modifying their behaviors to help the environment. Marketers point to a
segment of consumers they call 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. These so-called “Lohasians” (others refer to this segment as

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cultural creatives) represent a great market for products such as organic
foods, energy-efficient appliances, and hybrid cars, as well as alternative
medicine, yoga tapes, and ecotourism. One organization that tracks this
group estimates that they make up one in four adult Americans and spend
about $290 billion per year on sustainable products and services.69

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The Dark Side of Consumer
Behavior

A few years ago a crowd assembled for a big holiday sale at a Walmart
store in New York. When the doors opened, the crowd trampled a
temporary worker to death as people rushed to grab discounted
merchandise off the store shelves. A lawsuit filed on behalf of the man’s
survivors claimed that in addition to providing inadequate security, the
retailer “engaged in specific marketing and advertising techniques to
specifically attract a large crowd and create an environment of frenzy and
mayhem.” In subsequent years there have been additional incidents of
trampling and even gunfire as people frantically jockey for position to
scoop up the big sales. Just how far will people go to secure a bargain?

Despite the best efforts of researchers, government regulators, and
concerned industry people, sometimes we are our own worst enemies. We
think of individuals as rational decision makers, who calmly do their best to
obtain products and services that will maximize the health and well-being
of themselves, their families, and their society. In reality, however,
consumers’ desires, choices, and actions often result in negative
consequences to individuals and the society in which they live.

Consumer behavior can be harmful to individuals and
to society.
OBJECTIVE 2-4

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Some of these actions are relatively benign, but others have more onerous
consequences. Harmful consumer behaviors, such as excessive drinking or
cigarette smoking, stem from social pressures. The cultural value many of
us place on money encourages activities such as shoplifting and insurance
fraud. Exposure to unattainable ideals of beauty and success creates
dissatisfaction with our bodies or our achievements. We will touch on
many of these issues later in this text, but for now, let’s review some
dimensions of the “dark side” of consumer behavior.

Consumer Terrorism

The terrorist attacks of 9/11 were a wake-up call to the free-enterprise
system. They revealed the vulnerability of nonmilitary targets and reminded
us that disruptions of our financial, electronic, and supply networks can
potentially be more damaging to our way of life than the fallout from a
conventional battlefield. Assessments by the Rand Corporation and other
analysts point to the susceptibility of the nation’s food supply as a
potential target of bioterrorism . More recently, many concerned
policymakers, executives, and military commanders have added the
prospect of cyberterrorism to the list of pressing concerns, especially in
the light of high-profile attacks on the computer systems of large financial
institutions such as Equifax.

Even before the anthrax scares of 2001, toxic substances placed in
products threatened to hold the marketplace hostage. This tactic first drew
public attention in the United States in 1982, when seven people died after
taking Tylenol pills that had been laced with cyanide. A decade later, Pepsi
weathered its own crisis when more than 50 reports of syringes found in
Diet Pepsi cans surfaced in 23 states. In that case, Pepsi pulled off a
public relations coup de grace by convincing the public that the syringes

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could not have been introduced during the manufacturing process. The
company even showed an in-store surveillance video that caught a
customer slipping a syringe into a Diet Pepsi can while the cashier’s head
was turned. Pepsi’s aggressive actions underscore the importance of
responding to such a crisis head-on and quickly.

Identity fraud is part of the dark side of consumer behavior.
Source: Image courtesy Havas Paris; Chief Creative Officer: Christophe Coffre; Art Director: Catherine Labro; Copywriter: Sylvain

Louradour; Photographer: NICK & CHLOÉ; 3D Illustrator: LES ILLUSIONS chez La manufacture; Actress: Agathe Zalasca (agent

Céline)

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Addictive Consumption

A woman in New Zealand apparently died from drinking too much Coca-
Cola. Her family said she drank about 2.2 gallons of the beverage every day
for years. Prior to her death she had several rotten teeth removed, and she
gave birth to a baby who was born without any tooth enamel. The 31-year-
old mother of eight died following a cardiac arrhythmia after consuming
more than two pounds of sugar and 970 mg of caffeine a day. Coca-Cola
noted that the coroner’s report, while singling out its product as a probable
cause of death, stated that the company “cannot be held responsible for
the health of consumers who drink unhealthy quantities of the product.”

Though we usually equate substance abuse with addiction to alcohol,
drugs, or nicotine, it seems we can become dependent on almost anything
—there is even a Chapstick Addicts support group with 250 active
members! Consumer addiction is a physiological or psychological
dependency on products or services. Many companies profit from selling
addictive products or from selling solutions for kicking a bad habit.

A Chinese man got so upset about the amount of time his adult son spent
playing videogames that he took a novel approach: He hired “digital hit
men” in the form of other gamers to kill off all of his son’s characters in the
games. How is that for “tough love”? Psychologists compare social
media addiction to chemical dependency, to the point of inducing
symptoms of withdrawal when users are deprived of their fix. As one noted,
“Everyone is a potential addict—they’re just waiting for their drug of choice
to come along, whether heroin, running, junk food, or social media.” In

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2018, the World Health Organization classified “gaming disorder” as an
official disease.

Indeed, a survey reported one in three smartphone owners would rather give
up sex than their phones! And, as many of us realize, this fixation grows
by the “enablers” around us as they exhibit the same behavior. Indeed, one
study documented that college students are much more likely to pull out
their phones when someone with whom they were sitting had just done
so. Entrepreneurs are looking at novel ways to “detox” users. One
designer created a series of “substitute phones” that help people put down
the real thing. They allow people to mimic real actions like swiping,
zooming, and scrolling to wean users away. Maybe more of us need this
kind of “intervention”—a Gallup survey reported that 41 percent of American
smartphone owners check their phone every few minutes. Another survey
found that 71 percent of Americans aged 18 and over sleep with their
phones. Oops, time for a fix?

Other problems arise when people become overly involved in playing online
games or posting on social network sites:

In the United Kingdom, a 33-year-old widowed mother let her two dogs
starve to death and neglected her three kids after becoming hooked on
the online game Small World. A judge banned her from going on the
internet. The woman slept only two hours a night as she played the
virtual reality game (in which dwarves and giants battle to conquer the
world) almost nonstop for six months. Her children—aged 9, 10, and 13
—had no hot food and “drank” cold baked beans from tins. When the
family’s two dogs died from neglect, she left their bodies rotting in the
dining room for two months.
A U.S. woman pled guilty to a charge of second-degree murder in the
death of her three-month-old son. The 22-year-old mother lost her

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temper when her child began crying while she was playing FarmVille on
Facebook; she shook the baby until he died.
Cyberbullying refers to the “willful and repeated harm inflicted
through the use of computer, cell phones, and other electronic
devices.” One study reported that one in five middle school students
in the United States were subject to cyberbullying. As one seventh-grade
girl observed, “It’s easier to fight online, because you feel more brave
and in control. On Facebook, you can be as mean as you want.” The
problem has gotten so bad that the U.S. Department of Health and
Human Services even has a website to combat it: Stopbullying.gov.

A government website focuses on the problem of cyberbullying.
Source: StopBullying.gov, U.S. Department of Health & Human Services.

Phantom Vibration Syndrome describes the tendency to habitually
reach for your cell phone because you feel it vibrating, even if it is off or
you are not even wearing it at the time. One researcher reports that 70
percent of people who report heavy usage of mobile devices say they

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experience this phenomenon. The name derives from phantom limb
syndrome, a condition in which someone who has lost a limb
experiences sensory hallucinations that it is still attached to the body
and functioning.

Compulsive Consumption
Some consumers take the expression “born to shop” quite literally. They
shop because they are compelled to do so rather than because shopping is
a pleasurable or functional task. Compulsive consumption 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. One man
diagnosed with compulsive shopping disorder (CSD) bought more than
2,000 wrenches and never used any of them. Therapists report that women
clinically diagnosed with CSD outnumber men by four to one. They
speculate that women are attracted to items such as clothes and
cosmetics to enhance their interpersonal relationships, whereas men tend
to focus on gadgetry, tools, and guns to achieve a sense of power.

One out of 20 U.S. adults is unable to control the buying of goods that he or
she does not really want or need. Some researchers say compulsive
shopping may be related to low self-esteem. It affects an estimated 2 to
16 percent of the adult U.S. population. In some cases, the consumer has
little or no control over his or her consumption, much like a drug addict.
Even the act of shopping itself is an addicting experience for some people.
Three common elements characterize many negative or destructive
consumer behaviors:

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1 The behavior is not done by choice.
2 The gratification derived from the behavior is short-lived.

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Gambling is an example of a consumption addiction that touches every
segment of consumer society. Whether it takes the form of casino
gambling, playing the “slots,” betting on sports events with friends or
through a bookie, or even buying lottery tickets, excessive gambling can be
quite destructive. Taken to extremes, gambling can result in lowered self-
esteem, debt, divorce, and neglected children. According to one
psychologist, gamblers exhibit a classic addictive cycle: They experience a
“high” while in action and depression when they stop gambling, which leads
them back to the thrill of the action. Unlike drug addicts, however, money is
the substance that hard-core gamblers abuse. We can probably expect the
problem to grow as the movement to legalize online gambling in some U.S.
states picks up steam (it already is legal in Nevada, Delaware, and New
Jersey and at least eight other states are looking at it seriously). There is
a built-in market for this new format: Analysts estimate more than 170
million people play simulated casino games on social networks, more than
triple the number of real money online gamblers.

3 The person experiences strong feelings of regret or guilt afterward.

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A French organization combats the sexual abuse of children by online
predators.
Source: Courtesy of Innocence en Danger.

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Consumed Consumers

Consumed consumers are people who are used or exploited, willingly or
not, for commercial gain in the marketplace. Here are some examples:

Prostitutes—Expenditures on prostitution in the United States alone are
estimated at $20 billion annually. These revenues are equivalent to
those in the domestic shoe industry.
Organ, blood, and hair donors—There is a lively global red market
for body parts. By one estimate, you could make about $46 million if
you donated every reusable part of your body (do not try this at
home). In the United States, millions of people sell their blood. A
lively market also exists for organs (e.g., kidneys), and some women
sell their hair to be made into wigs. Bidding for a human kidney on eBay
went to more than $5.7 million before the company ended the auction
(it’s illegal to sell human organs online . . . at least so far). The seller
wrote, “You can choose either kidney. . . . Of course only one for sale, as
I need the other one to live. Serious bids only.” Here is the retail price
for some typical red market transactions in the United States (often
much cheaper elsewhere):

A pint of blood: $337
Hair (for extensions): $308
Cornea: $24,400
Heart: $997,700

Babies for sale—Several thousand surrogate mothers have been paid to
be medically impregnated and carry babies to term for infertile couples.
A fertile woman between the ages of 18 and 25 can “donate” one egg

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every three months and rake in $7,000 each time. Over eight years,
that’s 32 eggs for a total of $224,000. In one case in Germany, police
arrested a couple when they tried to auction their eight-month-old son
on eBay. The parents claimed that the offer, which read “Baby—
collection only. Offer my nearly new baby for sale because it cries too
much. Male, 70 cm long” was just a joke.

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Illegal Acquisition and Product Use

In addition to being self-destructive or socially damaging, many consumer
behaviors are illegal as well. Analysts estimate the cost of crimes that
consumers commit against business at more than $40 billion per year. A
survey the McCann-Erickson advertising agency conducted revealed the
following tidbits:

Ninety-one percent of people say they lie regularly. One in three fibs
about his or her weight, one in four about income, and 21 percent lie
about their age. Nine percent even lie about their natural hair color.
Four out of 10 Americans have tried to pad an insurance bill to cover the
deductible.
Nineteen percent say they’ve snuck into a theater to avoid paying
admission.
More than three out of five people say they’ve taken credit for making
something from scratch when they have done no such thing. According
to Pillsbury’s CEO, this “behavior is so prevalent that we’ve named a
category after it—speed scratch.”

Consumer Theft and Fraud
Who among us has never received an email offering us fabulous riches if
we help to recover a lost fortune from a Nigerian bank account? Of course,
the only money changing hands will be yours if you fall for the pitch from a
so-called advance-fee fraud artist. These con artists have successfully
scammed many victims out of hundreds of millions of dollars. However, a

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small but intrepid group of “counterscammers” sometimes give these
crooks a taste of their own medicine by pretending to fall for a scam and
humiliating the perpetrator. One common strategy is to trick the con artist
into posing for pictures while holding a self-mocking sign and then posting
these photos on internet sites. Both online and offline, fraud is rampant.

Stealing from stores is the most common scam. Someone commits a
retail theft every five seconds. Shrinkage is the industry term for
inventory and cash losses from shoplifting and employee theft. This is a
massive problem for businesses that gets passed on to consumers in the
form of higher prices (about 40 percent of the losses can be attributed to
employees rather than shoppers).

Indeed, shoplifting is fastest-growing crime in the United States. A
comprehensive retail study found that shoplifting is a year-round problem
that costs U.S. retailers $60 billion annually. The most frequently
products stolen are tobacco products, athletic shoes, logo and brand-name
apparel, designer jeans, and undergarments.

And what about shoppers who commit fraud when they abuse stores’
exchange and return policies? Some big companies such as Guess,
Staples, and Sports Authority use new software that lets them track a
shopper’s track record of bringing items back. They are trying to crack
down on serial 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. Retail analysts estimate that about $2 billion of merchandise
that shoppers return after the holiday season alone is for fraudulent
reasons.

Counterfeiting , where companies or individuals sell fake versions of real
products to customers (who may or may not be aware of the switch),

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accounts for more than $461 billion in global losses annually. Many of us
think of counterfeiters as guys who sell faux designer handbags or watches
on the street, but in fact the problem is much more widespread—and often
deadly. About 200,000 people in China die per year because they ingest
fake pharmaceuticals.

Anticonsumption
Some types of destructive consumer behavior are anticonsumption ;
events in which people deliberately deface or mutilate products and
services. Anticonsumption ranges from relatively mild acts like spray-
painting graffiti on buildings and transit vehicles to serious incidences of
product tampering or even the release of computer viruses that can bring
large corporations to their knees. It can also take the form of political
protest in which activists alter or destroy billboards and other
advertisements that promote what they feel to be unhealthy or unethical
acts. For example, some members of the clergy in areas heavily populated
by minorities have organized rallies to protest the proliferation of cigarette
and alcohol advertising in their neighborhoods; these protests sometimes
include the defacement of billboards promoting alcohol or cigarettes.

MyLab Marketing
Visit www.pearson.com/mylab/marketing for Marketing Metrics
questions available only in MyLab Marketing.

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Chapter Summary
Now that you have finished reading this chapter, you should understand
why:

1. Ethical business is good business.
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.
Marketers must confront many ethical issues, especially ones that
relate to how much they make consumers “want” things they don’t
need or are not good for them. A related issue is materialism, which
refers to the importance people attach to worldly possessions, and
the role of business in encouraging this outlook.

2. Marketers have an obligation to provide safe and functional
products as part of their business activities.
It is both ethically and financially smart to maximize customer
satisfaction. In some cases, external bodies such as the government
or industry associations regulate businesses to ensure that their
products and advertising are safe, clear, and accurate. Consumer
behavior researchers may play a role in this process and those who
do transformative consumer research (TCR) may even work to bring
about social change. Companies also play a significant role in
addressing social conditions through their corporate social
responsibility (CSR) practices and social marketing campaigns that
promote positive behaviors.

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3. Consumer behavior impacts directly on major public policy issues
that confront our society.
Our relationships with companies and other organizations are
complex and many issues that impact quality of life relate directly to
marketing practices. These include the trade-off between our privacy
and the ability of companies to tailor their offerings to our individual
needs. Other issues revolve around market access because many
people are unable to navigate the marketplace as a result of
disabilities, illiteracy, or other conditions. In addition, our fragile
environment requires a commitment to sustainable business
practices that attempt to maximize the triple bottom-line that
emphasizes financial, social, and environmental benefits.

4. Consumer behavior can be harmful to individuals and to society.
Although textbooks often paint a picture of the consumer as a
rational, informed decision maker, in reality many consumer
activities are harmful to individuals or to society. The “dark side” of
consumer behavior includes terrorism, addiction, the use of people
as products (consumed consumers), and theft or vandalism
(anticonsumption).

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Key Terms
Adaptive clothing , 47

Anticonsumption , 58

Bioterrorism , 53

Botnets , 45

Business ethics , 34

Cause marketing , 43

Compulsive consumption , 56

Conscientious consumerism , 48

Consumed consumers , 57

Consumer addiction , 54

Consumerspace , 35

Corporate social responsibility (CSR) , 43

Corrective advertising , 41

Counterfeiting , 58

Culture jamming , 42

Cyberbullying, 55

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Cyberterrorism , 53

Economics of information , 38

Food desert , 47

Functionally illiterate , 48

Green marketing , 49

Greenwashing , 52

Identity theft , 45

Locational privacy , 45

Lohas , 53

Market access , 46

Marketplace sentiments , 38

Media literacy , 48

Phantom vibration syndrome , 56

Phishing , 45

Real-time bidding , 45

Recommerce , 62

Red market , 57

Serial wardrobers , 58

Shrinkage , 58

Slacktivism , 43

Social marketing , 43

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Social media addiction , 54

Superfoods , 48

Sustainability , 49

Transformative consumer research (TCR) , 43

Triple bottom-line orientation , 49

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Review
2-1 What are business ethics, and why is this an important topic?
2-2 The economics of information perspective argues that
advertising is important. Why?
2-3 State two important criticisms of marketing and provide the
pros and cons for each.
2-4 Give two examples of important legislation that relate to U.S.
consumers.
2-5 Define social marketing, and give an example of this technique.
2-6 What is the primary difference between transformative
consumer research and other kinds of consumer research?
2-7 Why is market access an important aspect of consumer well-
being? What are some important reasons why consumers can
experience limited market access?
2-8 What is greenwashing, and why is it a problem for marketers?

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Consumer Behavior Challenge

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Discuss

2-9 Internet addiction has been a big headache in South Korea for
several years, where 90 percent of homes connect to cheap, high-
speed broadband. Many young Koreans’ social lives revolve around
the “PC bang,” dimly lit internet parlors that sit on practically every
street corner. A government study estimates that up to 30 percent of
South Koreans younger than 18 are at risk of internet addiction.
Many already exhibit signs of actual addiction, including an inability
to stop themselves from using computers, rising levels of tolerance
that drive them to seek ever-longer sessions online, and withdrawal
symptoms such as anger and craving when they can’t log on. Some
users have literally dropped dead from exhaustion after playing
online games for days on end. How big a problem is internet
addiction here in the United States? Should parents and educators
actively police how much time kids spend online, or if they do so are
they preventing young people from interacting with their peers in the
ways they want?
2-10 Should scientists who study consumer behavior remain
impartial, or is it appropriate for them to become involved in the
topics they research like those who adhere to the transformative
consumer research perspective?
2-11 Today many consumers pursue a “decluttering lifestyle.” Should
marketers encourage this trend toward simplicity even though it
stresses buying less stuff that marketers sell? What marketing
opportunities do you foresee if this trend spreads?
2-12 Because of higher competition and market saturation,
marketers in industrialized countries try to develop third-world

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markets. Asian consumers alone spend $90 billion a year on
cigarettes, and U.S. tobacco manufacturers push relentlessly into
these markets. We find cigarette advertising, which often depicts
glamorous Western models and settings, just about everywhere—on
billboards, buses, storefronts, and clothing—and tobacco companies
sponsor many major sports and cultural events. Some companies
even hand out cigarettes and gifts in amusement areas, often to
preteens. Should governments allow these practices, even if the
products may be harmful to their citizens or divert money that poor
people should spend on essentials? If you were a trade or health
official in a third-world country, what guidelines, if any, might you
suggest to regulate the import of luxury goods from advanced
economies?
2-13 The chapter discusses the practice of serial wardrobing, where
people return an outfit after they wear it for a special occasion such
as a formal. What do you think of this practice? Is it okay to use an
expensive product once and then get your money back?
2-14 A case involving the Wendy’s fast-food chain made national
headlines when a woman claimed she had found a finger in her bowl
of chili. The restaurants became the butt of jokes (some said they
served nail clippers with their food instead of forks), and sales
dropped dramatically at the company’s franchises. This forced
layoffs and reduced hours for many employees—until the woman
was arrested for fraud. Consumers commonly file lawsuits
against companies to claim damages if a product or service didn’t
work as expected. In some cases, the defendant just settles the suit
to make it go away because it costs more to mount a defense than
to just pay damages. Are there too many frivolous lawsuits? Does
our justice system adequately meet the needs of both consumers
and companies in how it awards damages?
2-15 Nonprofit organizations routinely rely on generous corporate
donations, and it’s common to name facilities after benefactors. The

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Nationwide Children’s Hospital in Ohio is no exception; its name
recognizes the insurance company’s $50 million donation. Now the
hospital added the Abercrombie & Fitch Emergency Department and
Trauma Center and there is also the Limited Too & Justice Main
Lobby. The Campaign for a Commercial-Free Childhood opposes
this partnership. The group’s director commented, “Abercrombie &
Fitch is really among the worst of corporate predators. A company
with such cynical disregard for children’s well-being shouldn’t be
able to claim the mantle of healing . . . . And, personally, I find it very
concerning that they named their hospital after an insurance
company.” What do you think? Is this over the line, or does it
matter where the money comes from as long as the end result is
beneficial?
2-16 From time to time advertisers use dark humor to get their
messages across, as when a lonely calorie, repairman, or robot
considers suicide. Or, an ad may imply that shoppers are “mentally
ill” if they pay retail prices. Are these appeals a legitimate way to
communicate a message; if so, under what circumstances?

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Apply

2-17 Will consumers trade lower prices for less privacy? Car owners
now can let insurance companies monitor their driving, using a new
technology, in exchange for lower rates. Customers who sign up for
Progressive’s TripSense program get a device the size of a Tic Tac
box to plug into their cars. The device tracks speed and how many
miles are driven at what times of day. Every few months, customers
unplug the device from the car, plug it into a computer, download the
data, and send the data to the company. Depending on results,
discounts will range from 5 to 25 percent. In Great Britain, a major
insurer is testing a program called Pay as You Drive. Volunteers will
get a device the size of a large smartphone installed in their cars.
The gadget will use global positioning satellite technology to track
where the car goes, constantly sending information back to the
insurance company. Cars that spend more time in safer areas will
qualify for bigger discounts. Of course, the potential downside to
these efforts is that the insurance companies may be able to collect
data on where you have driven, how long you stayed in one location,
and so on. Conduct a poll of ten drivers of various ages in which you
describe these programs and ask respondents if they would
participate to receive a discount on their insurance premiums. What
reasons do they give pro and con?
2-18 Many college students “share” music by downloading clips.
Interview at least five people who have downloaded at least one
song or movie without paying for it. Do they feel they are stealing?
What explanations do they offer for this behavior? Try to identify any
common themes as a result of these interviews. If you were devising

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an ad campaign to discourage free downloading, how might you use
what you have learned to craft a convincing message?

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Case Study Marketing Responsibly: Patagonia Redefines
What It Means to Be Transparent and Authentic

Marketing faces challenges and criticism on many fronts. Apparel and
sporting goods company Patagonia has recently been in the spotlight
because of its work to change perceptions about the role of marketing.

For over 40 years, Patagonia has supplied well-heeled adventurers with all
the gear they need to brave hiking in the Great North Woods, the jungles of
Africa, or the wilds of the suburbs! Products include everything from
fleece jackets and sleeping bags to smoked salmon. Patagonia’s
commitment to corporate social responsibility is embedded in its culture
and has spawned initiatives focused on energy conservation, fair trade,
recycling, and consumerism. In 2011, they even ran an ad on Black
Friday saying “Don’t Buy This Jacket,” encouraging their customers to “buy
less and reflect” before they made a purchase.

In an effort to lower the costs of production, the company has joined many
other apparel providers in moving their production offshore. A
consequence of this strategy is a reduced amount of control over how the
laborers who assemble their products are treated and paid. To address this
issue, Patagonia helped found the Fair Labor Association, an organization
that provides an objective perspective on member companies’ labor
practices. Since 2007, Patagonia has worked diligently, along with
Verite, a nongovernmental organization that works on labor issues to make
improvements in the practices of the company’s first-tier suppliers.
Through these efforts, it was able to reduce the number of first-tier
suppliers from 108 to 75, which improved the company’s ability to have
more control over how these companies treat workers.

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However, in 2011 Patagonia’s own extensive audits uncovered new supply
chain problems with human trafficking, forced labor, and exploitation. They
are now trying to go beyond the gains made in their previous work with the
first-tier suppliers. Their new focus is on suppliers buried more subtly in the
complicated apparel supply chains: mills and suppliers of raw materials.
Patagonia has also asked Verite to help with additional audits.

Why has a company so committed to fair labor practices had so many
problems conquering this issue? A major problem is the very nature of the
apparel supply chain, which is unwieldy and complicated, and spreads
around the globe. Patagonia’s experience demonstrates the challenges of
treating workers fairly at every step of the production process, even when a
company has a very public and sincere desire to do so.

Clearly, the company has a lot at stake because its branding identity is so
closely tied to its leadership in social responsibility. This may be
particularly true with millennials, a key part of Patagonia’s customer base
and a generation that research indicates is particularly concerned about
companies being good corporate citizens.

Patagonia’s efforts seem to be paying off in both social good and in
revenues. CEO Rose Marcario, who leads the corporate social responsibility
(CSR) charge, has seen sales improve fourfold during her decade-long
tenure. Following a decision to give away all of its 2016 Black Friday sales
to environmental organizations, the company signed up 24,000 new
customers. According to Marcario, “Doing good work for the planet creates
new markets and makes [us] more money.”

In addition to its work on fair labor practices, Patagonia has pursued other
CSR (corporate social responsibility) projects. The company launched an
initiative focused on the reuse of clothing, in the first move into what is
being called recommerce . Their Worn Wear program includes options to

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repair older garments or trade them in for new ones. The used clothing is
also resold in the Worn Wear section of Patagonia stores and online. This
program helps to meet sustainability goals and also provides a lower cost
option for the brand sometimes derisively called “Patagucci.” Another
initiative, Patagonia Action Works, pairs Patagonia customers with activist
groups. Patagonia founder Yvon Chouinard says it is “like a dating site” to
bring together individuals and grassroots environmental groups.

Patagonia continues to make CSR a priority, including the difficult struggle
to monitor and actively work to improve conditions throughout every level
of its supply chain.

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Discussion Questions

MyLab Marketing
If your instructor has assigned these, go to the MyLab to complete
these writing exercises.

CS 2-1 Do you believe that consumers consider a brand’s supply
chain ethics when they purchase apparel? Do consumers bear any
responsibility for the ways in which laborers in the apparel
industry are treated?
CS 2-2 Since Patagonia is a higher priced apparel offering, should
the company simply move production back to the U.S.? Would you
be willing to pay a premium for clothing made in the U.S. where
laborers would be protected by U.S. laws? What other factors
related to corporate social responsibility should Patagonia
consider when it makes the onshore/offshore decision?
CS 2-3 How could the efforts of companies like Patagonia affect
CSR efforts in other companies in its industry or in related
industries?

2-19 A hot button topic right now involves efforts to curb
child obesity by encouraging advertisers to limit the
messages they send to kids about foods that are high in
sodium, saturated fat, and added sugars. Under new federal
rules, even the scoreboards in high school gyms will have to
advertise only healthy foods. Several large cities including
New York City and Philadelphia have tried to prevent the sale

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of large sizes of sugary drinks to fight obesity. Public health
advocates hail these attempts, whereas others argue that they
would transform the United States into a “Nanny State” that
imposes on our freedom to choose to consume whatever we
would like. Should city, state, and federal governments
dictate what (legal) products people should consume, even
when the population’s health is at stake?
2-20 Companies and organizations in the United States
spend billions of dollars to acquire and manage data on
consumers such as credit information and transaction
histories. Well-off consumers obviously hold great attraction
to marketers because they have greater buying potential.
Today companies have the ability if they choose to offer a
more attractive deal to higher-value customers to win their
business. The flip side of this process is that potentially they
can discriminate against low-income people who won’t
qualify for lower prices. And in most cases companies don’t
permit consumers to access their database to learn what they
know about them. Is it fair to stratify consumers in this
way so that some get access to more attractive options than
others?

122

123

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Notes
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3. Sarah Landrum, “Millennials Driving Brands To Practice Socially Responsible
Marketing,” Forbes (March 17, 2017),
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4. Michael R. Solomon, Conquering Consumerspace: Marketing Strategies for a
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5. National Religious Partnership for the Environment, www.nrpe.org/.
6. William Leiss, Stephen Kline, and Sut Jhally, Social Communication in
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Jerry Mander, Four Arguments for the Elimination of Television (New York: William
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7. John Kenneth Galbraith, The Affluent Society, Mariner Books; 40th Anniversary
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8. Vance Packard (1957), quoted in Leiss et al., Social Communication, 11.
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10. Leiss et al., Social Communication.
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12. Leiss et al., Social Communication, 11.
13. Emily Steel, “How to Handle ‘IHateYourCompany.com’: Some Firms Buy Up
Negative Domain Names to Avert ‘Gripe Sites,’” Wall Street Journal (September 5,

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2008), http://online.wsj.com/news/articles/SB122057760688302147;
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14. Ariel Sabar, “In Case of Missing Trousers, Aggrieved Party Loses Again,”
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15. Mary C. Gilly and Betsy D. Gelb, “Post-Purchase Consumer Processes and the
Complaining Consumer,” Journal of Consumer Research 9 (December 1982): 323–
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Customer Happy—And Why Marketers Should Care!” Impact (May 2, 2017),
www.impactbnd.com/blog/the-importance-of-keeping-your-customers-happy.

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23. Robbie Brown, Kim Severson, and Barry Meier, “Cruise Line’s Woes Are Far
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DeMotta, Sankar Sen, and Ana Valenzuela. “Consumer Responses to Corporate

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Social Responsibility (CSR) Contribution Type,” Journal of Consumer Research, Vol.
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33. Cf. Philip Kotler and Alan R. Andreasen, Strategic Marketing for Nonprofit
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an Instant,” New York Times (November 17, 2012),

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www.NewYorkTimes.com/2012/11/18/technology/your-online-attention-bought-in-
an-instant-by-advertisers.html.
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microchip; Will Oremus, “Texas School District Drops RFID Chips, Will Track Kids

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With Surveillance Cameras Instead,” Future & Tense (July 17, 2013),
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95. Patrick Di Justo, “How to Sell Your Body for $46 Million,” Wired
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Sponsorships, Critics Dismayed by Association with Racy Retailer Abercrombie &

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Fitch,” Advertising Age (March 12, 2008), www.adage.com.
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Patagonia Blog (November 25, 2011), www.patagonia.com/blog/2011/11/dont-buy-
this-jacket-black-friday-and-the-new-york-times/.
113. Ibid.
114. “Working With Factories,” Patagonia Corporate Website,
www.patagonia.com/working-with-factories.html.
115. Gillian White, “All Your Clothes Are Made With Exploited Labor,” The Atlantic
(June 3, 2015), www.theatlantic.com/business/archive/2015/06/patagonia-labor-
clothing-factory-exploitation/394658/.
116. Ibid.
117. Ibid.
118. Casey Sublett, “Patagonia Consumer Profile,”
https://patagoniabrandaudit.weebly.com/consumer-profile.html.
119. Jeff Beer, “How Patagonia Grows Every Time It Amplifies Its Social
Mission,” Fast Company (February 21, 2018),
www.fastcompany.com/40525452/how-patagonia-grows-every-time-it-amplifies-
its-social-mission.
120. Ibid.
121. Melissa Anders, “Patagonia Steps Up Environmental Activism With ‘Dating
Site’ For Grassroots Projects,” Forbes (February 7, 2018),

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www.forbes.com/sites/melissaanders/2018/02/07/patagonia-steps-up-
environmental-activism-with-dating-site-for-grassroots-projects/#154ad433556a.
122. “Michelle Obama announces new rules for advertising junk food at schools,”
New York Daily News (February 25, 2014),
www.nydailynews.com/news/politics/michelle-obama-announces-new-rules-
advertising-junk-food-schools-article-1.1701140; www.nannystate.com/; Janet
Adamy, “Tough New Rules Proposed on Food Advertising for Kids,” Wall Street
Journal (April 29, 2011), http://professional.wsj.com/article/
NA_EP_PUB:SB10001424052748704330404576291091782255946.html.
123. Natasha Singer, “A Vault for Taking Charge of Your Online Life,” New York
Times (December 8, 2012),
www.NewYorkTimes.com/2012/12/09/business/company-envisions-vaults-for-
personal-ddata.html.

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Section 1 Data Case Analyzing the Athletic Shoe Market

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Background

You are the marketing analyst for an online athletic shoe store. To date,
your company has done little formal marketing research about athletic
shoe buyers in the United States. Using