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ConsumerBehavior:Buying,Having,andBeingTwelfthEditionChapter2ConsumerandSocialWell-BeingCopyright©2017,2015,2013PearsonEducation,Inc.

AllRightsReserved.LearningObjectives2.1Ethicalbusinessisgoodbusiness.2.2Marketershaveanobligationtoprovidesafeandfunctionalproductsaspartoftheirbusinessactivities.

2.3Consumerbehaviorimpactsdirectlyonmajorpublicpolicyissuesthatconfrontoursociety.2.4Consumerbehaviorcanbeharmfultoindividualsandtosociety.LearningObjective2.1Ethicalbusinessisgoodbusiness.MarketingEthicsandPublicPolicyBusinessethicsarerulesofconductthatguideactionsinthemarketplaceThereareculturaldifferencesinwhatisconsideredethical.NeedsandWantsConsumerspaceMaterialismProvenanceCurationDoMarketersManipulateConsumers?AdvertiserssimplydonotknowenoughaboutpeopletomanipulatethemDoMarketersCreateArtificialNeeds?Objectiveofmarketing:createawarenessthatneedsexist,nottocreateneedsNeed:abasicbiologicalmotiveversusWant:onewaythatsocietyhastaughtusthattheneedcanbesatisfiedSampleofFederalLegislationIntendedtoEnhanceConsumers’Welfare(1of2)Table2.1SampleofFederalLegislationIntendedtoEnhanceConsumers’WelfareYearActPurpose1953FlammableFabricsActProhibitsthetransportationofflammablefabricsacrossstatelines.1958NationalTrafficandSafetyActCreatessafetystandardsforcarsandtires.1958AutomobileInformationDisclosureActRequiresautomobilemanufacturerstopostsuggestedretailpricesonnewcars.1966FairPackagingandLabelingActRegulatespackagingandlabelingofconsumerproducts.(Manufacturersmustprovideinformationaboutpackagecontentsandorigin.)

1966ChildProtectionActProhibitssaleofdangeroustoysandotheritems.

1967FederalCigaretteLabelingand

AdvertisingActRequirescigarettepackagestocarryawarninglabelfromtheSurgeonGeneral.

1968Truth-in-LendingAct

Requireslenderstodivulgethetruecostsofacredittransaction.1969NationalEnvironmentalPolicyActEstablishedanationalenvironmentalpolicyandcreatedtheCouncilonEnvironmentalQualitytomonitortheeffectsofproductsontheenvironment.

1972ConsumerProductsSafetyActEstablishedtheConsumerProductSafetyCommissiontoidentifyunsafeproducts,establishsafetystandards,recalldefectiveproducts,andbandangerousproducts.

SampleofFederalLegislationIntendedtoEnhanceConsumers’Welfare(2of2)[Table2.1continued]Year

Act

Purpose

1975ConsumerGoodsPricingActBanstheuseofpricemaintenanceagreementsamongmanufacturersandresellers.1975Magnuson-MossWarrantyImprovementAct

CreatesdisclosurestandardsforconsumerproductwarrantiesandallowstheFederalTradeCommissiontosetpolicyregardingunfairordeceptivepractices.

1990TheNutritionLabelingand

EducationActReaffirmsthelegalbasisfortheFoodandDrugAdministration’snewrulesonfoodlabellingandestablishesatimetablefortheimplementationofthoserules.

1998InternetTaxFreedomAct

EstablishedamoratoriumonspecialtaxationoftheInternet,includingtaxationofaccessfeespaidtoAmericaOnlineandotherInternetServiceProviders.2010Dodd-FrankWallStreetReformandConsumerProtectionActPromptedbytherecessionthatbeganin2008,intendstopromotethefinancialstabilityoftheUnitedStatesbyimprovingaccountabilityandtransparencyinthefinancialsystem,toend“toobigtofail,”toprotecttheAmericantaxpayerbyendingbailouts,andtoprotectconsumersfrom

abusivefinancialservicespractices.AreAdvertisingandMarketingNecessary?Doesadvertisingfostermaterialism?ProductsaredesignedtomeetexistingneedsAdvertisingonlyhelpstocommunicatetheiravailabilityForReflection(1of4)Advertisersareoftenblamedforpromotingamaterialisticsocietybymakingtheirproductsasdesirableaspossible.Doyouagreewiththis?Doyouagreewiththis?Ifyes,ismaterialismabadthing?Ifno,whatareyourreasons?LearningObjective2.2Marketershaveanobligationtoprovidesafeandfunctionalproductsaspartoftheirbusinessactivities.CoursesofActionVoicePrivateThird-PartyResponseConsumers’RightsandProductSatisfactionMarketRegulationCorrectiveadvertisingConsumerismCulturejammingU.S.RegulatoryAgenciesandResponsibilitiesTable2.2U.S.RegulatoryAgenciesandResponsibilitiesRegulatoryagency

Responsibilities

ConsumerProductSafetyCommission(CPSC)

Protectsthepublicfrompotentiallyhazardousproducts.Throughregulationandtestingprograms,theCPSChelpsfirmsmakesuretheirproductswon’tharmcustomers.

EnvironmentalProtectionAgency(EPA)

Developsandenforcesregulationsaimedatprotectingtheenvironment.Suchregulationshaveamajorimpactonthematerialsandprocessesthatmanufacturersuseintheirproductsandthusontheabilityofcompaniestodevelopproducts.

FederalCommunicationsCommission(FCC)

Regulatestelephone,radio,andtelevision.FCCregulationsdirectlyaffectthemarketingactivitiesofcompaniesinthecommunicationsindustries,andtheyhaveanindirecteffectonallfirmsthatusebroadcastmediaformarketingcommunications.

FederalTradeCommission(FTC)

Enforceslawsagainstdeceptiveadvertisingandproductlabelingregulations.MarketersmustconstantlykeepabreastofchangesinFTCregulationstoavoidcostlyfines.

FoodandDrugAdministration(FDA)Enforceslawsandregulationsonfoods,drugs,cosmetics,andveterinaryproducts.Marketersofpharmaceuticals,over-the-countermedicines,andavarietyofotherproductsmustgetFDAapprovalbeforetheycanintroduceproductstothemarket.

InterstateCommerceCommission(ICC)

Regulatesinterstatebus,truck,rail,andwateroperations.TheabilityofafirmtoefficientlymoveproductstoitscustomersdependsonICCpoliciesandregulation.

TransformativeConsumerResearchTCRpromotesresearchprojectsthatincludethegoalofhelpingpeopleorbringingaboutsocialchangeSocialmarketingstrategiesusemarketingtechniquestoencouragepositivebehaviorssuchasincreasedliteracyandtodiscouragenegativeactivitiessuchasdrunkdrivingSocialMarketingandCorporateSocialResponsibility(CSR)SocialMarketingencouragespositivebehavioranddiscouragesnegativeactivities.CSRistheprocessofencouragingorganizationstomakeapositiveimpactonstakeholdersCausemarketingisastrategythatalignsbusinesseswithacause.TopCauseMarketersYoplaitSusanGKomenGeneralMillsP&GRED BoxtopsforEducationKellogg’sCampbell’sGirlScoutsDawnForReflection(2of4)Doyoupurchaseacertainproductbecauseoftheircause?Why?Doyouthinkorganizationssupportacauseforprofitsorbecausetheywanttobeactiveintheircommunity?LearningObjective2.3Consumerbehaviorimpactsdirectlyonmajorpublicpolicyissuesthatconfrontoursociety.DataPrivacyandIdentityTheft(1of2)Identitytheftoccurswhensomeonestealsyourpersonalinformationandusesitwithoutyourpermission.ThePersonalDataNotification&ProtectionActof2015TheStudentDigitalPrivacyandParentalRightsActof2015RealtimebiddingPhishingBotnetsLocationalPrivacyDataPrivacyandIdentityTheft(2of2)MarketAccessDisabilitiesFooddesertsMedialiteracyFunctionallyilliterateAtriplebottom-lineorientationreferstobusinessstrategiesthatstrivetomaximizereturninthreeways:FinancialSocialEnvironmentalSustainabilityandEnvironmentalStewardship(1of2)SustainabilityandEnvironmentalStewardship(2of2)SustainabilityConscientiousconsumerismGreenMarketingandGreenwashingTable2.4LOHASMarketSectors(1of3)Table2.4LOHASMarketSectorsPersonalHealthGreenBuilding$117billion$100billionNatural,organicproducts

Homecertification

Nutritionalproducts

EnergyStarappliances

Integrativehealthcare

Sustainableflooring

Dietarysupplements

Renewableenergysystems

MindbodyspiritproductsWoodalternativesTable2.4LOHASMarketSectors(2of3)[Table2.4continued]EcoTourismNaturalLifestyles

$42billion$10billionEco-tourismtravelIndoor&outdoorfurnishings

Eco-adventuretravelOrganiccleaningsuppliesBlankCompactfluorescentlightsBlankSocialchangephilanthropyBlankApparelTable2.4LOHASMarketSectors(3of3)[Table2.4continued]AlternativeTransportationAlternativeEnergy$20billion$1billion

HybridvehiclesRenewableenergycreditsBiodieselfuelGreenpricingCarsharingprogramsBlankSource:

accessedMarch2,2013.ForReflection(3of4)Wouldyouprefertopurchasefromarestaurantt