In the Name of Allah, The Most Beneficent, The Most Merciful

Consumer Behavoiur

SESSION 2
BY
Khurram NasarullahKhan
 CHAPTER 2
Revision of few concepts

Consumer and
Social Well-Being
 Learning Objective 1
Business Ethics
Ethical business is good
business.

Copyright © 2017 Pearson Education, Inc. 2-4

 Learning Objective 1
Business Ethics
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? 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.
Copyright © 2017 Pearson Education, Inc. 2-5
 Learning Objective 1
Business Ethics
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? 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.
Copyright © 2017 Pearson Education, Inc. 2-6
 Marketing Ethics and Public Policy
• Business ethics are rules of
conduct that guide actions
in the marketplace.

• There are Cultural, People

and Organizational
differences in what is
considered ethical.
 Principles of Business Ethics
These universal values
include:
• honesty, • integrity,
• trustworthiness, • concern for others,
• fairness, • accountability, and
• respect, • loyalty.
• justice
Principles of Business Ethics
 Marketspace vs Consumerspace
• Marketspace: Who controls the market -companies
or consumers?
• In old days, company decided what they wanted
their customers to know and do. But not any more.
• Now consumers decide and dictates companies
what, why, when and how they will buy things.
• They have created their own Consumerspace.
• Now customers create and run the markets.

• Are Marketers promoting Materialism and

destroying societal values?
• Do we buy cars to travel or to make people jealous?
Consumer Rights
 Do Marketers Manipulate Consumers?

Advertisers simply do not know enough

about people to manipulate them.
Or do they ?
 Do Marketers Create Artificial Needs?
Objective of marketing: create awareness that
needs exist, not to create needs

• Want: one way that society

• Need: a basic biological versus has taught us that the need
motive can be satisfied

Thirst is a biologically based need.

Marketers teach us to want Coca-Cola
to satisfy that thirst rather than, say,
drink water.
 Sample of Federal Legislation Intended to
Enhance Consumers’ Welfare

2-14 Copyright © 2017 Pearson Education, Inc.

 Are Advertising & Marketing Necessary?
Does advertising foster materialism?

• Products are designed to meet existing

needs.

• Advertising only helps to communicate

their availability .

• The economics of information

perspective regards advertising as an
important source of consumer learning.
 For Reflection

Advertisers are often blamed for

promoting a materialistic society
by making their products as
desirable as possible.

• Do you agree with this?

o If yes, is materialism a bad thing?
o If no, what are your reasons?
 Learning Objective 2
Marketers have an obligation to provide
safe and functional products as part of
their business activities.

Products meet existing needs, and

marketing activities only help to
communicate their availability.
 Courses of Action
If Customer is not happy, he/She can do
the followings:
• Voice [You can appeal directly to the
retailer for redress (e.g., a refund)]
• Private Response [You can express your
dissatisfaction to friends and boycott
the product or the store where you
bought it.]
• Third-Party Response [you can take
legal action against the merchant,
register a complaint with the Better
Business Bureau, or write a letter to https://www.cap.org.pk/
the newspaper.] https://www.facebook.com/ConsumersAssociationofPakistan/
 Consumers’ Rights and Product
Satisfaction
• Market Regulation
o Corrective advertising: It
is effective in undoing the
damage of a deceptive
ad, both in attitudes and
"intentions to buy".

• Consumerism
o Culture jamming: It refers
to the creation of images
or practices that force
viewers to question the
status quo.
U.S. Regulatory Agencies and
Responsibilities
 Transformative Consumer Research
• TCR promotes research projects that
include the goal of helping people or
bringing about social change.

• Social marketing strategies use

marketing techniques to encourage
positive behaviors such as increased
literacy and to discourage negative
activities such as drunk driving
 Social Marketing and Corporate Social
Responsibility (CSR)
• Social Marketing encourages positive
behavior and discourages negative activities.

• CSR is the process of encourage organizations

to make a positive impact on stakeholders

• Cause marketing is a strategy that aligns

businesses with a cause.
 Top Cause Marketers

• Yoplait • Boxtops for Education

• Susan G Komen • Kellogg’s
• General Mills • Campbell’s
• P&G • Girl Scouts
• RED • Dawn

2-23 Copyright © 2017 Pearson Education, Inc.

 For Reflection
• Do you purchase a
certain product
because of their cause?
Why?

• Do you think
organizations support a
cause for profits or
because they want to
be active in their
community?
 Data Privacy and Identity Theft
• Identity theft occurs when someone
steals your personal information and
uses it without your permission.
• Facebook Issues:
• Photo Tagging
• Given users’ data to Cambridge Analytica
• Millions of accounts Hacked & Data Leaked

• The Personal Data Notification &

Protection Act of 2015

• The Student Digital Privacy and Parental

Rights Act of 2015
 Data Privacy and Identity Theft
• One of the biggest ethical issues many
marketers face today relates to:
• how much they can—or should—know
about their customers.

• 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.”

• You are being watched all the time!

 Data Privacy and Identity Theft

• Real time bidding: Your digital actions have actual

financial value.
• Electronic trading system that sells ad space on the
webpages people click on at the moment they visit them.
• Spray and Pray ads approach. [Gunshots]
• Identity theft occurs when someone steals your
personal information and uses it without your
permission.
• Phishing: people receive fraudulent emails that ask
them to supply account information.
• Botnets: a set of computers that are penetrated by
malicious software known as malware
• Locational Privacy: GPS-enabled phones leave
nothing to chance. We are vulnerable.
 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?
• Large numbers of people don't have the
access to market.

• Disabilities: 11 million U.S. adults have a

condition that makes it difficult for
them to leave home to shop.

• But technology holds the potential to

improve market access to people.
 Market Access
• Food deserts: distance from a grocery store is
1 mile in an urban area or more than 10 miles
away in a rural area.
• In US 23.5 million people live in food deserts

• Media literacy: consumer’s ability to access,

analyze, evaluate, and communicate
information.[info Bombardment vs info.
Evaluation]

• Functionally illiterate: one in seven U.S.

adults are functionally illiterate [don’t know
how to read and write].
 Sustainability and Environmental Stewardship

• Sustainability: People, Profit and Planet

• creates and maintains the conditions under
which humans and nature can exist in productive
harmony, that permit fulfilling the social,
economic and other requirements of present and
future generations.
• aim is to create products from natural materials
that are fully reusable or recyclable.
• 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.
 Sustainability and
Environmental Stewardship
A triple bottom-line orientation refers to
business strategies that strive to maximize
return in three ways:

• Financial [bring profits to stakeholders]

• Social [Return benefits to the communities]

• Environmental [Minimize damage / bring

improvement to the environment]
 Green Marketing and Greenwashing
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.

Greenwashing occurs when companies

make false or exaggerated claims about
how environmentally friendly their
products are.
According to one report, more than 95 % of consumer companies that
market as “green” make misleading or inaccurate claims.
 Learning Objective 3

Consumer behavior
impacts directly on major
public policy issues that
confront our society.
 Table 2.4 LOHAS Market Sectors

LOHAS:
lifestyles of health and sustainability.

They 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.

They prefer products such as organic foods,

energy-efficient appliances, and hybrid cars, as
well as alternative medicine, yoga tapes, and
ecotourism.
 For Reflection

• Would you prefer to

purchase from a
restaurant that
composts?

• What are some

sustainable methods
used in your workplace?
 Consumer Terrorism
• Bioterrorism
• Assessments by the Rand Corporation
and other analysts point to the
susceptibility(weaken) of the nation’s
food supply as a potential target of
bioterrorism.
• Cyberterrorism
• high-profile attacks on the computer
systems of large financial institutions
and various supply chain systems.
• Guerrilla marketing
 Learning Objective 4
Consumer behavior can be harmful to individuals
and to society.
Three common elements characterize many
negative or destructive consumer behaviors:
1. The behavior is not done by choice.
2. The gratification derived from the behavior is
short-lived.
3. The person experiences strong feelings of
regret or guilt afterward.
 Addictive Consumption
• Consumer addiction: It is a physiological or psychological
dependency on products or services.
• Mother died with drinking too much Coke
• Store stampede at Walmart in NY

• Social media addiction: chemical dependency, to the point of

inducing symptoms of withdrawal when users are deprived of
their fix.
• Everyone is a potential addict either Junk food or social media.
• Entrepreneurs are looking at novel ways to “detox” users. e.g. Substitute
phones.
• Cyberbullying: willful and repeated harm inflicted through the
use of computer, cell phones, and other electronic devices

• Phantom Vibration Syndrome: 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

• Compulsive consumption: repetitive and often excessive

shopping performed as an antidote to tension, anxiety,
depression, or boredom. Otherwise known as Shopaholics.
Compulsive shopping disorder (CSD).
 Dark Side of CB
Consumed consumers
• Illegal acquisition and product use
o Consumer theft and fraud
-Shrinkage: - inventory and cash losses from shoplifting
and employee theft.
-Serial wardrobers: serial wardrobers who buy, use it
once, and return it;
- customers who change price tags on items, then
return one item for the higher amount;
- shoppers who use fake or old receipts when they
return a product
-Counterfeiting: companies or individuals sell fake
versions of real products to customers (who may or may
not be aware of the switch)
• Anti-consumption: events in which people deliberately
deface or mutilate(vandalism- Spray paint on Ads) products
and services.
THANK YOU