Misleading Marketing Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg, CANADA https://abem.uwinnipeg.ca s.singh@uwinnipeg.ca https://www.abem.ca/conference

Misleading Marketing Negligent Consumer Blame Game Misleading Marketing Negligent Consumer 2

Misleading Marketing! 3

Product Misuse i.e., Negligent Consumer Behavior?! 4

Both at fault! So, we can recall products or issue refunds 5

But, we cannot recall negligent consumers if Injuries result from misuse of a safe product (and NOT from product defects). So, the most dangerous component is the consumer  no way to recall them In which case, marketers may be right! 6

But consumers may not be negligent, if ↓ Literacy, ↓ Education Neither compulsory nor readily available ↓ Access to legal remedies  Better Business Bureau Unaware of legal rights Rural communities ↓ Freedom of expression ↓ Access to media So, we need to judge veracity of marketing claims 7

Usually, marketers make 3 kinds of claims ① Search Claims ② Experience Claims ③ Credence Claims 8

① Search Claim: Brand X margarine comes in a convenient plastic tub 9

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What you ordered What you received # 11

② Experience Claim: Brand Y margarine tastes like butter 12

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③ Credence Claim: Brand X margarine contains Cholesterol 17

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Problem is with the implied claim Literal claim Most of us agree on its direct interpretation Implied claim Different people may interpret differently 26

For example, people may think: Brand X is the only margarine with 0% cholesterol Brand X is a suitable food for those concerned about heart disease Brand X is better than butter for those concerned about heart disease 27

How to classify a claim? n-% theory what proportion of the audience must draw a false inference before the advertisement may be classified as misleading. No for USA = 15-25% ?? Middle East = ?? Africa = ?? Emerging Markets = ?? 28

How to evaluate a claim? Credibility Prominence of advertiser e.g. TV, Network Magazine of ↑ circulation Verifiability Could the claim be evaluated within a month of purchase 29

Schechter’s Approach to Evaluating Claims Misleading, if n = ?? HI n > 50% n > 25% standard Verifiability n > 25% standard n > 5% LO LO Credibility HI 30

But, how serious is the injury if misled? 31

Seriousness of injury for being misled could be substantial Average cost of deliveries (US$) Seriousness of injury for being misled could be substantial Figures from 2013 insurance company payments (not billed charges)

Caesarean section rates 32