Consumer and Marketing Misbehavior BABIN / HARRIS CB PART 5 CHAPTER 16 Consumer and Marketing Misbehavior ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Learning Outcomes Understand the consumer misbehavior phenomenon and how it affects the exchange process. 2. Distinguish between consumer misbehavior and consumer problem behavior. 3. Discuss marketing ethics and how marketing ethics guide the development of marketing programs. 4. Comprehend the role of corporate social responsibility in the field of marketing. 5. Understand the various forms of regulation that affect marketing practice. 6. Comprehend the major areas of criticism to which marketers are subjected. 16-2 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Consumer Misbehavior and Exchange Consumer misbehavior—behavior that violates generally-accepted norms of conduct. In order for exchanges to occur in an orderly fashion, the expectations of the consumer, the marketer, and even other consumers must coincide with one another. LO1 16-3 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Focus of Misbehavior: Value Misbehaving consumers seek to maximize the benefits that they receive from an action while minimizing, or eliminating, associated costs. Unfortunately, other consumers suffer while misbehaving consumers break societal norms and laws. LO1 16-4 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Consumer Ethics and Misbehavior Moral beliefs Ethical decision making Consumer behavior/misbehavior LO1 16-5 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Moral Beliefs Beliefs about the perceived ethicality or morality of behaviors. Components: Moral equity—beliefs regarding an act’s fairness or justness. Contractualism—beliefs about the violation of written (or unwritten) laws. Relativism—beliefs about the social acceptability of an act. LO1 16-6 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Ethical Evaluations Deontological evaluations—focus on specific actions. Is this action right? Kant’s Categorical Imperative—one should act in a way that would be considered a universal law for all people facing the same situation. Teleological evaluations—focus on consequences of the behaviors and the goodness or badness of the consequences. How much “good” will result from this decision? Issues considered: Perceived consequences for various stakeholders. Probability of consequences occurring. Desirability of the consequences for the stakeholders. Importance of the stakeholder groups to the consumer. LO1 16-7 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Motivations of Misbehavior Unfulfilled aspirations Thrill-seeking Moral constraints are absent Differential association Pathological socialization Provocative situational factors Opportunism LO1 16-8 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Misbehavior and Problem Behavior Consumer misbehavior—used to describe behavior deliberately harmful to another party in an exchange process. Consumer problem behaviors—refer to behaviors that are seemingly outside of a consumer’s control. Distinguish between the two by considering the issue of self-control. LO2 16-9 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Consumer Misbehavior Shoplifting Computer-mediated behaviors Illegal sharing of software and music Attacks Consumer fraud Abusive consumer behavior Dysfunctional sports behavior Illegitimate complaining Product misuse Aggressive driving Drunk driving Cell phone use in cars LO2 16-10 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Compulsive Consumption Repetitive, excessive, and purposeful consumer behaviors that are performed as a response to tension, anxiety, or obtrusive thoughts. Differs from addictive consumption, which is a physiological dependency on the consumption of a product. Forms: Compulsive buying Compulsive shopping LO2 16-11 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Eating Disorders Binge eating—the consumption of large amounts of food while feeling a general loss of control over intake. Bulimia—includes binge eating episodes followed by self-induced vomiting or purging. Anorexia—the starving of one’s body in the pursuit of “thinness.” LO2 16-12 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Binge Drinking The consumption of 5 or more alcoholic drinks in a single drinking session for males and 4 or more drinks for women. Prevalent among college students. Consequences: Suicide attempts Unsafe sexual practices Legal problems Academic disruptions Death LO2 16-13 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Problem Gambling and Drug Abuse Problem gambling—an obsession with gambling and the loss of control over gambling behavior and its consequences. Also referred to as “pathological gambling.” Drug abuse—both illegal and legal drugs (such as over-the-counter medications and prescription drugs) can become problematic for consumers. LO2 16-14 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Marketing Ethics and Consumerism Marketing ethics—consists of societal and professional standards of right and fair practices that are expected of marketing managers as they develop and implement marketing strategies. Consumerism—a term used to describe the activities of various groups to protect basic consumer rights. Consumer Bill of Rights (1962): The right to safety. The right to be informed. The right to redress and to be heard. The right to choice. LO3 16-15 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Marketing Concept and the Consumer The marketing mix All areas of the marketing mix can be brought into question. Products can be categorized as: deficient, salutary, pleasing, desirable. Consumer vulnerability and harmfulness Public criticism of marketing strategies tends to be most intense when a marketer targets vulnerable consumer groups with harmful products. Employee behavior Morals—personal standards and beliefs that are used to guide individual action. LO3 16-16 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Corporate Social Responsibility An organization’s activities and status related to its societal obligations. Categories of behavior: Ethical duties—acting within expected ethical boundaries. Altruistic duties—giving back to communities through philanthropic activities. Strategic initiatives—strategically engaging in socially responsible activities to increase the value of the firm. Social Marketing Concept—considers not only the wants and needs of individual consumers, but also the needs of society. LO4 16-17 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Regulation of Marketing Activities Sherman Antitrust Act (1890) Federal Food and Drug Act (1906) Clayton Act (1914) Wheeler Lea Act (1938) Fair Packaging and Labeling Act (1966) Child Protection Act (1966) Truth in Lending Act (1968) Consumer Product Safety Act (1972) Children’s Online Privacy Protection Act (1998) Anticybersquatting Consumer Protection Act (1999) Consumer Telephone Records Act (2006) Consumer Product Safety Improvement Act of 2008 Credit Card Accountability, Responsibility, and Disclosure Act 2009 Helping Families Save Their Homes Act 2009 LO5 16-18 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Public Criticism of Marketing Deceptive advertising Puffery Marketing to children Pollution Planned obsolescence True versus artificial needs Manipulative sales tactics Stealth marketing Products liability LO6 16-19 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Product Liability The extent to which businesses are held responsible for product-related injuries. Strict liability—consumers can win a legal action against a firm if they can demonstrate in court that an injury occurred and that the product associated with the injury was faulty in some way. Punitive and compensatory damages. LO6 16-20 ©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.