Consumerism – Issues and Responses:Environmental Concerns, Consumer Privacy

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Consumer Psychology (PSY - 514)

Lecture 44

Consumerism Issues and Responses

Understanding:

Environmental Concerns

Consumer Privacy

Responses to Consumerism

· Legislative Responses

· Business Responses

Marketers Responses

5. Environmental Concerns

Environmentalism in the Middle East

In the Middle East, the earliest known writings concerned with environmental pollution were Arabic medical

treatises written during the "Arab Agricultural Revolution", by writers such as Alkindus, Costa ben Luca, Rhazes,

Ibn Al-Jazzar, al-Tamimi, al-Masihi, Avicenna, Ali ibn Ridwan, Isaac Israeli ben Solomon, Abd-el-latif, Ibn al-

Nafis.

They were concerned with air contamination, water contamination, soil contamination, solid waste mishandling,

and environmental assessments of certain localities.

Europe and USA

In Europe, it was the Industrial Revolution that gave rise to modern environmental pollution as it is generally

understood today. The emergence of great factories and consumption of immense quantities of coal and other

fossil fuels gave rise to unprecedented air pollution and the large volume of industrial chemical discharges added to

the growing load of untreated human waste. Environmentalism grew out of the movements, which were a reaction

to industrialization, the growth of cities, and worsening air and water pollution.

In the United States, the beginnings of an environmental movement can be traced as far back as 1739, when

Benjamin Franklin and other Philadelphia residents, citing "public rights," petitioned the Pennsylvania Assembly to

stop waste dumping and remove tanneries from Philadelphia's commercial district

Popular Environment Movement

The 1990's was the decade of the environment. The "Green Movement" is a term borrowed from the name given

to Germany's radical environmentalists. Green movement is growing significantly and marketers are seeking to

cash in on an environmental awakening

Environmentalists A New Culture

Environmentalist action has recently led to the development of a new subculture. It is mainly composed of the

educated middle and upper-class. These environmentally conscious types take special pride in their sustainable

consumption patterns, shopping at grocery stores that trumpet earth-friendliness (such as Whole foods) and

buying organic products.

Some environmentalists complain that this group of elites is shopping under the banner of environmentalism

without espousing any of its true ideals. Because organic and sustainable products are often more expensive,

purchasing them has become a mark of wealth... is another form of pretension,

6. Consumer Privacy

Consumer information collected, merged and exchanged through computer and communication technologies has

become the main resource that businesses and governments use to facilitate millions off transactions that engaged

in by the consumers. Timely accurate and complete information is needed by a variety of organizations such as

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Consumer Psychology (PSY - 514)

banks, retailers, commercial lenders, mortgage lenders, financial services institutions, direct response marketers,

advertising agencies, insurance companies and public utilities.

The purposes of consumer information may include such things as approving or denying credit , issuing credit

cards, writing insurance policies, selecting people for direct mail solicitation, preventing fraud, determining

eligibility for government aid, investigating and law enforcement purposes, and many other activities

Information given for one purpose credit, insurance, employment, organizational memberships, publication

subscriptions, charitable donations.etc is being widely used for other commercial purposes without the individuals'

knowledge or consent

Responses to Consumerism

Responses to consumerism may be understood in the following two main areas:

1) Legislative Responses

2) Business Responses

3) Marketers Responses

1) Legislative Responses

Historically legislation was oriented towards protecting competition and competitors rather than consumers. These

days a large number of legislative attempts are being made by governments supported by the civil society

organizations to support consumer rights.

2) Business Responses

The social and ethical responsibility of businesses has become a topic of much public debate. Many corporations

have responded to their critics. These responses have three characteristics:

Changes in Board of Directors

More emphasis upon Ethics

Use of social performance disclosures

Changes in Board of Directors Many board of directors now include outside directors such as influential

academics, minority and religious leaders, who give society's views during decision making. Social responsibility

and profits often complement each other. Some of the most profitable companies are often named as being the

most socially responsible

More emphasis upon Ethics Corporate Ethics are difficult to define because they relate to individual

philosophies and values. There however, needs to be an ethical base for making marketing decisions. There are a

variety of theories that are relevant to marketing and consumer behavior. Two approaches are, however, most

common:

Relative Standards

Absolute Standards

Relative Standards or Situation Ethics

This also known as situation ethics or speculative philosophy. According to this view Ethics are subjective,

situational, culturally determined and autonomous they are developed by the people on the basis of human

experience. According to relative standards, correctness of a specific action depends upon specific circumstances

involved.

Two forms of situational ethics have been important:

Utilitarianism: Looks at the consequences of an act to decide whether it is morally right. This approach

strives to achieve the most good for the greatest number of people

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Consumer Psychology (PSY - 514)

Institutionalism: Institutionism uses and individual's conscience to decide whether an act is ethical. This

approach strives to satisfy individual's own feelings about right and wrong

Objections to Situation Ethics

There may be little agreement among the people as to what is morally correct thing to do. Decisions may appear to

be arbitrary due to different situations. There may be uncertainty about the moral correctness of the decisions

because of changing values over time.

Absolute Standards

Absolute Standards is known as moral idealism or moral revelation. The correctness of action depends upon

permanent, rigid, universal rules or moral ideas which are to be applied whatever the circumstances. Such an

approach is recommended by many philosophers today. It is upon such universals that businesses, marketers, and

consumers ethical philosophy must be built.

Sometimes consumers take extremely novel responses to resolve their perceived injustices include e.g. one fellow

burned his car on the front doorstep of a manufacturer because he was disappointed in it. A citizen smashed a

vending machine with a fire axe when failed to function properly

3) Marketers' Responses

The number and seriousness of consumer problems suffered by general population is not significant. Only a small

vocal minority of consumers complain about the problems they experience with products and services. Great

majority of those complaints are registered about products and services are resolved to the satisfaction of

consumers.

Business people must educate the public about the operation of the marketing system, the benefits of free

enterprise, etc... They need to assess and modify their policies and practices to improve products and services

offered to consumers. This highlights the need for an effective Consumer Response System that draws from the

following features

Understanding what consumers experience

Establishing a Consumer Advisory Board

Listening to consumers and responding effectively

Establishing corporate consumer affairs units

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