Using social and consumer values to predict market‐place behaviour: questions of congruency

Social values and consumption values, although intricately linked, are not exactly the same. Nonetheless, marketers contend that the central premise of social value monitoring is that, if one understands people’s values, one can better predict how they will behave in the market‐place. This paper challenges this assumption because policy analysts and industries are relying on both the consumer and social value profiles at a time when society and the market‐place are undergoing a profound transition. Using Canada as a case study, the general societal values of consumers identified by pollsters are discussed relative to nine consumer values espoused by marketers. This comparative analysis suggests that many of Canadians’ alleged consumer values seem to be in direct conflict with their espoused social values. This conclusion implies that the validity of using social values as a proxy variable or predictor for consumer values needs to be examined by researchers and policy analysts. Also, future dialogue needs to occur about adhering to the convention of monitoring social and consumer values using public opinion polls while not marrying this process with public judgement dialogues. Finally, other countries are urged to examine the situation in their market‐place so as to facilitate cross‐cultural comparative analysis of consumer market‐place values.     

Economics of Consumer Class Actions*

The consumer class action has been hailed as the ultimate consumer remedy. It permits economies of scale in some legal proceedings which may benefit the consumer. Moreover, government agencies will not ordinarily bring suit on behalf of one of these consumers but they will, in some cases, sue on behalf of the class. In the case of a harmful commodity, if a class action is successfully adjudicated disutility is lowered for those harmed and social benefits (i.e., collective benefits) may accrue in some measure to those for whom damage was averted. Whether in the short run or the extent to which in the long run prices will be increased as a result of the adjudication of a class action depends upon the degree of competition in the market in which the producing firm operates and on the level and elasticity of the relevant supply and demand curves for the product subsequent to the suit. Even without suit being brought the effect of the threat posed by the availability of the consumer class action will be a shift to a higher quality of product and more non-price competition on the basis of quality or at least a reduction of fraud and of harmful product attributes. The overall effect of the class action being available as a legal tool should be a better performing market and better performing agencies serving the consumer. Though consumer economic welfare will not always be increased through the use of the class action, its increased use is important if we are to have a more equitable economy.     

Consumer Policy in a Market Economy Considerations from the Perspective of the Economics of Information,the New Institutional Economics as well as Behavioural Economics

The question concerning when a governmental intervention in the market system is justified has occupied economists from the very beginning and has been a controversial discussion topic for just as long. Against this background, with respect to modern consumer policy, which still represents a relatively young field in the theory of economic policy, it is vital to find sound economic reasons for governmental regulations in order to protect consumers. Therefore, the article attempts to assess what the various economic literatures have added to our understanding of good consumer policy. For this reason, those policy implications that might flow from different theoretical approaches in order to broaden the foundation of an economic justification for consumer policy will be analysed. For this purpose, the consumer policy implications of the Economics of Information will be described, including a denomination of some certain problems all of which are not covered satisfactorily by this approach. Subsequently and in order to amend the informational economics framework, further economical approaches from New Institutional Economics, Behavioural Economics as well as Behavioural Consumer Research, which provide a complementary analysis of consumer behaviour in consideration of the respective decision-making situations and determining constraints (formal and informal rules, cognitive and emotional boundaries), will be discussed comparatively with respect to their consumer policy implications.     

Better to shop than to vote?

This paper begins by reflecting on the current generalised political apathy signalled by low voter turnout and falling party membership. It would appear that people are exercising political choices not at the ballot box but by means of consumer activism. Corporations respond to consumer pressure in a way that governments do not, and are gradually assuming the role of global political actors. But this is a dangerous state of affairs for several reasons. In the first place, social welfare can never be the core activity of corporations. Corporate social motives are commercial, and there is a danger that their social policy decisions will be driven by the logic of the market place rather than social need. Recession, for instance, will curtail their social responsiveness, as will decisions to relocate. It is also the case that partnerships between governments and corporates run the risk of removing checks on the growth and abuse of corporate power. And finally, what price does society have to pay for the growth of corporate benevolence?     

Effective Paths for Consumer Empowerment and Protection in Retail Energy Markets

Consumer empowerment and protection are frequently discussed in contemporary energy policy debates. The process of consumer empowerment through information and consumer education has great potential, yet consumer switching as the concomitant outcome of this process remains low. Additional protection for vulnerable consumers is called for. This article is centred on the path to achieving consumer empowerment and protection. In particular, it stresses that empowerment should be viewed as a long-term process. Regulators should not focus on the mere outcome of switching and adopt remedies aimed at changing consumer behaviour in the short term. The discussion highlights how attempts to protect vulnerable consumers through an ancillary application of competition law distort the competitive process and should be avoided. Personal vulnerabilities, such as low income, can be better tackled with targeted social policy measures, whereas instances of vulnerabilities pertaining to the market context, such as difficulties in assessing different energy offers, are better phased out through the market mechanism.     

Zielsetzungen und Instrumentarien der europäischen Verbraucherrechtspolitik: Eine Analyse von Entwicklungen im Bereich des Zivilrechts

Objectives and instruments of European consumer policy: An analysis of developments in the area of civil law. The paper discusses the relationships and conflicts between the objectives pursued by European consumer policy and the means which are at its disposal. As a first step, the theoretical assumptions of this policy are analysed by an evaluation of the EC Programme for a Consumer Protection and Information Policy of 1975 and of the draft directives on product liability, on misleading and unfair competition, on doorstep sales, and on correspondence courses. It is suggested that the European approach toward consumer protection largely corresponds to the policies prevailing at the national level: Consumer protection is seen as a supplement to the traditional market and competition policy which used to be restricted to regulating competition between producers or suppliers of goods and services, whereas the new policy focuses on the relations between producers and consumers. Nevertheless, consumer policy adheres to the basic presumptions of market economy. It presupposes that the demands of the consumer have to be articulated and satisfied via market processes. It therefore primarily relies on regulations directed against misleading advertising, on protecting justified expectations as to the quality of goods or services by providing redress for losses sustained, and by endeavours aimed at securing a more rational behaviour of the individual consumer. The most important means to promote this policy on the European level are the directives which aim at consonance among national laws (Art. 100 EC Treaty). This is indicative of a market orientation of consumer policy in so far as the harmonization of law is seen as a device for overcoming discriminating effects or distortions of competition created by the differences among national laws thereby furthering a better functioning of the Common Market (Art. 3 h EC Treaty). This accordance of consumer policy and harmonization policy does not rest on firm ground, however. In consumer policy it becomes more and more obvious that the efforts to protect the interests of the consumer lead to further interventionist activities. This process also reveals the need for systematic adjustments or consultations between consumer policy and other fields of politics. A harmonization policy which is primarily centered on breaking down trade barriers and on overcoming discriminating effects of competition cannot respond to the needs and problems of such interventionist activities. Therefore, the harmonization of consumer law should be conceived as a process of formulating broader policies directed at a congruous development of the economic sphere and at an improvement of the living conditions in the Common Market (cf. Art. 2 and the preamble of the EC Treaty). Legal techniques which might be adopted to support such an orientation are (a) in the EC directives to lay down minimum standards for the national legislation, (b) to use a conflict-of-laws approach which would allow to respect and try to coordinate legitimate interests in the application of national consumer policies, and (c) the development of special rules responding to the international aspects of the exchange between producers and consumers. At present, however, European policy gives hardly any attention to the chances and problems of such an approach requiring a complicated coordination of the various legal techniques.     

Maximizing the Efficiency of Greenhouse Gas Related Consumer Policy

Consumer policy approaches regarding green products and solutions can be differentiated by their main focus. “Green positioning” is basically targeted at environmentally aware consumers, while “efficiency-focused positioning” concentrates on the efficiency gain of the product or solution, targeting the whole society, regardless of consumers' environmental awareness. The paper argues that the scope and total environmental benefit can be increased if green products or solutions are promoted in different ways, not only as “green” but also based on other arguments (like cost-efficiency, return on investment, etc.). The paper suggests a model for improving the efficiency of greenhouse gas (GHG)-related consumer policy. Based on the marginal social cost curve and the marginal private cost curve, different (green, yellow, and red) zones of action are identified. GHG mitigation options chosen from those zones are then evaluated with the help of profiling method, addressing the barriers to implementation. Profiling may help design an implementation strategy for the selected options and make consumer policy more effective and acceptable for mass market. Case study results show three different ways of positioning of GHG-related consumer policy in Hungary from 2000 and give practical examples of profiling, based on the latest marginal social cost curve and the contemporary energy saving policy of the state regarding the residential sector.     

基于现代女性视角的消费行为研究

众所周知,当今世界女性消费者已经成为市场上的消费主力军,在购买活动中起着举足轻重的作用。女性的社会消费在当前的消费大潮中正在从温饱型消费向发展型、享受型消费发生着根本性变化。女性作为社会消费的一个特殊群体,有着不同于社会其他消费群体的消费心理和消费行为,其随着社会的发展而发生了重大变化,表现出更趋于个性化和高级化等多方面特点。在目前大部分市场处于饱和、竞争空前激烈的情况下,认真研究并探索现代女性独特消费心理特点以及消费行为的变化,能够为企业制定有效地营销策略,提供有益的建议,成为市场上最具潜力的竞争企业。     

Distribution Channel Management in an Internet Age: Equilibrium and Social Welfare

This paper considers the conditions under which a monopoly manufacturer selling through independent retailers in a spatial market will add an Internet distribution channel (an e-channel), and analyzes the effect this would have on consumer surplus and social welfare. We find that an e-channel will be added only if consumer??s travel costs are high and the e-retailer??s delivery costs are low. Such double-channel operation will decrease consumer surplus if in the pre-entry case the market is fully covered by brick-and-mortar retailers. If instead the market is partially covered and delivery costs are sufficiently high, it will not decrease any consumer??s surplus. When delivery costs are low, social welfare will be improved by profitable double-channel operation even if consumer surplus is harmed by it. Finally, double-channel operation could be Pareto superior even if delivery costs are high.     

Consumer education as a parameter of consumer action in Latin America and the Caribbean

This article is based on a research project carried out at the Regional IOCU Office in Montevideo in 1990 in order to outline a general framework for the development of consumer education in Latin America and the Caribbean. Even if consumer organizations cannot control all variants of consumer education to the same degree, this article will highlight the consumer policy aspect by considering consumer education as a parameter of consumer action. Using a social systems approach to consumer policy as a point of departure, a typology of consumer problems and consumer action is outlined, and two paradigms relevant as a metatheoretical framework for the development of consumer education are accentuated. Within this context two approaches to consumer education are set out. The contents and methodology of consumer education in the broader sense of the word are highlighted, and a teaching guideline based on this approach is specified in further detail.

---

Verbrauchererziehung als ein Parameter von Verbraucheraktionen in Lateinamerika und der Karibik

Zusammenfassung Der Beitrag basiert auf einem Forschungsprojekt, das im Regionalbüro von IOCU in Montevideo im Jahr 1990 mit dem Ziel durchgeführt wurde, einen generellen Bezugsrahmen für die Entwicklung von Verbrauchererziehung in Lateinamerika und der Karibik zu entwickeln. Auch wenn Konsumentenorganisationen nicht alle Spielarten von Verbrauchererziehung gleichermaßen beeinflussen können, betont der Beitrag den verbraucherpolitischen Aspekt dadurch, daß er Verbrauchererziehung als einen Parameter von Verbraucheraktionen auffaßt. Ausgehend von einer Typologie von Konsumentenproblemen und Konsumentenaktionen werden zwei Paradigmen als metatheoretischer Bezugsrahmen für die Entwicklung von Konsumentenerziehung hervorgehoben; in diesem Zusammenhang werden zwei Ansätze für Verbrauchererziehung dargestallt. Inhalt und Methodik von Verbrauchererzidhung im weiteren Sinne des Wortes werden betont und anhand einer Unterrichtsrichtlinie exemplarisch erläutert.

---

---

Hans Rask Jensen is an Associate Professor at the Southern Denmark Business School, College of Business Administration, Grundtvigs Allé 150, DK-6400 Sønderborg, Denmark.     

Sustainable consumption and the financial sector: analysing the markets for responsible investment in Hong Kong and Japan

The origins of the modern socially responsible investment (SRI) movement can be traced to the turbulent period in the 1960s when powerful social undercurrents including environmentalism and anti‐war activism fuelled a rise, in a radical change, in the way society viewed faith, values and commerce. Today, nearly 1 out of every US$9 under professional management in the US is currently invested using social investment strategies while the European green and ethical investment market is estimated to be €1 trillion or as much as 10–15% of the total funds under management. While some preliminary figures and analyses exist for countries outside these two regions, SRI has been, to date, largely explored within the context of North America and Europe. This is unfortunate as the sustainability of SRI as a consumer market is going to depend, to a great extent, to what happens outside of North America and Europe, and most notably in the rapidly developing Asian economies. In this article, I will explore the development of SRI as a mainstream financial consumer instrument in industrialized (Japan) and emerging (Hong Kong/China) economies of the Asia Pacific region. To fully analyse the SRI market development in Hong Kong and Japan, I will examine the following three issues and questions: first, how does the sustainable consumption framework offer a useful lens from which to explore SRI, and why is the Asia Pacific market and policy context so important for the broader issue of sustainable consumption? Second, what precisely is SRI and how did it develop into an important global financial investment vehicle? Third, how did the SRI market develop in the case of Hong Kong and Japan? I will then conclude the article with some analysis on the important lessons SRI market development in Hong Kong and Japan hold for market sustainability of the financial sector and sustainable consumption.     

Pricing practices and firms' market power in international cellular markets, an empirical study

Previous studies on international marketing have typically asked the question: “how is the demand characterized across countries?” Such analysis is then used to provide guidelines for firms to enter new markets and/or to allocate marketing resources across countries. To provide such normative guidelines, however, one also needs to analyze the supply-side of the problem, i.e., ask: “what is the likely market power that firms will be able to command in different countries?” Building on the New Empirical Industrial Organization (NEIO) framework, recent research in marketing provides marketers with a variety of models to explore competitive interactions among firms in the context of a single market. The goal of this paper is to extend this literature to a multimarket/multinational context to help international marketers assess the likely market power they face when entering new countries. We illustrate the proposed method on the mobile telecommunications industry, using price and quantity data from 10 countries around the world, estimating firms' market power as a function of a number of country characteristics.The results indicate that, while the simple presence of competition diminishes firms' market power, it does not lead to perfect competition. Interestingly, a higher number of competitors in a country does not seem to have significant incremental effect on market power. In contrast, the country's commitment to a severe antitrust policy has a significant negative effect, while the monopolist's lead-time before competition is allowed has a significant positive effect on market power. These findings, together with a change in price elasticities as a result of competition, suggest that market power in different countries may originate from two sources: (i) collusive pricing among cellular operators and (ii) consumers' switching costs across service providers. For international marketers, the findings imply that the attractiveness of wealthier countries (with usually faster diffusion rates and larger market potential) may be mitigated by higher levels of competition (as a result of developed antitrust regulation and more consumer exposure to competitive marketing practices). From a policy point of view, it suggests that (in contrast to the conventional wisdom) simple deregulation may not be enough to reduce prices to competitive levels. In addition, a severe antitrust policy is crucial to achieve this goal.     

Regime Market Performance Analysis: Informing European Consumer Policy

The Single Market of the European Union has progressed during recent decades to encompass more than 500 million consumers in 28 EU Member States and adjoining countries. During the same period, consumer issues have received growing policy interest and policy measures have been put in place to harmonize the Single Market, that is, to make national markets more alike. Yet, in order to provide policy measures that promote desirable market outcomes, the considerable challenge of understanding differences in the market performances of participating countries and the relationships between national markets and the Single Market need to be addressed. Consequently, this article proposes the consideration of differences in terms of regimes, that is, between groups of similar countries, when assessing the performances of markets. Differences in market performances are analysed with the Kruskal–Wallis test using survey data from the European Commission, and results were reviewed against market studies carried out by the Commission. Findings show that regime differences in market performance can indeed be observed and that the regime approach can draw policy attention to commonalities in market arrangements in addition to the consumer issues conventionally examined, such as price differences and consumer awareness.     

Reflections on Consumer Law and Policy in Seychelles

Consumerism only reached Seychelles after a wave of market-liberalization reforms adopted in 2008 as a response to a dire economic crisis. Consumer law is therefore only a recent phenomenon in the country. The main sources of inspiration for Seychelles legislation are the UN Guidelines on Consumer Protection, the EU Directive on unfair contract terms, and the South African Consumer Protection Act. Policy initiatives tend to be modelled either on other small island countries or on Commonwealth countries. The formal legal framework is overall modern and in line with international guidelines. However, the article identifies two sets of challenges encountered in practice. First, local standardization efforts fail to address the matter of poor-quality products entering the market, and this lack of local capacity is insufficiently complemented by reliance on international standards. Secondly, consumers seldom rely on the adjudicatory mechanism provided by consumer laws and informal settlement mechanisms are preferred, which comes at the cost of depriving consumer law operatives of precious interpretative materials, leaving areas of legal uncertainty. While policy guidance from the political sphere would be needed, it is unclear how much attention consumer matters will receive in the medium term.     

Collective Prototyping: A Consumer Policy Strategy to Encourage Ecological Marketing

In the present paper, three examples of organized positive consumer action that pursues the aim of supporting ecological marketing practices are presented. It is believed that this form of consumer action is more effective in encouraging ecological marketing than the three classical consumer reaction strategies exit, voice, and loyalty. Positive strategies such as entry, confirmation, and approval allow consumers to articulate needs which are different from those that are already satisfied by products available on the market. The examples chosen describe the process of prototypic development of an environmentally friendly refrigerator, a solar system for the production of energy for private use, and the 3-litre-car, demonstrating how petrol consumption can be decreased by 50%. The goals of the prototyping strategy are, firstly, to demonstrate the feasibility of an ecological product innovation, and, secondly, to assess the market opportunities for such an innovation. The examples show that it is possible and necessary to extend the instruments of consumer policy to collective, partnership-based approaches while still adhering to the paradigm of countervailing consumer power.     

Policy implications

Abstract: In the European Union, the framework of financial services legislation at EU level has been aimed primarily at forming a single market for banks, insurers and other financial services firms. Substantial progress has been made towards this objective. Also, the EU initiatives have stimulated a reappraisal of national regulatory systems. Most of this EU legislation (with the exception of the consumer credit directives) has not had consumer protection as one of its main aims, although it has been assumed that consumers will eventually benefit from a wide choice of financial services providers and from price competition. However, partly in response to consumer pressure, the European Commission is developing a set of initiatives more closely geared to protecting consumers’ interests. Within the context of the EU’s approach, there remain considerable variations in the approach to protecting consumers’ interests in different member states as a result of legal and cultural differences.     

Verbraucherpolitik als gewerkschaftliche Aufgabe

Trade unions and consumer policy. In the first part of his essay, the author discusses the position of the DGB (Deutscher Gewerkschaftsbund), the largest and most important of the West German trade unions, in the field of consumer policy. Consumer policy has been part of the statute of the DGB since 1971. Trade unions in West Germany regard themselves as consumer organisations because their members are consumers as well as employees, and consumer policy is understood to be part of the general economic policy of the unions. In 1975, the congress of the DGB accepted a programme of consumer policy. The programme demands that consumers rank equal with producers in the market. This goal should be reached by price competition (as a dominant factor of competition), by transparency (Markttransparenz) of prices and quality, and by the appointment of an ombudsman as a legal caretaker of consumer interests. The DGB rejects new consumer organisations, because in its view the trade unions constitute a well organised consumer institution. There is some cooperation, however, with the Arbeitsgemeinschaft der Verbraucher, the chief German organisation for consumer affairs. The author disagrees with legal writers who deny trade unions a right of claim against unfair competition and against unfair standard contract clauses, according to para. 13 of the German Unfair Competition Act. In the second part of his essay, the author analyses the legitimation of trade union consumer policy. The discussion concerns the question of whether or not employees are the only consumers who are in need of protection, and if there is a conflict between their interests as employees and as consumers. The author suggests that legal consumer protection should shield only individual persons as buyers (not small firms, for example). Furthermore, consumer interests should be defined from the perspective of the consumer who is anemployee. A consumer who is at the same time an employer, does not need protection because he can compensate for the disadvantages sustained in his consumer role by exploiting his position as an employer. Conversely, the employee-consumer has the weaker position in both of his roles. Another important question is whether or not there is a conflict between a high standard of consumer protection and a high level of wages. The author cites some economists who suggest that this conflict may be resolved, and that the real conflict is not between consumers and employees, but between those two on the one side and business on the other. The author draws the conclusion that there exists a theoretical legitimation for trade unions to represent the consumer interest. There is a wide gap, however, between the programmes of the trade unions and their policy as evidenced by their everyday activities. The hope is expressed that this gap will become narrower.     

From Bounded Morality to Consumer Social Responsibility: A Transdisciplinary Approach to Socially Responsible Consumption and Its Obstacles

Corporate social responsibility has been intensively discussed in business ethics literature, whereas the social responsibility of private consumers appears to be less researched. However, there is also a growing interest from business ethicists and other scholars in the field of consumer social responsibility (ConSR). Nevertheless, previous discussions of ConSR reveal the need for a viable conceptual basis for understanding the social responsibility of consumers in an increasingly globalized market economy. Moreover, evolutionary aspects of human morality seem to have been neglected despite the fact that private consumers are undoubtedly human beings. In addition to that, empirical studies suggest that many consumers believe themselves to be responsible but do not act according to their alleged values or attitudes. This raises the question of what deters them from doing so. Therefore, the contribution of this conceptual paper is threefold: we (i) (re-)conceptualize ConSR in terms of a combination of a Max Weber-inspired approach (social action and the ethic of responsibility) with the social connection approach to shared responsibility proposed by Iris Marion Young; (ii) shed light on the previously neglected implications of an evolutionarily induced bounded morality for ConSR, and (iii) identify potential obstacles to socially responsible consumption, particularly against the backdrop of shared social responsibility and bounded morality. In this latter respect, the paper focuses specifically on the obstacles of low moral intensity, moral stupefaction, informational complexity, and the lack of perceived consumer effectiveness. In sum, the paper advances knowledge in the field of ConSR by using a transdisciplinary, literature-based approach.     

Key factors in the triumph of Pokémon GO

The mobile app market, particularly the app game sector, is a multibillion-dollar space. This study conducted in-depth interviews and two large-scale surveys with a total 1,437 respondents to investigate the consumer behavior of mobile app game players. The app game Pokémon GO became a worldwide phenomenon not only as a social sensation but also as a high profitable business model. Taking the theoretical lens of telepresence theory and social capital theory, this develops a framework to explicate the success factors of Pokémon GO. The theoretical framework also provides guidelines for practitioners who plan to enter the lucrative app game market.     

Reciprocal exchange in rural communities: Consumers' inducements to inshop

Although consumer–retailer exchange behavior has been studied for many years, its treatment has not accounted for factors relating to reciprocal exchange intentions. This article defines reciprocity as the degree to which individuals expect cooperative action, and places reciprocity within the overall framework of consumer–retailer market exchange. In addition, it presents results of an exploratory study of rural consumers' reciprocal intentions to shop with local retailers, indicating that levels of satisfaction with interpersonal reciprocity have greater influence than moral, social, or economic motives. This study also suggests that social desirability, as a bias, is strongly linked to rural consumers' responses. © 1997 John Wiley & Sons, Inc.