Question

Define the concept of consumer behavior. How do ethics and soscial responsibility play a role in consumer behavior and when selling a product?

Answer 1

Consumer behaviour is the study of how individual customers, groups or organizations select, buy, use, and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the actions of the consumers in the marketplace and the underlying motives for those actions.

Marketers expect that by understanding what causes the consumers to buy particular goods and services, they will be able to determine—which products are needed in the marketplace, which are obsolete, and how best to present the goods to the consumers.

Consumer behaviour emerged in the 1940s and 50s as a distinct sub-discipline in the marketing area. Consumer behaviour is an inter-disciplinary social science that blends elements from psychology, sociology, social anthropology, ethnography, marketing and economics, especially behavioural economics. It examines how emotions, attitudes and preferences affect buying behaviour. Characteristics of individual consumers such as demographics, personality lifestyles and behavioural variables such as usage rates, usage occasion, loyalty, brand advocacy, willingness to provide referrals, in an attempt to understand people's wants and consumption are all investigated in formal studies of consumer behaviour. The study of consumer behaviour also investigates the influences, on the consumer, from groups such as family, friends, sports, reference groups, and society in general.

The various factors that influence the consumer behaviour are as follows:

a. Marketing factors such as product design, price, promotion, packaging, positioning and dis­tribution.

b. Personal factors such as age, gender, education and income level.

c. Psychological factors such as buying motives, perception of the product and attitudes towards the product.

d. Situational factors such as physical surroundings at the time of purchase, social surroundings and time factor.

e. Social factors such as social status, reference groups and family.

f. Cultural factors, such as religion, social class—caste and sub-castes.

Ethical marketing is less of a marketing strategy and more of a philosophy that informs all marketing efforts. It seeks to promote honesty, fairness, and responsibility in all advertising. Ethics is a notoriously difficult subject because everyone has subjective judgments about what is “right” and what is “wrong.” For this reason, ethical marketing is not a hard and fast list of rules, but a general set of guidelines to assist companies as they evaluate new marketing strategies.

Business decisions related to ethics impact the daily lives of professionals and consumers. Many people are employed at organizations that sell or provide goods and services. Professionals like lawyers and accountants are bound by codes of conduct from professional societies, and other professionals must practice sound business ethics in their role and with co-workers, clients and the public.

Consumers interact with the brands and people in a business, and these exchanges affect the success of the business. For example, small businesses depend on reputation and trust among people in the community. By treating employees and customers well, businesses can gain the community’s support.

Unethical business practices can have the opposite effect on customers. False or discriminatory advertising, negative treatment of employees and ignoring safety concerns in products can undermine consumer confidence. Legal action can also result..

Ethical Marketing is a philosophy that focus focuses on honesty, fairness and responsibility. Though wrong and right are subjective, a general set of guidelines can be put in place to ensure the company’s intent is broadcasted and achieved. Principles of this practice include:

A shared standard of truth in marketing communications
A clear distinction between advertising and sensationalism
Endorsements should be clear and transparent
Consumers’ privacy should be maintained at all times
Government standards and regulations must be adhered and practiced by marketers.

To be socially responsible is when the organization is concerned about people, society and environment with whom and where it conducts business. In it’s most basic form, socially responsible marketing is taking moral actions that encourage a positive impact on all the company’s stakeholders, including employees, community, consumers, and shareholders. The main responsibility of marketers in this aspect is to package and communicate the organization’s decisions that will impact the various communities with which they interact. Consumers have the right and power to decide which companies succeed or fail; so marketers have a major responsibility to ensure their practices are seen as philanthropic without being phony.

Marketing targeting strategies for products that may cause economic, physical and psychological harm has become an aspect of marketing which is criticized a considerable amount, especially in marketing literature with a particular focus on vulnerable consumers

Children, elderly consumers, and economically disadvantaged consumers are often categorized as being a part of the vulnerable group in marketing, in terms of ethics. “Ethics and social responsibility communities seem to agree that targeting a vulnerable group with marketing campaigns that take advantage of their vulnerability is unjust”. George G Brenkert was amongst the first to raise the issue about taking advantage of the vulnerability of a person, which therefore makes marketing practices immoral or unjust. Adolescents and children in the US are major market force in the food and beverage industry and as a result, food marketers are “attracted to the youth as consumers because of their spending power, purchasing influences and as future adult consumers”. It is ethically wrong to target children especially when it comes to unhealthy food and beverages, as children may not want anything else, which could lead to child obesity. Children have difficulty deciding between the purpose of advertising and other modes of communication; therefore it is morally unacceptable to target vulnerable children with such products. In Belgium, it is banned to show commercials during children’s programs, similarly in Australia, such ads are not allowed during television programs for preschoolers. It is considered unethical to generate profits through marketing to vulnerable groups, such as children, the poor or the elderly.

The ethics of marketing practice, especially directed towards the vulnerable can be divided into two areas, product and process.

Process related ethical issues are often demonstrated through the use of deceptive or misleading advertising, where as product related issues is predominately focuses on marketing of certain “harmful” products such as tobacco, unhealthy food etc