Definition of Issues of Privacy and Ethics

Consumer Privacy

The word “Consumerism”, has many connotations, depending on who is using the term. Business, government, consumer groups and academic researchers have each developed their own definition of the term. These definitions span the gamut from challenging society’s goals for material goods to reflecting people’s desire for better values. One succinct definition is that “Consumerism is a social movement of citizens and government to enhance the rights and powers of buyers in relation to sellers.

One of the consumer rights relates to privacy, information, data banks, and similar emerging issues. Consumer information collected, merged, and exchanged through computer and communication technologies has become the main resource that business and government use to facilitate the millions of daily transactions engaged in by consumers. Timely, accurate, and complete consumer information is needed by a variety of organizations, direct response marketers, advertising agencies, insurance companies, and private 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.

To obtain the benefits of technology without losing basic privacy rights, six basic computer –age privacy rules were formulated:

Only relevant and socially approved personal information should be collected by private or public organizations to determine people’s access to rights, benefits and opportunities.

Individuals should be informed what information about them is to be collected and how it will be used.

Individuals should have practical procedures for inspecting their records and for raising issues as to the accuracy, completeness, and propriety of information used to make evaluative decisions about them.

Sensitive personal information should be circulated within the collecting organization only to those with a need to see it for legitimate purposes.

Disclosures of identified personal information should not be made by collecting organizations to others outside the original area of activity unless agreed to by the individual or required by legal process.

Organisations must create and apply effective data security measures so that they can keep the promises of confidentiality that they have made to individuals whose information they are holding in a trustee relationship.

But new consumer privacy issues have surfaced recently. For instance:

Feature stories in magazines, newspapers, and on TV informed the public that information given for one purpose – credit, insurance, employment, organizational memberships, publication subscriptions, charitable donations, etc., - was being widely used for other commercial purposes without the individual’s knowledge or consent.

When the Society of Consumer Affairs Professionals in industry polled ten leading consumer advocacy organizations in 1989 as to the issues they believed would be consumer action priorities in the ‘90’s, a majority cited better “ Consumer privacy protection”.

A major survey of consumers and industry leaders in the privacy – intensive sector ( eg., banks and thrifts, insurance companies, direct marketers, credit bureaus, etc., ) made the following conclusions regarding consumer privacy in the information age:

The general concern over threats to privacy by 79 percent of the public reflects the low trust in institutions that has become a hall mark.

Despite these high general concerns over privacy invasion, the public is prepared to provide personal information for consumer services when convinced that fair information practices are observed.

Concern about privacy varies by race, religion, political philosophy, information level, age and computer use. For instance blacks, Jews, liberals and those aged 30 – 49 are most pro-privacy.

Lowering general public concern over threats to privacy will not be easy but there

Are three important ways to enhance consumer privacy interests:

Update consumer privacy laws such as the Fair Credit Reporting Act.

Create new information property rights for consumers whereby they could opt in or out of particular consumer-profile information systems and receive some kind of compensation if they participate.

Develop more proactive consumer privacy protection policies by business and consumer advocacy groups.

This topic would be of continuing concern to the marketers because of the potential for a consumer backlash on privacy issues. More education of consumers will be required about why certain information is being collected and about their consumer rights.

Ethics in Business and its Relevance to Consumer Behavior

Understanding of consumer Behavior gives a clear advantage to the marketer who would know all that is there to know about the target consumers personality and choices. In fact almost all companies producing or marketing continuously gather and update their information about their target consumers and form strategies. In many circles it is felt that in depth understanding about the behavior of the consumers gives scope to the marketer to manipulate the market itself and that strategies are formed without regard to fundamental ethics of being honest, truthful and fare.

The principal aim of the strategies is to somehow overcome the resistance of the consumers and sell more. This leads to a situation where cleverness in the market place and selling success become prized qualities of a market man when viewed from the angle of his employer or the company. Unless the company draws the line and encourages the employees to be within certain limits, ethics becomes the first casualty. In the long run it does immense damage to the relationship between the company and its customers. Therefore, more than anyone else companies doing marketing have to make ethics their way of life not be compromised even under grave provocation or threat from competition. Without ethics there can be no business.

Ethics is not a Matter of Choice

It is difficult to precisely define what ethics is. However most people have no difficulty in understanding the spirit of ethics. Most people do not question or argue about the axiom that ethics is not a matter of choice. Just as you do not question the right of other people to live you do not question their right to expect ethical behavior from you. Having said that we must however admit that unethical practices are seen and put up within every area including marketing. In marketing- be it product design, packaging, pricing, promotion, distribution or quality assurance, ethics gets a go-by many times.

It is difficult to precisely define what ethics is. However most people have no difficulty in understanding the spirit of ethics. Most people do not question or argue about the axiom that ethics is not a matter of choice. Just as you do not question the right of other people to live you do not question their right to expect ethical behavior from you. Having said that we must however admit that unethical practices are seen and put up within every area including marketing. In marketing- be it product design, packaging, pricing, promotion, distribution or quality assurance, ethics gets a go-by many times.

Ethics Flow From the Top

A business place dishonesty or rot has described above could not be taking place without some knowledge of the management. Management are in any case expected to be constantly on the alert to detect and stem any rot at the first instance. They are to educate their employees and pro actively install all policies that would prevent unethical practices. Ethical practices should be instituted by the companies to flow from the top and percolating to all levels below. Including lofty statements about ethics in the company’s vision statement is good but not enough. The corporate management should understand that Junior executives constantly look upward their supervisors and top management for moral guidance. Absence of guidance is taken by the working levels as a signal that the company is not serious about ethics. In such company’s commercial success becomes the paramount policy.

All means, fare or foul, that brings success will be viewed as strategies. One company’s unethical practices will induce the other company’s to follow suit in the name of the competition. Using trick for trick, fighting fire with fire, the competitors bring down the general image of the industry. All because few managements did not have the foresight or gutts to stand up and stick to ethics even at the cost of some short term set backs. However history has shown that those company’s stand erect and instill ethics in their employees get notices by consumers and become leaders.

Ethics is a Journey

Ethics is not a destination. It is a journey. Company’s and persons should continuously practice it, question themselves periodically and take course corrections to travel in correct directions. Induction of the code of ethics and their maintenance should be proactively supervised by the entire organization be it a government, business or a group on a continuous basis. Appreciation and reward for followers of ethical codes is important and so also punishments for breaking these codes.

What is Ethical Purchasing?

Ethical purchasing put simply is buying things that are made ethically by companies that act ethically. Ethical can be a subjective term both for companies and consumers, but in its truest sense means without harm to or exploitation of humans, animals or the environment . . .

Understanding Buying Ethically

The ways in which you can act as an ‘ethical consumer’ can take on a number of often subtle forms.

Positive buying is favoring ethical products, be they fair trade, organic or cruelty free. This option is arguably the most important since it directly supports progressive companies.

Negative purchasing means avoiding products you disapprove of such as battery eggs or polluting cars.

Company-based purchasing involves targeting a business as a whole. For example, the Nestlé boycott targets all its brands and subsidiaries in a bid to force the company to change its marketing of baby milk formula in the Third World.

The fully screened approach is a combination of all three and means looking at all the companies and products together and evaluating which brand is the most ethical . . .

10 Shopping Tips for the Ethical Shopper

Local shops

Health food shops

Fair trade

Products not tested on animals

Vegetarian products

Organic produce

Non-genetically altered food

Ethical money

Recycling & second hand

Wood Products

Deviant Consumer Behavior

The deviant consumer behaviors include negligent and fraudulent behaviors.

Negligent Consumer Behavior: COMPULSIVE BUYING

Most consumers engage in buying as a normal and routine part of their everyday lives. But when the buying becomes compulsive the goal shifts from obtaining utility from the purchased item to achieving gratification from the purchasing process itself. Compulsive buying is chronic. Repetitive purchasing that becomes a primary response to negative events or feelings. It becomes very difficulty to stop and ultimately results in harmful consequences to individuals or others.

Compulsive buying is undesirable because it has sever consequences such as amassing huge amounts of debt that are difficult to retire and feelings of remorse, lowered self esteem, and weekend inter personal relationships. Shopaholics are addicted to purchasing and use it as a fix to offset emotional deprivation. And when they are confronted over their spending habits they will often switch to another type of chronic destructive habits such as over eating, work holism or over exercising.

Studies show that as much as 10 percent of the American population can be classified as hard core shoppers who shop for shopping sake rather that to fill real needs. One factor facilitating the process is the easy availability of the credit cards. It is probably no coincidence that there has been a rapid growth in the bank cards issued during the rise in the problem of compulsive consumption.

One consumer was even able to obtain 1199 different types of credit cards to win a bet with a friend. The result of easy credit can be staggering debt. Support groups have been established to fight this type of addiction by helping people who are trying to stop their compulsion to spend beyond their means for things they don’t need.

Fradulent Consumer Behavior

Shop lifting is an example of fraudulent or a criminal type of deviant consumer behavior that involves the theft of retail merchandise during the store hours by someone who is shopping or pretending to shop. Shop lifting rose 35 per cent between the mid – 1980’s – 1990 and equals about two per cent of all retail sales excluding gas and car purchases.

Thus, it must be emphasized that consumers, just as business and other organizations, have an obligation to act responsibly in the marketplace in exchange relationships.

Ethical Shopping and Ethical Trade Initiatives

Every day we choose between different products. Our purchase decisions do not only affect us ourselves. The way the products have been produced can make a big difference to other people, to nature, the environment and to animals. Ethical purchase behavior is about taking responsibility for the influence which we control ourselves.

Ethically Questionable Consumer Behavior

The more one equals ethics with moral criticism and moral self-criticism, the more natural it is to start with looking at unethical rather than ethical consumer behavior. In addition to potential theory-traditional reasons, there are good practical and economic reasons for explaining, influencing and prohibiting ethically questionable consumer behavior. A red thread in this consumer ethics research tradition has been it’s the development, validation and frequent replication of the “consumer ethics scale” (often referred to as CES. This CES scale offers a list of more or less ethically questionable consumer activities for a vote. The activities can be grouped into four categories, ranging from clearly questionable to little controversial categories:

Actively benefiting from illegal activity

Changing price tags on merchandise in a retail store.

Drinking a can of soda in a supermarket without paying for it.

Reporting a lost item as “stolen” to an insurance company in order to collect the money.

Giving misleading price information to a clerk for an un-priced item.

Returning damaged merchandise when the damage is your own fault.

Passively benefiting at the expense of others

Getting too much change and not saying anything.

Lying about a child’s age in order to get a lower price.

Not saying anything when the server miscalculates the bill in your favor.

Actively benefiting from questionable behavior

Breaking a bottle of salad dressing in a supermarket & doing nothing about it.

Stretching the truth on an income tax return.

Using an expired coupon for merchandise.

Using a coupon for merchandise that you did not buy.

Not telling the truth when negotiating the price of a new automobile.

No harm/no foul

Tasting grapes in a supermarket and not buying any.

Using computer software or games that you did not buy.

Recording an album instead of buying it.

Spending over an hour trying on different dresses and not purchasing any.

Taping a movie off the television.