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Unethical Consumer Behaviour in Marketing

Consumer Behaviour Term Paper

















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Introduction
Consumer Behaviour deals with the buyer side of exchange process. A vast research on marketing
ethics has been carried out in recent years which focussed mainly on the supplier side of exchange
process; however the buyer side remains un-researched or less researched. Consumers are one of the
major stakeholders in any marketing activity however a limited research activity has been performed
to understand the ethics of a consumer and his buying/decision making behaviour which is closely
associated with ethics. The current era is an ethics era where a companys marketing and
promotion activities should also take into consideration the ethics side of the consumers to avoid
falling prey to the different unethical gimmicks i.e. consumer misconduct by which he gains at the
expense of the seller, played by the consumer. Thus understanding the ethics of consumers is must to
avoid any potential losses that the company might face because of the unethical consumer behaviour.
In this paper we will focus on finding out the different factors that lead to the unethical behaviour
being frequently observed among the consumers. Based on the factors identified we will look into
what measures companies can take to prevent occurrence of such incidents and at the same time how
marketers can predict the unethical consumer behaviour. Also we can suggest the companies based on
the observed factors if the current measures being followed are sufficient to address the issue of
unethical consumer behaviour or it needs some modification which will help in addressing this
challenge faced by the sellers. This phenomenon of unethical consumer behaviour is being observed
very frequently in recent years thereby making conditions worse for the seller in an already highly
competitive market setting.
Objective
The objective of the term paper is to find out the reasons behind the unethical consumer behaviour
being observed more prominently in recent years. In other words the paper will address the why
question behind the unethical consumer behaviour. A limited research has been carried out while
unearthing the factors that lie behind the consumers unethical behaviour. This paper will focus on
finding the major factors that lead to unethical behaviour. The identified factors will act as a major
source of information for sellers thereby helping them in designing the marketing and promotional
activities to avoid consumers from taking undue advantage of them. Once the why part of unethical
consumer behaviour is identified this can help in designing a mechanism that will help address this
issue which is currently haunting majority of suppliers in various industries.

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Literature Review
The majority of literature available on marketing ethics deals with the seller side where as the buyer
side research is new and limited research has been carried out in this area. Consumer behaviour is
identified as a new topic in the area of consumer research which also includes among others the
unethical consumer behaviour (Hirschman, 1991; Holbrook, 1994; Mick, 1996). A significant amount
of literature has emerged around consumer ethics since the pioneering studies carried out by Muncy
and Vitell (Muncy & Vitell, 1992; Vitell & Muncy, 1992). Unethical consumer behaviour is prevalent
in everyday life and has several severe consequences for the sellers. So The understanding of
consumer ethics is crucial to todays marketers and policy makers (Chan et al., 1998, p.1163).
Personal characteristics of the consumer play a pivotal role in determining the consumer behaviour. A
lot of research has been carried out on the personal and psychological factors of the consumer
whereas the consumers basic value system, his ethical beliefs which are very helpful in determining
the consumer behaviour remains less researched.
Prior to 1990 the research was focussed mainly on seller side ethics however after 1990s the research
started focussing on the buyer side. There existed some research before 1990s which focussed on
buyer side and can be classified into 5 categories:
Some authors have concentrated mainly on a single component of unethical consumer behaviour.
The investigated areas mainly included shoplifting, ecologically related consumption and
consumer views on games like gambling and lottery.
Some concentrated on providing normative guidelines for sellers and buyers on issues related to
ethics. This involves laying out of code of ethics for buyers as well as chalking out strategies to
tackle the abuses by the buyer.
Some examined the double standards that exist between consumer perception of acceptable
consumer behaviour and customers belief of acceptable business practices.
Some developed theoretical models for getting a better understanding of ethical decision making
process in marketing
While some authors focussed specifically on different unethical consumer practices.
However post 1990, an increase in consumer ethics research has been observed and it focused on
various consumer behaviour topics thereby leading to formulation of different frameworks and
models that correctly captured the factors leading to either ethical or unethical behaviour of the
consumers. Based on the work of Wilkes (1978), Muncy and Vitell developed the Consumer Ethics
Scale which has been the most common tool in the consumer ethics literature to date; Also Forsyths
ethical ideology and the Machiavellianism trait have been identified as most important determinants
of ethical discrepancies between individuals; and extensive empirical work has been conducted to
investigate the influence of cultural environment and personal characteristics on consumer ethics.

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Ethical Decision Making Frameworks for Consumers

1. Ethical Decision Making Model
The research literature talks about three theoretical models of decision making in the situations which
involve ethical issues in the field of marketing (Ferrell & Gresham, 1986; Hunt & Vitell, 1986, 1993;
Trevino, 1986). Each of these three models has similarities in terms that each of it identifies the
triggering construct which initiates the ethical decision making process and also identifies behaviour
of the buyer as the outcome of this process. These models also highlight the relative importance of
various factors that lie behind the decision making process.
Along with the similarities mentioned above there are several differences among these models. The
Trevino model and the Ferrell-Gresham model present the individual decision making as a single
factor leading to buyers behaviour, whereas the Hunt-Vitell model explains the individual decision
making process, the various philosophical theories (deontology and teleology) which explain a
decision makers (buyers) ethical judgments. Hunt-Vitell model is the only model that can be applied
in individual contexts such as consumer behaviour by eliminating the parameters of organizational,
professional and industry environment. This explains that Hunt-Vitell model is best suited for
understanding the consumer ethics and can guide well in determining the major reasons for a buyers
unethical behaviour. So we will now look into the Hunt-Vitell model as it best suits our needs.

2. Hunt-Vitell Model
The perception of an ethical problem by an individual decision maker in a situation is accompanied
with the perception of various alternatives that can be used to address the problem. Once these various
alternatives are arrived at, two major ethical evaluations can take place namely a deontological
evaluation and teleological evaluation.
The deontological evaluation emphasizes on certain actions and behaviours of the individual
consumer whereas teleological evaluation focuses on the outcome of these behaviours. While making
a deontological evaluation, the individual consumer evaluates the inherent rightness versus wrongness
of various actions and behaviours. According to this model, the deontological evaluation includes a
comparison of perceived alternatives with the established deontological norms that depict the
individual consumers personal values.
In teleological evaluation, a particular behaviour or the alternative chosen is considered most ethical if
the consequences lead to a superiority of good over bad than any other alternative being perceived by
the individual consumer. This evaluation contains more major constructs:
Perceived consequences of each alternative for various stakeholder groups
Probability that each consequence will occur to each stakeholder group
Desirability or lack of desirability of each consequence
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Importance of each stakeholder group
The individual consumers teleological evaluation is influenced by these constructs and the output of
this evaluation is the individuals beliefs about the relative good versus bad produced by each of the
possible alternative.
In most of the situations faced by an individual consumer, the ethical judgements are a function of
both deontological and teleological evaluation. However a recent test of Hunt-Vitell model revealed
that consumers rely mainly on deontological norms and less on teleological norms while forming the
ethical judgements.
Once a consumer chooses behaviour for a situation there is an evaluation of the consequences that can
result from the behaviour. These consequences act as a feedback to an individuals personal
experiences when compared to the expected consequences.
The Hunt-Vitell model consists of several background factors that influence the decision making
process. Out of the various factors only the culture and personal characteristics are important for
consumer ethics.

Figure 1: The Hunt-Vitell model Consumers ethical decision-making framework

3. Consumer Ethics Scale
Most of the research on the topic of consumer ethics is done by Vitell and Muncy. Based on the work
of Wilkes (1978), Vitell and Muncy came up with the Consumer Ethics Scale which examines the
extent to which consumers believe that a certain questionable consumer situation is either ethical or
unethical. Vitell and Muncy used a sample of 569 heads of the household to establish a four factor
structure of ethical beliefs denoting the consumers ethical judgements which are determined by:
Whether or not the consumer has actively or passively benefited from the activity
Whether the activity can be perceived as legal or illegal
The degree of harm to the seller
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The first category of the scale actively benefiting from an illegal activity consists of actions that are
initiated by the consumer and that are universally perceived as illegal. In the second category of the
scale passively benefiting at the expense of others consumers do not initiate any action specific to
receiving the benefit however they do take advantage of the mistakes committed by the seller. In the
third category of the scale actively benefiting from a questionable behaviour the consumer might be
involved in an action that might not be perceived as illegal (e.g. using an expired coupon). In the
fourth category of the scale consumers believe that their actions are not causing any harm to the seller
(e.g. recording a music album instead of buying it)
The study of the sample revealed that consumers believed that it was more unethical to gain benefit
from actively involving in an illegal activity than getting passively involved. The reason behind this
may be that as long as they are not initiating the activity they are not doing as wrong as active
involvement. At the same time deceptive practices were not considered to be as unethical as passively
benefiting from the illegal activity. Some of the activities were not considered by consumers as
unethical at all, many of the consumers indulged in these activities like copying of intellectual
property.
The Consumer Ethics scale has been proven to be useful in many scenarios even in the case of cross-
cultural societies. This can be found in the works of Al-Khatib et. Al. (2004), Rawwas et.al. (2005)
and Swaidan et. al. (2003). Al-Khatib et. al. (2004) used this scale to investigate Romanian
consumers. Rawwas et. al. (2005) used the scale to compare the ethical beliefs of Turkish and
American consumers and Swaidan et. al. (2003) used the scale to explore the ethical beliefs of African
Americans.
The consumer ethics scale is represented as follows:
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Figure 2: Four factor structure of consumers ethical beliefs by Muncy and Vitell


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Factors Responsible for Ethical/Unethical Consumer Behaviour
1. Moral Philosophy
This refers to the guiding ideology that the individuals apply while judging a situation whether it is
right or wrong. According to Forsyth (1980, 1992) moral philosophies can be classified into idealism
(extent to which an individual believes that the right action leads to the desirable outcome i.e.
deontological perspective) and relativism (extent to which an individual rejects universal moral rules
in favour of the subjective or situational approaches i.e. teleological perspective).
Based on these two uncorrelated constructs described above, Forsyth classified people in four
different ethical types namely subjectivist, situationist, exceptionist and absolutist. This is
demonstrated in the figure below.

Figure 3: Frosyths four ethical types
2. Machiavellianism
This personality construct is another important antecedent of consumers for ethical decision making.
Hunt and Chonko (1984) have described Machiavellianism as a negative epithet indicating an
immoral way to manipulate others to accomplish ones own purpose. A Machiavellian personality can
be described as emotionally detached. Machiavellian individuals are more likely to accept ethical
questionable consumer practices because of their emotional detachment with others. The empirical
evidence from several studies carried out till date suggests that highly Machiavellian consumers are
little concerned for conventional morality and therefore are more likely to engage in unethical
consumer behaviour when their self-interest is involved.

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3. Cultural Environment
Hunt-Vitell model includes cultural environment as one of the vital factor leading to the ethical
decision making process. This has led the research on consumer ethics to be culturally diverse i.e.
spread across two or more countries. These studies indicate that cultural differences exist between
consumers ethical ideology due to difference in economic development, degree to which a country
holds its international identity, difference in Hofstedes cultural dimension for the country,
geographical conditions, war and terrorism.

4. Personal Characteristics
These are also included in the Hunt-Vitell model as a factor leading to ethical decision making
process. The personal characteristics include socio-demographic variables, individual differences,
attitudinal characteristics, moral development and religion.
4.1 Socio-Demographic Variables
Age has a positive effect on the ethical beliefs of the consumer. More is the age more is the
likelihood of rejecting questionable consumer practices.
There has been mixed results when gender is taken into consideration. Some of the studies carried
out have found out that women are more concerned with ethical issues than men. While some of
the research has failed to support the effect of gender on unethical consumer behaviour.
Education is also one of the socio-demographic variables which can be taken into consideration. It
has been found that the less educated consumers are more ethical as compared to the consumers
who have higher level of education. This effect has been attributed to the different ways a highly
educated consumer employs to get benefit from the seller because of good knowledge and
information.
When income is considered, it has been observed that there is a negative effect between income
and unethical behaviour by consumers.
When marital status is taken into consideration, it has been observed that married people have a
tendency to accept questionable practices as compared to the single individuals. However there is
no uniformity in the research findings.

4.2 Attitudinal Characteristics
The study carried out by Vitell and Muncy (1992) states that attitude towards illegal activities and
attitude towards business have significant correlation with the ethical beliefs of the consumers.
Consumers who are negative towards business are less inclined to consider the different consumer
practices as unethical.



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4.3 Individual Differences
It has been observed that consumers with high propensity for risk and are autonomous, innovative
and aggressive tend to be less ethical. Similarly consumers with higher need for closure tend to
have ethical beliefs. An alienated consumer is less likely to follow norms and therefore is more
likely to accept the ethically questionable consumer behaviour. There is a negative relationship
between materialism and the ethical beliefs of the consumer. A value conscious consumer is more
likely to engage in unethical consumer practices like purchasing pirated goods.

4.4 Religion
Religion plays a very important role in determining ethical beliefs of consumers. Religiosity has a
negative relationship with unethical consumer behaviour.

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Analysis of Unethical Consumer Behaviour in Indian Context
An Indian consumer is highly cost conscious and is very demanding when he goes for shopping. So it
is very difficult for a seller to understand the complex needs of the consumers and make them
satisfied with their offering. Also the existence of huge competition in the market leads every seller to
indulge in practices that will help attract maximum consumers. In this process seller introduces
various offers and different promotional activities to increase his sales. It is generally assumed that
consumers will behave ethically and would not indulge in practices that will benefit them at the cost
of the seller. However based on the various factors identified above it is clear that a value conscious
consumer like an Indian consumer is more likely to indulge in unethical consumer practices. So while
designing the promotional activities the seller should take into consideration the ethical aspect of
consumers so that the consumers do not take an undue advantage of him.
It has also been observed that people of India are greedy when money comes into picture. They have a
tendency to gain maximum advantage at the lowest cost. To cater to such a customer, the seller needs
to be extremely cautious and at the same time customer-centric to garner more sales. Also the level of
education in the country is increasing thereby leading to consumers getting information on various
issues readily available. From the factors mentioned above it has been observed that the more the
information with the consumer more likely that he will indulge in unethical consumer practices
thereby gaining at the expense of the sellers.
The sellers now-a-days have started implementing various mechanisms that help them in addressing
this issue however a lot of areas are still an area of concern for them. However if they implement lot
of measures to address the issue it will affect the sales as consumer also want some liberty and
comfort while shopping. Thus it is a double-edged sword and a perfect mix of consumer comfort and
regulatory mechanism for unethical consumer behaviour needs to be arrived at for a win-win situation
for both the consumers and suppliers.

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Conclusion
The seller has to keep in mind that consumers ethical ideology which is closely related with the
ethical judgements is an important factor while formulating various customer friendly initiatives. The
ethical ideology of a consumer largely influences the behaviour of the consumer which in turn helps
the sellers to either gain or lose from his current operations in the market. The various factors leading
to unethical consumer behaviour will act as a vital source of information for the seller as it will help
them in bridging the gap if any that exists in the current mechanism in place. Also it will help in
designing a new mechanism that will address these factors in a more effective manner. Along with
addressing these factors companies can come up with a course of action including rewarding ethical
behaviour, prosecuting the unethical consumers and also stand on their ground when they believe that
the consumer is behaving unethically. The reason behind the growth of unethical behaviour is also the
attitude of suppliers of ignoring and excusing the occurrences of unethical events. The suppliers also
need to be stern when they know that they are correct and should stop worrying about the customer
power as they are correct in this scenario. Suppliers should understand that if they let go the unethical
behaviour then they are no better than the unethical consumers themselves.

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References
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