Insights into consumer confusion
Consumer Policy Review;
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Volume: |
9 |
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Issue: |
6 |
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Start Page: |
210-213 |
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Subject Terms: |
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Classification Codes: |
7100: Market research |
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Geographic Names: |
United Kingdom |
Abstract:
Consumers
can and do get confused, especially with the massive increase in choice
available and the increase in complexity of products. It seems plausible that
consumer confusion, like most consumer attributes, must have a direct and
significant impact on marketing strategy. Yet most of what is written on the
subject is tangential and scattered over a number of disciplines. A study
explores the various views together under one single heading that will be of
interest to marketers and business managers.
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Full Text: |
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Copyright
Association for Consumers Research Nov/Dec 1999 |
[Headnote]
Not all
consumer confusion is as undesirable as one may think, argues Dr Marcel Cohen
of Imperial College Management School
[Headnote]
ABSTRACT
[Headnote]
Consumers
can and do get confused especially with the massive increase in choice
available and the increase in complexity of products. It seems plausible that
consumer confusion, like most consumer attributes, must have a direct and
significant impact on marketing strategy. Yet most of what is written on the
subject is tangential and scattered over a number of disciplines - Economics,
Ethics, Public Policy, and Consumer Behaviour. This report draws the various
views together under one single heading which will be of particular interest
and relevance to marketers and, more generally, business managers.
While imperfect information has played a major role in the development of
economic theory, it seems surprising that its close associate and marketing
counterpart, consumer confusion, does not appear so far to have been discussed
as a separate and central theme in the marketing and business management
literature.
Consumers can and do get confused especially with the massive increase in
choice available and the increase in complexity of products. It seems plausible
that this phenomenon, like most consumer attributes, must have a direct and
significant impact on marketing strategy.
Our aim here is to open the debate by suggesting three possible types of
consumer confusion and the market responses that they might stimulate. We begin
with a dictionary definition of the phenomenon and then put forward our
hypothesis regarding a generic classification. We then consider each of the
types in turn and draw together views scattered across a number of other disciplines
- economics, ethics, public policy, and consumer behaviour. It seems that
consumer confusion can take more than one form (we hypothesise three forms)
and, as we shall see, not all are as undesirable as one might first imagine.
Confusion types
The Oxford English dictionary suggests a number of nuances to the meaning of
the word, 'confusion'. We have identified three types that are of relevance
which, for reasons that will become clear, we have labelled as types M, B and
D.
A common form of confusion is in the sense of misleading or disorientating
people, in our case, consumers - as in claiming that a food product is 'light'
implying that it is low in calories when, in fact, the food product is high in
calories but the food is light in texture. Often such confusion involves
subjective claims which may not surpass legal definitions but can lead to
consumers making purchase decisions under a false premise. The Advertising
Standards Authority, an industry body, dictates in its voluntary code of
practice[1] that documentary evidence must support all claims but only for
those that 'are capable of objective substantiation'. So questionable
subjective claims can and do exist. In order to distinguish this form of
confusion from other forms and since ,misleading' is at the heart of this
phenomenon, we label it 'Type M'.
Another form of confusion stems from the complex nature of the product. In
the case of window double glazing, the thickness of glass can clearly matter to
consumers but so can the gap between the two layers of glass, whether the frame
is made of hard wood or soft wood, the kind of security locks attached to the
unit, etc. Similarly for cameras, mobile telephones and other complex products,
a number of features will be presented to the consumer which may cause
difficulty and obscure the features that are most relevant to the consumer.
Even supposedly less complex products, such as milk, will have a number of
important features such as the fat content, whether pasteurised, whether
organic, long life, etc. In practice most products have multiple features that
complicate the purchase decision and indeed Consumers' Association's Which?
magazine is largely dedicated to unravelling the key features that consumers
should consider. In such cases confusion arises because the presence of a
number of product features causes bewilderment to consumers. We label this form
of confusion 'Type B' since bewilderment is at the heart of the phenomenon.
Our last generic form of confusion stems from the nature and number of
alternatives. Even if there existed a product which is truly simple with just a
single feature (that is, with no Type B confusion), we could conceive confusion
arising from alternatives being mistaken for each other - in effect, a case of
,mistaken identity'. Such alternatives may be 'horizontal' in which case the
consumer fails to distinguish between one supplier and another - as for
example, BP and Shell four-star petrol. The alternatives may be 'vertical' in
which case the consumer fails to distinguish between one product and another
product of superior specification - as for example, four-star and five-star
petrol. In both cases the confusion arises because consumers cannot
discriminate between alternatives.
The impact of such confusion is demonstrated by Murphy[2] who comments on
empirical evidence which shows that 17 per cent of consumers who intended to
buy premium brands, mistakenly bought own-label brands. Consistent with our
nomenclature, we label this form of confusion 'Type D' since (the lack of)
discrimination is at the heart of this phenomenon.
In practice both Type B and Type D confusion can and do co-exist - as for
example, a cola drink. Cola, which one might think is a relatively simple
purchase, portrays a number of features - for example, its sugar content,
caffeine content, temperature and size - and so the purchase is to some extent
bewildering (portraying Type B confusion).
Yet even if consumers are able to focus on a desirable specification, they
are sometimes unable to distinguish between competing brands, be-it CocaCola,
Pepsi Cola or Sainsbury's. (This is Type D confusion.)
Confusion Type M -'misleading'
The potential to mislead consumers arises when suppliers go beyond informing
consumers about attributes of their products and, instead, attempt to persuade
consumers to buy the products. As Nelson[3] points out, this is particularly
important when the product itself has to be experienced and therefore cannot be
evaluated prior to purchase. The misleading often takes the form of slight
exaggeration or the use of graphic language - such as 'smooth as silk', 'as if
by magic' - which may be harmless. However, as Richards[4] remarks, such
exaggeration can become severe to the point that it becomes misleading or
arguably illegal.
The claims usually cannot be easily proved to be true or false - as in the
case 'will help weight loss as part of a calorie controlled diet' - and can
imply benefits that are beyond what the product can actually provide and are
therefore misleading. In the limiting case, suppliers are in fact cheating on
quality in claiming a certain product quality but providing another. Klein and
Leffler[5] have modelled a similar situation albeit with a strong assumption
that cheating on quality gets found out rapidly. They argue that given a choice
of a single period where cheating can yield high profits or a number of periods
with no cheating on quality that the latter is more profitable that is,
cheating does not pay. In practice, suppliers tend to avoid cheating and go to
great lengths to do so - as in the case of FADS (DIY store) own label paint
when it was first launched which stated on the tin 'to be used if you are
moving'.
The ethical perspective of misleading customers is encapsulated by Laczniak
and Murphy[61 who suggest that whether a supplier can be said to mislead
consumers depends on three criteria - intent, means and consequence. Each of
these can separately and in combination with the others cause the consumer to
be misled. The authors then suggest guidelines through which misleading
consumers can be avoided.
It is clear from the above that misleading consumers (Confusion of Type M)
is undesirable from both an economic as well as an ethical perspective.
Confusion Type B - bewildering
The possibility of bewilderment (confusion of type B) arises when consumers
have to face a purchase decision. In the lead-in to the purchase decision,
consumers undergo a process of information search to help them decide which
purchase to make. This can involve both time and money and is well documented
in the consumer behaviour literature - see for example, Blythe.[7]
While information gives the consumer confidence in the ability to judge or
evaluate product attributes as discussed by Bennett and Harrell,[8] others such
as Jacoby[9] point out that too much information can lead to 'information
overload'.
This means that in effect consumers cannot cope with all the facts and can
be forced to disregard important information, leading to poorer purchase
decisions. This line of thought however does have opponents and has been
debated actively - for example Malhotra[10] - and will undoubtedly continue to
be a point of contention. Our own position, as described in Cohen,[11] is that
'too much information is harmful to the consumer' because, as demonstrated by
our empirical evidence, it inhibits price competition.
Practical examples of this type of confusion are many. Morri[12] refers to
the confusion for which the mobile telephone industry is notorious. Consumers
may be attracted by an offer of a relatively inexpensive telephone only to find
that they should have focused on line rental charges and call rates, to say
nothing of connection charges. Another industry plagued with confusion of this
type is the homeopathic industry. Weisz[13] describes how suppliers distribute
'guidebooks' at the point of purchase to explain how the products work.
It seems that in practice, some suppliers intuitively have tried to avoid
this form of confusion. Mehegan[14] reports how Braun and Remington will both
repackage their shavers in an effort to reduce confusion about product
features.
Conversely, others, particularly supporters of the possible presence of
'information overload', see profit opportunities that can arise from confusion
for example, as has been alleged regarding mobile telephone operators.
Confusion Type D
The thrust of the literature is that confusion of the type that does not
allow consumers to discriminate between alternatives (Type D) should be avoided
see for example Crain[ 15] when referring to cars. The motive behind this view
is the protection of trademarks (such as brandnames and logos) from
infringement. Simonson[16] claims that the value of trademarks depends on the
ability to protect them from confusion with others and has constructed two
large scale field tests to measure the extent of such confusion. The
impersonation of trade marks can take the form of similar logos as reported by
Gold and Kim[17] for security firms and also Mitchell[18] for debit cards. It
can also take the form of copycat packaging as in the case of store brands as
reported by Erickson[19] who states that 'rip-offs have become routine and are
brazenly displayed next to competitive national brands'.
One need only visit a local supermarket to witness the similarity in
packaging between the store own brand and the premium brands. Arguments used in
lawsuits and judgements made are being scrutinised with interest. Lans[20]
shows how survey data can be used to demonstrate this type of confusion and
what the basis of the survey must be in order for the results to be considered
conclusive in a court of law. Erickson[19] states that 'the key is proving that
the clone products are misleading consumers who may think they are buying
national brands'. Jacoby and Morrin[21] report the use of disclaimers on the
packaging as in 'not manufactured or authorised by ... 'as defence against
accusations of cloning.
It is clear that this type of confusion is quite rife and that in general It
is frowned upon. However, there are researchers that have provided some
rationale why this form of confusion, under certain circumstances, can be
beneficial to many competitors.
Grossman and Shapiro[22] have attempted to model the impact of information
(and conversely confusion) using a spatial representation of the market (in the
tradition of Hotelling[23]). They assume that uninformed (in our terms,
confused) consumers buy randomly. They then introduce information but this has
both a favourable and unfavourable consequence for any particular competitor.
It does enable consumers whose prefer the competitor's product to buy it. But
it also dissuades other consumers who now realise that the product is not quite
what they were seeking and who otherwise might have bought it in ignorance.
From this analysis it seems that the weaker competitors do have scope to gain
from this type of confusion.
Therefore we can conclude that whilst the popular view is that confusion of
Type D is harmful in fact it can be beneficial to certain competitors.
Combination of Types B and D
As stated earlier in practice both confusion of Type B and Type D can
co-exist. Cohen[11] shows both theoretically and through an empirical
demonstration that as the number of alternatives on offer to the consumer grows
so comes with it some form of confusion, closely related to the combination
that we are currently considering, which he labels DIF-ness. This is a
distortion of information which arises because of the information overload
experienced by the consumer. The information overload emerges because of the
number of alternatives on offer (leading to confusion of Type D) and the number
of features relevant to each alternative (confusion of Type B). The distortion
that results (DIF-ness), can be said to cause the consumer to muddle brand
features with each other, leading him to make purchases that are sub-optimal
with respect to his utility. This in turn can be exploited by some competitors
to charge prices that are higher than they would otherwise be - in other words,
price competition is inhibited. Note that all competitors, not just the weaker
ones, can gain from this combination of confusion.
Summary
In order to draw together the different perspectives on confusion - a
subject area that we believe to be important to marketers and business managers
- we have suggested a simple classification framework: Confusion based on
'Misleading' (Type M), 'Bewildering' (Type B) and the lack of 'Discrimination'
(Type D). We have presented the various views held on this, as yet unproven,
hypothesis in the hope that this exposition will prove helpful and stimulate
debate which in turn will develop this important subject area.
While the validity of our hypothesis is largely an empirical matter, on the
assumption that it will stand up to some scrutiny, our initial broad conclusion
is that not all confusion is as undesirable as one might first imagine.
'Misleading' (Type M) consumers is not justifiable on both economic and ethical
grounds but in each of the other two types, there appears to be some doubt and
arguments can be put forward in favour of consumer confusion. This may not be
entirely surprising since, after-all, consumer confusion, like imperfect
information, is a market imperfection which allows higher profits to be
generated.
[Reference]
REFERENCES
[Reference]
[1]
Advertising Standards Association Codes of Practice (9th Edition),
www.asa.org.uk
[2] Murphy, C. (1997). '17 per cent of shoppers take own-label
brands in error, Marketing, 6th March, p 1.
[3] Nelson, P ( 1970). 'Information and Consumer Behaviour, J.
of Pol. Econ, 78, p3 11-329.
[Reference]
[41
Richards, ).I. (I 990).'A 'new and improved' view of puffery', Journal of
Public Policy & Marketing, 9, p73-84,
[5] Klein, B. and Leffler, K.B. (1981).'The Role of Market
Forces in Assuring Contractual Performance',]. of Pol.Econ, 89, p615-641.
[Reference]
[6] Laczniak
G.R. and Murphy, PE. (1993), 'Ethical Marketing Decisions - The Higher Road',
Pub Prentice-Hall.
p 102-103.
[7] Blythe, J. (1197). 'The essence of consumer behaviour',
Pub Prentice Hall, p 120-124.
[8] Bennett, PD. and Harrell, G. (1975). 'The role of
confidence in understanding and predicting buyers' attitudes and purchase
intentions', Journo) of Consumer Research, 2,
p 100- 117,
[Reference]
[9] Jacoby,
J. ( 1984), 'Perspectives on Information Overload', Journal of Consumer
Research, 10, p432-435.
[10] Malhotra, N.K. ( 1984). 'Reflections on the information
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p436-440.
[11] Cohen, M. (1999). 7he impact of product selection on
price competition - a double-edged sword', Applied Economics, Forthcoming.
[12] Mori, A. (1997). 'Carriers lament consumer confusion',
Telephony, 21 Jul, P50.
[Reference]
[13] Weisz,
P (1994). 'A healthier choice? Herbal, homeopathic gain acceptance', Brandweek,
18 Apr, p.26-29.
[14] Mehegan. S (1998). 'Remington, Braun vie on packs',
Brandweek, 19 Jan, p8.
[I S] Crain, R- (I 998).'After MercedesChrysler deal, BMW
should buy Oldsmobile and Buick, Advertising Age, 18 May, p32.
[16] Simonson, 1. (1994). 'Trademark infringement from the
buyer perspective: conceptual analysis and measurement implications', Journal
of Public Policy and Marketing, 13, Issue 2, P 181-199.
[Reference]
[17] Gold,
L. E. and Kim, H. (1997).'How to protect your service mark', Security
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[Reference]
[18]
Mitchell, R. (1997). 'Move over, regional networks', Credit Card Management, 8,
Issue 1 1, p56-59.
[19] Erickson, G. ( 1994). 'Seeing double', Brondweek, 35,
Issue 40, p30-35,
[20] Lars, M.S. ( 1994). 'Survey research can be persuasive
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[21] Jacoby, J. and Morrin. M. (1998). 'Not manufactured or
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[Reference]
[22]
Grossman, G.M. and Shapiro, C. (1984). 'Information advertising with
differentiated products', R Econ Studs, 5 1, p63-8 1.
[23] Hotelling, H. (1929). 'Stability in competition', Econ.
J., 39, 41-57
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