The Consumer Environment: Regulation and Research -- Discussion

Stephen A. Greyser, Harvard Business School/ Marketing Science Institute
[ to cite ]:
Stephen A. Greyser (1979) ,"The Consumer Environment: Regulation and Research -- Discussion", in NA - Advances in Consumer Research Volume 06, eds. William L. Wilkie, Ann Abor, MI : Association for Consumer Research, Pages: 501-504.

Advances in Consumer Research Volume 6, 1979      Pages 501-504

THE CONSUMER ENVIRONMENT: REGULATION AND RESEARCH -- DISCUSSION

Stephen A. Greyser, Harvard Business School/ Marketing Science Institute

All three of the papers in this session provide us with excellent approaches and useful information with respect to their subjects. While each deals with an independent area -- consumer problems and complaints, consumer research inputs into public policy decision making, and the role of consumer information programs -- all are linked by a concern for consumer input to public policy considerations. In the Grainer et al paper there is a comprehensive approach to gathering information on consumer problems and complaints as an underpinning to government (and business) action with respect to them. In the Evans et al paper there is a manifest concern for building consumer research inputs into public policy decision making. In the Permut paper there is a focus on how research on consumer information relates to the decision-making process in the public sector. All three of these papers address specific issues and problems of great pertinence. All do it in a stimulating way.

Let me comment on a number of specific points about each paper. In the course of these comments I shall offer both deserved kudos (of which there are a great number) as well as a few "slaps on the wrist" (which are relatively few in number). At the same time, I shall also raise some questions about the way the authors -- and we -- approach the issues and problems in this territory.

CONSUMER PROBLEMS AND COMPLAINTS

Grainer and his colleagues report on what is clearly a major study of consumer problems and complaints. Their treatment is comprehensive. The study is well-conceived and well-designed. The results -- even within the length limits here -- are carefully reported, particularly the comparisons with other studies. Further, there is strong sensitivity to measurement problems reflected in the research and the report.

Both in this report and in much of the other research on consumer satisfaction/dissatisfaction, we find a common concern for identifying those problem areas that are of greatest importance. A variety of definitions, of "greatest importance" exist. The TARP research should be commended for incorporating both an incidence measure and a measure of degree of deprivation (cost/ risk) as indicators of importance. All of us should he aware that there are other measures of salience that are pertinent in assessing consumer problems -- e.g., those problems which people remember most clearly, those which generate a high degree of annoyance, etc. My point here is simply that multiple definitions should be incorporated in research of this type -- perhaps even more of them than were included here. An additional point about measurement concerns the action taken by the consumer. Beyond the specific inquiry with respect to taking action, I would like to see a question for those who did not pursue the matter as to "why not?" The responses to this question may tell us something more about salience. They may also tell us more about the ways in which current complaint-handling and complaint-resolving procedures are adequate or not. When a consumer says "It isn't worth the effort," he or she may be telling us that for certain kinds of product categories/kinds of complaints/dollar values involved it is not worth it in terms of the consumer's own view of the value of his or her own time or money. But we may also learn about where the weaknesses are in current systems with respect to "ease of entry" of one's complaint and/or likely resolution thereof.

Two important points raised in the concluding sections of this paper warrant reinforcement. The first of these is the importance of employing a survey methodology on a longitudinal basis in order for it to be put to its best advantage. Second, the authors are correct when they point to the usefulness of exploring operational issues in methodology in this area at this point -- e.g., item sequence, mode of administering interview, etc. In my opinion concern for these kinds of issues is another indicator that the consumer satisfaction/dissatisfaction field has reached a point at least of healthy adolescence, if not of full maturity. Again, I believe that multiple approaches are appropriate -- in order to get a better sense of calibration of the instruments that are being employed. Further, as the amount of baseline data grows, the utility of the data for policy making grows along with it.

A number of questions -- and some observations -- arise whenever I read or listen to a well-done piece of research in this area. (It is only the well-done pieces of research that permit one the time to raise these more basic questions!) Much research of this type concentrates on a perspective from the dissatisfaction or problem end of the spectrum only. Certainly -- at least from the public policy viewpoint -- this is an appropriate perspective. At the same times those doing research from such a perspective should be aware of the fact that one of the elements that puts certain kinds of problems and dissatisfactions into an even broader perspective is the degree to which there are satisfactions and nonproblems with the particular product category, service, etc. In my view at least, business concerns with respect to satisfaction/dissatisfaction -- and business certainly is very interested in this field even absent the public policy concerns -- should take into account the broader perspective just mentioned. In a sense, for certain kinds of problems, we might expect a "normal level" perception of problems or dissatisfaction to exist. In other words, no matter what efforts (by business and/or government) are made at improving complaint handling or complaint resolution there will always be some proportion of people who will respond to the TARP-type questioning about degree of satisfaction with the ultimate resolution of their problem as "I was not at all satisfied." In essence, I am simply citing the phenomenon of elevated expectations that often accompany improvements in substance or process in any area. For example, in our research some years ago on historical attitudes of Americans toward advertising, [Stephen A. Greyser and Raymond A. Bauer, "Americans and Advertising: Thirty Years of Public Opinion," Public Opinion Quarterly, Spring, 1966.] it was intriguing to discover that data seemed to run roughly in parallel on public attitudes toward truth in advertising and toward the standards of advertising: more specifically, even though questions over the years indicated that a large proportion of the public believed that advertising standards were improving, at the same time questions with respect to the truth Quotient in advertising showed a roughly consistent modest plurality saying that advertising did not present a true picture of the products advertised. Cognizant as we were that truth and standards are not precisely congruent, nonetheless the only conclusion we could draw from the consistency of the data over many years was that the public's standards in fact were rising. I believe that the same phenomenon has been occurring and will continue to occur with regard to consumer problems and complaints.

A final point. Personally, I continue to be amazed by what to me are relatively low percentages of households reporting problems of the sort explored here when one considers the vast number of products and services purchased in the course of a year by the typical family in this country. In the TARP study, about one-third of the households reported consumer problems having occurred in the past year. In the Sentry study of American attitudes toward consumerism, we learned that this percentage can be increased by asking simply whether "In the past year or so has there been a time when you wanted to complain about a product or service you have purchased or hasn't that happened?" In response to this question, 63% of a national cross section said that there had been a time. Only 47%, however, answered "yes" to a related question as to whether they "actually did complain." When looked at in conjunction with the TARP data and with Nielsen data -- and when viewed in the broad context of literally millions of transactions taking place annually --I am surprised that the percentage of households who would report a problem -- maybe even a salient problem -- is not very near to 100%! By noting my reactions to these data, I do not mean in any fashion to trivialize the importance of the kinds of problems that consumers indeed do have. From the vantage point of both government and business, we must know about the incidence and the seriousness of the problems that the public says it experiences. Research such as that reported here goes far to offer us a well-honed approach to discerning what these problems are. In turn, that helps both government and business make more informed judgments as to which kinds of problems and issues call for enhanced attention and improved resolution -- and by whom.

PUBLIC SECTOR PERSPECTIVES ON CONSUMER INFORMATION

In the wake of a growing amount of consumer behavior research ostensibly addressed to the concerns of public policy makers or consumer advocates, Permut appropriately explores the question of the extent to which these groups "will even consider research findings --let alone use such research as part of their overall decision-making activities. In a real sense, he raises a number of important questions about the desirability and utility of research information (such as that being presented at much of this conference) from the vantage point of those in the public sector. He appropriately turns his attention to the perceived information needs and the information processing of policy makers themselves. As he notes in his concluding paragraph, he is fully aware of the cogent and pragmatic statement of Wilkie and Gardner that "public policy regarding consumer behavior is going to be made, with or without research evidence."

Despite the importance and the intriguing character of the investigation, there are some key questions that must be raised about the research itself. These are not surprising to any of us engaged in attitude research. One concerns the 50% response rate, particularly with such small samples. A second concerns the small cell sizes in the three individual response groups. A third relates to the validity of gathering information of this sort via an attitude questionnaire without personal interviews. A fourth is the serious question as to whether "consumer groups" are part of the "public sector" in the same way that federal government and state government people are. Rather than batter the research on each or all of these points, I would prefer simply to call your attention to these important questions. I suspect that each of you in the audience can easily contribute at least one paragraph of amplified critique with respect to each of these points!

Thus I would like to turn my attention to the nature of the findings -- however tentative they may be -- and what I think they suggest with respect to those in the government sector and in consumer groups. Before I do so, let me note that the specific subject area selected for examination -- namely, consumer information programs -- is a particularly pertinent one. Public policy proposals with respect to mandated information disclosure are rife. Researchers in the consumer behavior field are conversant with the contentions around the question of "information overload." Thus, opinions from those in the public policy sector about consumer information disclosure and the perceived consequences of consumer information programs are of interest.

Turning to observations on some of the findings, I think it is very revealing of the value system of those in the public sector that there is very strong disagreement on the part of all three respondent groups regarding the possibility of information overload. Virtual unanimity is shown by each responding group with respect to the propositions that required information disclosure helps the average consumer make better buying decisions, that more information is always better for the consumer, that consumer information disclosure requirements are in the public interest whether or not the information is used by consumers. As someone who was involved very early in discussing the value systems and "views of the marketplace" held by those in the public sector (and by those in business), I find the strong consensus on these issues to be fascinating -- even if not surprising. [Raymond A. Bauer and Stephen A. Greyser, "The Dialogue That Never Happens," Harvard Business Review, November-December, 1967.] These are the findings in Table 1 of the paper which I think are most interesting. (Let me note a point of interpretive disagreement with respect to the data on whether "more research is needed to learn how much information is actually needed by the consumer." While it may be true as Permut states that "the least amount of agreement was expressed" for this proposition, the data themselves show a strong positive endorsement for the proposition.)

The next section of the paper focuses on concerns with respect to relevance and usability of research. Here again, I find the data very revealing of the value systems of those involved. In the table below I have reconstructed data from the study in terms of how each responding group views the capability of different people or organizations to judge the information consumers need to make informed buying decisions. In my chart, I have taken each responding group's view of its own capabilities as part of a single row entitled "my organization's capability." What is seen here is that in every case the responding group considers its own capability to be much better than that of "most consumers -- and in every instance each responding group considers its capability to be even greater than that of business. Perhaps I am easily amazed ... but I find this to be more than a simple statement of reinforcement for one's own position and the validity of one's institution. Rather, I find it a manifestation of arrogance -- reflective of the worst dimensions of "big brother" government, and technocratic expertise. [At this point I shall pause and let you reflect on whether I am easily amazed, whether I should simply have said, "this is what one should naturally expect" and simply shrugged my shoulders, or whether I have an unsupportably lofty view of consumers' own capabilities and business' capabilities to learn about consumer information needs.]

TABLE 1

VIEWS OF GROUP CAPABILITIES

Still looking at Table 2 of the paper, I am intrigued that consumer groups believe that neither federal nor state government people are as capable of judging consumer information needs as are consumers and business -- let alone consumer groups themselves, which are (naturally) at the highest level of insight. This suggests to me -- to return to an earlier point briefly --that consumer groups should not be considered analogous to the government groups as part of the "public policy system" with regard to this issue (and other consumer issues as well).

Since Permut's data show that people in the public sector think that information disclosure is an unmitigated good (even to the point of denying increased costs of same), it is interesting to examine their own information sources with respect to consumer research information. In this context again we must note a problem with the sample -- in this case a problem in sample selection, rather than in response rate. The people questioned are those who are "directors or senior staff members" in government and "senior spokesmen" in the consumer groups. These people -- compared with more junior staff people -- are in my opinion least likely to he attentive to what is going on in the consumer behavior research field -- for the usual reasons of the character of their responsibilities, the nature of their early training, etc. Since virtually none of the respondents has any formal background in consumer behavior and consumer behavior research, it is not surprising that Permut finds that they are "content to view consumer information policy issues from the primary vantage point of a lawyer or an economist." The inference I draw from Permut's data on "sources of information and research data" (Table 4) is that consumer behavior people should try to penetrate the law journals more extensively than we have so far!

I find Permut's conclusions with regard to utilization sensible with respect to both policy makers and researchers. All of us need to have reinforced the facts about the world in which public policy makers live. This is particularly true with respect to the style of that world -- dimensions such as political vs. substantive considerations as having leverage in the system, the time span within which policy must be made and actions taken, the "translatability" of research as an important consideration in developing policy and action. Much of the resistance to using research for policy formation (in contrast to looking for supportive research data) grows from an adversary approach for one's job. As Permut notes in his fourth constraint on research utilization, the advocacy tradition in the public sector is a basic value that is largely incompatible with research-based policy formation. Indeed the "I know what is best for the public" philosophy that seems to pervade the responses represents an even larger impediment -- even if one were to overcome the advocacy tradition!

As I have noted already, the major contribution that this paper makes is simply its subject area: research on information processing of policy makers themselves. Certainly that examinations of both the values and the policy making behaviors of these groups -- especially using more clinical rather than survey techniques --will become more frequent among researchers with an interest in this field. I cannot resist a closing comment with only a modest quotient of facetiousness. As researchers, we raise the question as to whether more consumer information will lead to more or less actual information use by consumers. Perhaps we should add to the questions in this area whether more consumer research information available to the public policy sector will lead to greater or lesser use of that research by people in that community!

CONSUMER RESEARCH INPUTS INTO PUBLIC POLICY DECISION MAKING

I've chosen to comment last on this paper because it is "where it all comes together." This is a very important paper simply because it treats the rationale and objectives of trying to build consumer research inputs into public policy decision making in a formal organizational and operational manner. It is in this area that I find the paper to be most worthwhile.

First, I would like to reiterate five points in different parts of the paper. (In so doing I am conscious that the authors (and I) are "preaching to the converted.'') These five points are:

- Policy-related consumer research that is relevant and timely is highly desirable.

- Understanding consumer behavior in the marketplace prior to [my emphasis] developing government policy is desirable.

- Life in the public policy sector generates great pressure to develop quick solutions to specific consumer-related problems rather than research-based policy formation.

- There is a need to move research results into policy and program development.

- There is a need for research "capital building" in order to provide perspectives for sound policies.

At this point again I leave it to each of us in the audience to nod vigorously and amplify any or all of these points with a silent paragraph or two!

Overall, this paper presents a sensible rationale for the new (1976 ff.) role of the Consumer Research and Evaluation Branch. It presents logical and reasonable objectives for research. It indicates patterns and processes which seem sensible to me -- at least on paper. Its classification of three broad typologies of consumer problems (basic market failures, substantive recurring market imperfections, and exigent small-scale market problems) strikes me as appropriate to the different kinds of Bureau responses indicated.

Beyond this sensible description of the structure and operations of the Branch from the organizational and process points of view, there are additional useful elements in the CREB system. These include the ways in which the Branch tries to focus the attention of outside researchers on important policy issues -- as well as the internal research system to be used in defining major problem areas within the organization itself. (If I smile more than a little bit upon reading about a research system that helps to identify research topic priorities, disseminates information about them to the research community, and conducts small group meetings on specific topics ... it is only that smile of recognition of seeing an analogue to some of the systems that the Marketing Science Institute has built in its special research niche over the past five years!)

Having mentioned a number of very positive things about the objectives and structure of CREB as described by the authors, what then are my questions about all this? The most significant one -- and the one which I wish the authors had discussed -- is "How does it work?" I would like a much better sense of what the experience with the system has been over the past few years -- particularly in terms of the user organizations (other governmental departments, etc.). Also, what about the assessment of the viability of this kind of system from the viewpoint of the Ministry (Consumer and Corporate Affairs Canada), and from the viewpoint of the CREB itself at both the management and the research level? Also, what is the view of the outside research community about both its actual opportunities to become involved in research and the ways in which that research has been used?

Obviously, a host of additional related questions can be raised. Again, I think that the audience can -- almost responsively in chorus -- amplify the list of sub-questions under each of the above questions.

CLOSING COMMENTS

As attentive listeners have no doubt recognized, I have already incorporated a number of general comments and observations in the framework of talking about each of the papers. However, I would like to add three more observations in closing -- observations which perhaps will stimulate further discussion of the topics treated today.

The first derives from the work of the TARP research and concerns the identification of problem areas and dissatisfactions of "greatest need" for action. In terms of developing priorities for public policy action (or even business action), we must be able to come up with better approaches to assessing the criteria for need and the criteria for resource allocation. All of us realize that several factors enter into any such set of considerations -- e.g., the incidence of the problem, the salience of the problem, the character of the consequences of not resolving the problem, and even the ease/ difficulty of developing effective resolutions. At some future conference I would be very interested in seeing how government and business organizations are contending with this kind of problem -- given good data (such as from the TARP study) on certain dimensions of the problem.

A second comment is on the importance of learning more about the value systems that are prevalent in the public sector -- especially regarding the role of research. Do people in the public sector see research on consumer issues as an influence on public policy, as a determinant of public policy, or simply as a convenient support (when it is convenient) for their own predetermined perspectives? At future conferences, I would like to see more on this topic -- and more research on actual clinical decision-making processes on consumer issues in the public sector.

Third, I am intrigued by the Evans (et al) statement that there has been a shift in Canadian policy to put more emphasis on actions "designed to 'improve' the consumer's ability to operate effectively" within the marketplace. Even if one is engaged in regulation and intervention -- but certainly if one is trying to improve consumer ability to operate effectively within the marketplace -- one must know more about actual consumer behaviors in the marketplace. (Note the plural because I certainly believe in segmentation with respect to this area!)

A thread that runs through all three papers -- perhaps not surprising at ACR -- is that we must know more about consumer behavior in the marketplace and we must know more about research usage behavior (and attitudes) in the public policy sector. With regard to both, we need to have more interest in consumer research from the public sector itself -- for policy formulation in the short term and in the longer term.

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