Philosophies of Consumer Information Programs

ABSTRACT - Consumer information programs based on independently conducted or verified tests are seen as instruments of private and public consumer policy. Such programs may serve as an integral element of two-way Market Information Systems. A diversity of decentralized, voluntary and pluralist programs is most compatible with American philosophy of man and his markets.

Citation:

Hans B. Thorelli (1977) ,"Philosophies of Consumer Information Programs", in NA - Advances in Consumer Research Volume 04, eds. William D. Perreault, Jr., Atlanta, GA : Association for Consumer Research, Pages: 282-287.

Advances in Consumer Research Volume 4, 1977   Pages 282-287

PHILOSOPHIES OF CONSUMER INFORMATION PROGRAMS

Hans B. Thorelli, Indiana University

ABSTRACT -

Consumer information programs based on independently conducted or verified tests are seen as instruments of private and public consumer policy. Such programs may serve as an integral element of two-way Market Information Systems. A diversity of decentralized, voluntary and pluralist programs is most compatible with American philosophy of man and his markets.

THE NEED FOR SKYHOOKS

The United States has proceeded further and faster in adopting measures of consumer policy, public and private, than any other nation, excepting Sweden and, possibly, Norway (Thorelli and Thorelli, 1977; Johansson, 1976). Generally, each new step has been taken on an ad hoc basis, addressing itself to some specific problem. Although presumably reflecting our economic, social and political environment, taken as a whole these measures express pragmatic temporizing rather than a coherent, overreaching philosophy of consumer policy. This is an appropriate moment to philosophize about consumer policy. Some bridges need to be struck every now and then between our skyhooks of philosophy and our grassroots of policies, in order that we may see clearer where we are going (and maybe where we should be wary of going). We have also temporized so much that some troublesome inconsistencies are beginning to appear in some policy areas, while we are seemingly unable to see clearcut opportunities for synergy in others. Finally, the writer has a strong premonition that we are at a threshold of important new developments regarding consumer-oriented market communications systems in general and consumer information programs in particular. Having spent seven years of research on such programs I feel in some measure not only qualified but morally obliged to discuss some important philosophical and political implications and conclusions.

CONSUMER INFORMATION PROGRAMS: A SUBSET OF CONSUMER POLICY

In some respects the topic at hand might as well have been labeled "Philosophies of Consumer Policy." Each of the three main approaches to consumer policy may he used to implement a similar and broad range of alternative policy objectives. In a paper before the 1972 ACR conference these three approaches were identified as consumer education, information and protection (Thorelli, 1973). What is meant by education and protection is probably reasonably clear. Consumer information in this context is data concerning specific products, services, brands and suppliers in the marketplace. The consumer Market Information System (to the extent that we can speak of a system here) comprises commercial, personal and independent sources. Consumer information (CI) programs is a technical term referring to info about consumer products and services provided by a party with no direct commercial interest in the promotion of these offerings. The most well-known CI program in the world is Consumers Union (Thorelli and Thorelli, 1974).

Education, information and protection are interdependent in various ways. The use made of one of these approaches inevitably has implications for the others. Although specifically aimed at CI, some of our observations are indeed relevant to consumer policy as a whole. In addition to their growth potential a good reason to emphasize CI programs is their potential as political instruments. This potential is obvious with regard to education and protection as well as commercial and personal information sources. Although in many respects more "innocent" from the standpoint of manipulation, even the most objective of extant CI programs do contain some elements of subjectivity. At a minimum, such an element enters the minute overall judgments about market offers are made based on more then one characteristic of these offers. No program as yet uses multidimensional scaling to establish an objective weighting scheme. Even if they did, this would in itself imply a major political value, namely, that the consumer by and large knows best what is good for himself. The apparent innocence of CI programs could lay them open to subtle and insidious abuse in the hands of even well-meaning policymakers.

ECOLOGY OF CI PROGRAMS

Policies and programs do not develop in a vacuum. They are responses and initiatives conditioned by the social, economic, political and cultural environment, and they develop in constant interaction with it. To articulate a philosophy of consumer policy in general and of CI programs in particular one needs two major building blocks: an analysis of the ecology of such programs and a view of the man who inhabits it. Given different views of man, different programs may be applied in similar environments. This will become clear later. In this section the focus is on the ecology of CI programs in the United States. In large part similar conditions apply in all highly developed countries.

The consumer is offered an almost boundless range of products (services) and brands. Concomitant with the perennial proliferation of products and services is the increasing technical and functional complexity of the average offering. These are the prime causes of the yawning and growing Consumer Information Gap, although there are other ones (Thorelli and Thorelli, 1977). The vast selection combined with considerable discretionary buying power should result in a greater real freedom of choice than in any other society in the history of mankind.

Yet critics, consumerists and other concerned citizens have questioned whether as an individual the consumer is actually in a position to exercise his "sovereignty." With us, some have observed the existence of information gap in the way of deliberative choice. Packard and Galbraith proclaim that the consumer is in fact manipulated by hidden persuaders and by a technostructure which itself defines the consumer "needs" which it then sets out to "satisfy," making a farce of the very notion of freedom of choice and consumer sovereignty. Others complain that in the open market system as we know it today any new product or offer is contingent entirely on producer initiative, leaving the consumer in what they view as a passive role of approving or rejecting. The last group apparently fails to consider that every consumer is free both to publish his ideas, to take out patents, and/or to go into production for himself or with others. [The analogy here with the political marketplace is, of course, striking.] Yet the point remains that the market information flow is a great deal stronger from seller to buyer than in the opposite direction.

This brings us to a brief consideration of the current market information system from a consumer point of view. Commercial information sources, primarily advertising, no doubt constitute the single most important provider of product and brand information. Advertising is likely to retain this role as long as we retain an open market system. We may note in passing that advertising has a weakness in common with comparative test reports in that generally it is not available at, or even oriented to, the specific time and point of purchase. In addition to providing functional information advertising is likely also the single largest contributor to the vast pool of unstructured and misleading quasi-info (noise) characteristic of all areas of modern life, from politics to gardening, from Journalism to Consciousness III. Thus, advertising is a major contributor both to consumer information and to Consumer Information Gap.

Advertising contains an objective (0) and a subjective (S), persuasive component. The borderline between the O and S areas is often difficult to draw. Both components are clearly legitimate. P & G (Packard and Galbraith, not the soap boys) contend, however, that the S-component is far too dominant, resulting in wholesale consumer manipulation. The manipulation argument is too simple. Indeed, it does suggest that P & G are far more naive than the consumers of whom they have such a low opinion. Suasion is counterbalanced by a host of factors, as suggested by Figure 1 (from Thorelli-Thorelli, 1977). Nevertheless, we shall be advocating the view that some of the counterbalancing elements need fortification.

Personal information sources comprise prior experience of the product, personal inspection of it and the consultation of friends and relatives. These sources are clearly important, though not always of positive significance. My experience of the 12-year old GE refrigerator may or may not be of relevance when I want to buy a new one. The experience may also be colored by accidental impressions and by rationalization. Personal inspection of the TV set in the store may or may not reveal the characteristics of importance to me. The objectivity and reliability of my friends may not differ much from that of advertising.

CI programs constitute the independent sources of product information. As all CI programs are based on tests we have sometimes referred to them collectively as the Testmakers. In the present context different modes of reporting is their most interesting and distinguishing feature. Thanks to Consumer Reports we are all familiar with comparative testing (CT). You get a wealth of information calling for reader concentration and for planned reading, as the info is not generally available at the point of purchase. Next comes informative labeling (IL), an activity in which an organization, after establishing certain norms as to the range and depth of information about product characteristics to be declared on the label, will permit interested producers to attach the informative label of the organization to their products. Thus IL is available at the point of purchase. The label on a certain brand of a given product will state where on the scale established for each characteristic (color fastness, proportion of wool contents, etc.) that particular brand is to be found. This is determined in advance by tests. Relative to CT, IL yields simplified, condensed and, generally, more easily digestible information. The United States has no broad-spectrum IL program, but we do have an ominously growing flora of narrow-gauge programs, such as wool products, drug, automobile price sticker and appliance energy labeling.

Quality certification (QC), as the term suggests, indicates that the product carrying the seal (a gold star, say) at least measures up to a minimum norm or threshold level of performance or materials contents established by the certifying agency. Again, advance tests are performed and products may carry the seal only as long as they comply with, or exceed, the minimum norm. Product-affixed, the seals are available at the point of purchase. Quality marks represent a further simplification (and, hence, a loss) of information relative to labeling. The United States does not have a broad-spectrum QC program, although the Good Housekeeping seal may be an approximation thereof. Among narrow-gauge American QC programs that of Underwriters Laboratories is fairly well known and that of the USDA is fairly notorious (Miller, 1975). In the offing are combined IL-QC programs as well as computerized CI data banks.

No pretense should be made for CI programs as a panacea for Consumer Information Gap, though we shall soon argue that they have an important role to play. We have noted that no matter how independent and "objectivistic", no current CI program is free from subjectivity. We also need a lot more info about the programs themselves. Relatively little is known about their impact on consumers. We know less about what type is best under given circumstances. We know next to nothing about the interaction of commercial, personal, and independent sources of consumer information.

Although we know relatively little about the impact of CI programs on consumers what we already know does indeed constitute an essential element of CI program ecology. We know that from the point of view of information-mindedness and CI use consumers may be divided into Information Seekers, (IS), Average, (AC)and Underprivileged (UC) consumers (Thorelli- Becket- Engledow, 1975). These types exist in all industrialized countries, though in varying proportions. Although no solid definitions and estimates exist, we would guess that among Americans 15 percent are IS, 60 percent are AC and maybe 25 percent are UC. It is to be noted that an IS may well behave like an AC in certain markets, and vice versa. In testimony before the FTC we have observed that when it comes to information needed in the funeral buying decision all consumers are underprivileged, as the industry does a good job of withholding comparative product information.

The IS group is of key interest. A vast majority of IS are highly educated, middle and upper-middle class consumers, members of families of which at least one member has a professional or managerial job. IS are almost the sole users of CT reports, but they are information-minded to the degree that they tend also to use corner-cia1 and personal information sources to a greater extent than AC. They are readers more than listeners and viewers, while the reverse is true for AC. Generally positive to the open market economy, they are more skeptical about specific business practices than AC. Similarly, while accepting the necessity of advertising in such an economy (and making fairly heavy use of it), IS tend to be more skeptical about particular practices and effects of advertising than AC. IS tend to be cosmopolitan in outlook, while AC are more parochial.

These characteristics are of great significance to managers of CI programs. From an overall consumer policy point of view some other characteristics of IS are even more important. We know about the IS that much more than AC, they will personally enforce consumer rights, personally make complaints and exercise other consumer responsibilities, keep suppliers on their toes by pinpointing poor service, deficiencies in products, out-of-stock conditions, misleading advertising and other malpractices, voluntarily finance CI programs (such as Consumers Union), disseminate information and advice to fellow consumers, serve as proxy purchasing agents for many less information-conscious and planful consumers.

FIGURE 1

MAJOR DETERMINANTS OF CONSUMER SOVEREIGNTY

FIGURE 2

SIMPLIFIED VIEW OF PLURALIST MARKET COMMUNICATIONS SYSTEM

The IS do perform the role of St. George; they are the vigilantes of the marketplace. In effect, they constitute a public good in more than one sense. In open market economies there simply cannot be any adequate substitute for this exercise of grass-roots consumer professionalism.

Radical spokesmen have objected to the pacesetter role of the IS. In their view, it is undesirable that average consumers assimilate middle-class values and tastes that they can ill afford or which are out of touch with their styles of life. There is actually little ground for this objection. Individualization of demand is stronger among IS than among AC, leaving room for ample variation. At the same time, it is probably true that on balance IS are more concerned with the functional features of products than AC. A typical example of what we are speaking was the fantastic success of the classic Volkswagen "beetle" in the United States. The prime cliental in the early years were well-to-do professional people, not the workingman lower middle-class family anticipated by the makers of the car. Important, too, of course, is our prior observation that many AC in effect are IS when it comes to certain products of interest to them.

PHILOSOPHY OF THE RADICAL LEFT

Dramatically different philosophies of consumer policy and of CI programs may thrive in environments which are remarkably similar in affluence, level of education and proportion of Information Seekers of the total population. This will be illustrated in the last two sections of the paper. This section examines the philosophy of the consumer radicals on the fringe of the so-called Left Twist, which has provided the impetus in Swedish politics during the last few years. By way of contrast, in the last section we shall try to define a CI program philosophy for the U.S., based on the American heritage of values as currently interpreted.

Swedish consumer radicals take a paternalistic and rather pessimistic view of man. The average consumer is ignorant and naive. Not able to see his own "real" needs, he is defenseless before the barrage of seller propaganda. His only hope is a benevolent, omniscient and protective regime. Freedom equals equality. As there is little hope consumers will emancipate under the influence of education and info programs, equality in practice means leveling, "nivelation." Not denying the existence of the IS, radicals are vehemently against spending public moneys on CI programs which, in their view, will merely reinforce existing inequities. Under the impetus of this kind of thinking Sweden has "developed" from being one of the two or three leading nations in the area of CI programs ten years ago to literally having no program at all in 1976.

Radicals have other objections to CI programs. Such programs are focused on inter-brand comparison. But the proliferation of brands and models is relatively meaningless, and likely serves the interests of individual producers rather than those of consumers. Comparative testing is truly meaningful only when it has an inter-product, inter-functional or product systems focus. IL mainly serve the IS, and therefore is of little use. The normative, simplified nature of QC programs make them more acceptable for reasons that should soon be evident.

Some radicals also criticize current-type CI programs as allegedly promoting materialism by drawing the attention to products and gadgets. This particular objection may be summarily dismissed. CI programs are neutral with regard to whether or not the consumer needs a particular product. Indeed, for those interested in spiritual pursuits CI programs should have considerable attraction, in that they permit faster and more efficient procurement of the things material needed by even the most spartan of citizens. By improving the quality of buying they also help conserve resources.

In a world of equalism where the consumer fails to see his real needs and most CI programs are considered dysfunctional, what is the radical medicine? It is a set of policies focused on normative or ordained consumer needs, the satisfaction of which is primarily implemented by government regulation and protection. Proceeding from an underlying notion that there is a single consumer interest, radicals would establish these normative needs (which, somehow, they prefer to call "objective") by political and administrative processes. Jawboning and direct regulation would be used to bring sellers in line. An array of laws and agencies would protect and assist the consumer at every turn. In the more extreme versions of this thinking the consumer would be blessed ultimately with complete freedom from choice.

What would be the role of those two other strands of consumer policy, education and information? It would be a secondary one. To the extant that education could be used to bring about greater understanding among citizens of their normative needs, it would clearly be helpful. Testing focused on inter-product comparisons (own house vs. apartment, say) might well be encouraged. In the long run, however, the logic used by radicals against inter-brand testing would again apply: if apartment complexes are found to be superior from a societal (ordained needs) point of view, what is the sense in tolerating the continued production of free-standing houses? QC programs could have a fairly important mission - at least as a transitory measure - as indicating the brands and models which have gained the official approval of the government consumer bureaucracy. In addition, a mandatory CI program simply authorizing the government on a product-by-product basis to order sellers to supply whatever information deemed needed clearly would have special value in the kind of consumer policy and market system envisaged by radical thinkers. In the last few years legislation giving blanket authorization to government-mandated CI has been passed in both Norway and Sweden. It is too early to tell what the effects will be (Thorelli and Thorelli, 1977).

As might be expected, only government agencies could be entrusted with CI programs. Indeed, Sweden has just taken the final steps towards centralization of all consumer policy in the hands of the State Consumer Board.

The extreme right and the extreme left often have ideas in common as well as in opposition. The radical right would agree that the consumer often does not know what is best for him. The medicine again is paternalism, but now practiced more by business than government. Rightists would also agree that current-type CI programs essentially is a waste of money. However, they would arrive at this conclusion by way of a different route than the radical left, that is, the old conservative notion chat human nature will not change.

A PROGRESSIVE PHILOSOPHY FOR THE UNITED STATES

An interpretation of the mainstream American view of man as consumer will first be presented. On this basis we shall draw a set of inferences concerning private and public consumer policy and notably regarding CI programs.

Two fundamental premises underlie the American view of man as a consumer. Americans believe in self-reliance and self-actualization as cardinal values. In general, the self-reliant and self-actualizing consumer knows better than anybody else what is "good" for him. This leads to the second premise: within the limits of his own resources the individual has the right to consume whatever he wants whenever he wants to, as long as his behavior does not impinge on the equal rights of others or is not proscribed by overreaching societal considerations. Societal regulation of consumption - whether in the name of the people or the individual himself -should be the exception rather than the rule. Its principal object is help to self-help rather than the exercise of benevolent paternalism. Freedom in such a society tends to be equated with opportunity rather than with equal distribution of resources. Put differently, equality of opportunity tends to seem more important than equality in standards of living. As the economy grows, everybody benefits. In the long run, consumer and producer interests have at least as much in common as they do in conflict.

From the citizen's fundamental right to arrange his own pattern of consumption are derived the four consumer rights officially endorsed since the Kennedy administration, that is, the right to free choice, to be informed, to be heard and to be safe. As always in democratic society, for each right there is a corresponding responsibility (Thorelli, 1972). The open market for its survival is dependent on at least some consumers exercising their responsibilities at least some of the time. This is precisely where IS come in. It is also where self-reliance and capacity for independent evaluation of market stimuli enter in. We must have the right to make foolish decisions from time to time, but no one should have to do this due to ignorance. Autonomy calls for equality of opportunity in decisionmaking.

Consumer emancipation is conditioned on education and information. We need obligatory consumer education in our schools. A program focused on consumer civics: understanding the market system, consumer rights and responsibilities, the decisionmaking process, budgeting, the setting of priorities and the development of independent Judgment. Not least do we need consumer education to stimulate information-mindedness. This is superlatively important in view of the paradoxical fact that presently consumers tend to think that they are well-informed in their buying decisions in inverse ratio to their actual degree of informedness.

The IS constitute a consumer elite. The presence of elite groups is a characteristic common to all viable societies in human history. IS serve a vital function as safekeepers of the open market. The question raised by consumer radicals is, Should we deprive all consumers of the Right to be Informed just because only a minority make use of it? It is analogous to the question, Should we abolish national parks because only 15 percent of the population visit them, and should we abolish the universities because only one-fourth of all our youngsters attend them? The answer is "no." What we want in a democratic society is equality of opportunity with focus on mobility: everyone must be free to become an Information Seeker.

For this purpose we need a variety of CI programs in addition to obligatory consumer education. Thanks to Consumers Union and Consumers' Research IS have long had access to CT reports. But in the name of AC and UC we also need simplified programs oriented to the point of purchase. A combined, broad-spectrum IL-QC program should have first claim here. Though the format and testing procedures would be unified, the labeling and marking aspects of the program might well be administered by separate groups to ensure pluralism and diversity in approach. Producing a public good (the information would be freely available to everybody) and voluntary in nature, such a program would be dependent on business and government for financial support and individual firms for participation. Consumer representatives should have a major voice in the determination of relevant characteristics and testing methods and in the establishment of suitable quality thresholds. As part of a comprehensive effort to emancipate UC there should also be supplementary programs in the information area, including consumer advice centers and special fairs or display centers facilitating comparative shopping. Programs intended for UC would emphasize visual and oral media as well as interpersonal contact rather than reading materials.

Mandatory CI should be restricted essentially to areas of health and safety. Governments, business and foundations should be encouraged to support experimentation in the development of new types of CI programs, such as computerized CI utilities. Such data banks have the inherent advantages of permitting custom-tailored information based on men-machine dialog as well as the inclusion of local price, availability and service data not typically obtainable in other CI programs. Research on the technology and impact of CI programs should be promoted by the National Science Foundation and others.

We agree with the criticism that there have been too few cross-product and product systems tests in the past. The consumer should be aware of the advantages and disadvantages of canning and freezing as methods of preserving his garden vegetables before he starts choosing between various brands of canning equipment. However, the choice between products is often much more clearcut than between models and brands. The criticism of brand testing claims it is unimportant on two scores. First, many brands and models are closely similar. Critics overlook that this, when true, is a matter of critical interest to many consumers. Armed with the knowledge, they need not shop around for model differences but simply for price, service, etc. The publication of such test results is also likely to stimulate manufacturers to improve their products, to specialize more on a niche of the market or to compete on price. The second criticism is that brand testing is inherently trivial: Why test ten different deodorants while the world burns: The obvious counterquestion: why do so many people use deodorants while the world burns? Would life be more pleasant if they didn't?

An important part of the philosophy of CI programs concerns their interaction with other forms of product information. By setting a tone of matter-of-fact, CI programs will likely help upgrade the quality of advertising. Indeed, informative labels and quality marks are eminently suitable for direct inclusion in advertising. As interest in better product info becomes more widespread print and broadcast media are bound to give much more attention to product reviews, much like movie or theater reviews at present. Superior information in itself will emerge as an important competitive strategy for many firms.

How much information is "enough"? Benefit-cost analysis will not provide the answer. The philosophy expounded here provides a fairly simple guidepost: the consumer has the right to know just about anything relevant to his buying decision as long as it would not entail unreasonable cost to supply the information. For perspective we may note that the cost of CI programs in the score of countries where such programs exist rarely exceeds 1/1,000 of what business spends on advertising alone in the same period. Research on unit pricing and the costs of labeling programs indicate that the cost of such measures in large-volume operations is fairly trivial.

Progressive philosophy is based on an optimistic view of man and his capacity for self-improvement. To those who view the consumer as ignorant, dumb or a helpless victim of manipulators, we say: why should we not trust the consumer to make his own decisions on products and brands in a society where we do not hesitate to let him decide on a suitable career, a suitable spouse and a suitable community in which to live? Ours is a philosophy emphasizing consumer information and education before protection. The road to protection has no logical end. Ail we know is that it does not lead to autonomy and self-reliance. This does not mean that protective measures should be ruled out. It does mean that the burden of proving the desirability of new protective measures should be on the would-be protectors. It also means that information and education should be given a much more prominent place next to direct regulation in agencies such as the Consumer Products Safety Commission and the Food and Drug Administration. Generally, the many opportunities of synergy among information, education and protection measures should be prevailed upon much more than at present.

Consumer policy in this view is more a private (consumer groups, business, media), pluralistic and voluntary matter than a public, monolithic and mandatory one. We should envisage that business and consumer groups can meet in fruitful cooperation in a fashion analogous to business and the labor unions. Governmental measures are frequently necessary or desirable, but we must not fall in the trap of thinking that governments have, or indeed should have, a monopoly on consumer policy. CI programs in particular are in need of continued experimentation, free-form development, and even a dash of competition. There is simply no way in which a monolithic government body could adequately represent all consumer interests in the supersensitive area of product information and certification. The danger of a few know-it-ails trying to impose their values on the rest of the population can hardly be overestimated.

Variety is called for, but within a framework of overall coordination. Individual CI programs should view themselves as elements of a CI system in decentralized orchestration rather than as fragmented measures in splendid isolation. Information programs should reinforce education and protection in the global view of consumer policy, private and public.

Beyond the CI system is the truly two-way Market Information System serving both buyers and sellers. Figure 2 gives a highly simplified view of such a pluralist market communications system. Here CT represents all varieties of CI, manufacturers represent distributors as well, and underprivileged considers, governmental agencies, educational institutions, etc. are excluded for reasons of practicality. Even so, the figure points to several lacunas in current systems and to opportunities for improvement and cooperation presently underexploited.

The ultimate rationale of the progressive philosophy is simple. The informed consumer is the protected consumer - more than that, s/he is the liberated consumer.

REFERENCES

Johnny K. Johansson, "The Theory and Practice of Swedish Consumer Policy," Journal of Consumer Affairs, 10(Summer, 1976), 19-32.

John A. Miller, David G. Topel and Robert E. Rust, "USDA Beef Grading: A Failure in Consumer Information?'', Journal of Marketing, 40(January, 1976, 25-31.

Hans B. Thorelli, 1972. A Concept of Consumer Policy. In ACR Proceedings Third Annual Conference 1972, ed. M. Venkatesan, 192-200.

Hans B. Thorelli, Helmut Becker and Jack Engledow, The Information Seekers: An International Study of Consumer Information and Advertising Image (Cambridge, Mass.: Ballinger, 1975).

Hans B. Thorelli and Sarah V. Thorelli, Consumer Information Handbook: Europe and North America (New York: Praeger, 1974).

Hans B. Thorelli and Sarah V. Thorelli, Consumer Information Systems and Consumer Policy (Cambridge, Mass.: Ballinger, 1977).

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