Product/Service Characteristics--Signals For Consumer Education/Information Program Success

ABSTRACT - The Situation Analysis portion of a strategic planning approach to consumer protection policy design should consider characteristics of consumers, the product/ service, and the environment. This paper proposes a product/service characteristic checklist to help determine the appropriateness of consumer information/education programs as remedies to consumer problems.


John A. Miller (1980) ,"Product/Service Characteristics--Signals For Consumer Education/Information Program Success", in NA - Advances in Consumer Research Volume 07, eds. Jerry C. Olson, Ann Abor, MI : Association for Consumer Research, Pages: 233-237.

Advances in Consumer Research Volume 7, 1980     Pages 233-237


John A. Miller, University of Colorado--Colorado Springs


The Situation Analysis portion of a strategic planning approach to consumer protection policy design should consider characteristics of consumers, the product/ service, and the environment. This paper proposes a product/service characteristic checklist to help determine the appropriateness of consumer information/education programs as remedies to consumer problems.


Problems consumers face in the marketplace can be solved or remedied by a number of different mechanisms. Over time if consumers are informed and can evaluate product alternatives, the free market system through its Darwinian selection process should allow efficient customer-satisfying firms and products to thrive profitably while inefficient non-satisfying firms and their products would be weeded out. Where unfairness, deception, monopolizing, danger to health or safety and the like are involved, federal regulators are authorized to step in to insure that consumers are protected and that marketplace mechanisms are allowed to work.

In both the U.S. and Canada there are a number of public policy alternatives available to prevent or remedy marketplace failures or problems. One broad set of alternatives involves "regulation"--laws and rules outlaw certain practices or products, require conformance to standards, etc. Another set involves "consumer information or education" programs, which equip consumers to avoid problems or remedy those which have occurred already.

Given alternative types of remedies, the policymaker may ask: Are there certain situations or variables which appear to be related to the need for or success of consumer information/education programs (as opposed to regulatory remedies)? That question, in fact, resulted in the formation of a "Working Party on Consumer Information Systems" by the Organization for Economic Cooperation and Development (OECD) in Spring 1979. The Working Party chairman, Dr. John Evans, and Mr. Lee McCabe began immediately to develop a framework for evaluating consumer information systems internationally (Evans and McCabe 1979 and appendices). One aspect of that evaluative framework focused on whether or not variables--among them product/service characteristics--could indicate the need for consumer information/education programs. This paper explores that possibility, investigating product/service characteristics potentially related to the need for or success of consumer education/information programs.

While reference is made throughout the paper to program "success," there is little empirical data available to properly evaluate success. Costs, benefits, degree of consumer usage and the like have been investigated for a number of programs (e.g., Lenahan et al. 1979; McCullough and Padberg 1979; Miller 1978A; Padberg 1977; Ross 1974; Thorelli and Thorelli 1974; and others), but there is in general a lack of data on which to base a sound objective appraisal of degree of success.

"The Big Picture"

Obviously, product/service characteristics form only one of several dimensions underlying the need for consumer information/education programs. How then might the policymaker make a complete assessment of the major factors indicative of a particular remedy mode or policy action? One approach would be to follow a "strategic planning" outline format (cf. Kotler 1976), giving attention to such topics as Situation Analysis, Program Objectives, Strategies for Achieving Objectives, and Control.

Situation Analysis.  The policymaker's analysis of the situation should investigate several subtopics: 1) clearly defining the Problem; 2) specifically identifying Consumers affected and their characteristics; 3) noting characteristics of the Product/Service involved; and 4) exploring relevant features of the marketplace and non-marketplace Environment.

Program Objectives.  With the problem identified, objectives and goals should be written out in specific quantitative terms (if possible) with target deadlines. Consumer information or education objectives could be structured or developed in a "quasi-hierarchical" fashion, following the "hierarchy of effects" models (cf. Day 1976, Lavidge and Steiner 1961). These objectives would be designed to prevent, avoid, or solve the problems identified in the Situation Analysis.

Strategies.  With desired outcomes and targets identified, the policymaker can select from alternative information and education strategies (or "regulatory" remedies) where appropriate. Potential education and information remedies might be categorized by media, channels, agents, or sources. Media, for example, could be grouped further into categories such as Commercial, Personal, and Independent/Semi-Independent.

Control.  A strategic planning model would include provision for measuring in a pre/post mode the impact and effectiveness of the strategies selected. The Control section would spell out cost/benefit analyses along with the impact monitoring plan. Schedules and time-dollar-people budgets are useful here.

Clearly, an analysis of product/service characteristics is merely one small part of the overall analysis and planning involved. In fact, there are significant and frequent interactions between product/service characteristics and other elements that may deserve special attention (e.g., product complexity and consumer intelligence, product cost and consumer income or wealth, product failures and marketplace remedies like warranties, etc.). Nevertheless, product/service characteristics by themselves might help suggest the appropriateness of information/education programs as remedies for consumer problems.

A Preliminary Product/Service Characteristic Checklist

Product/service characteristics which may be related to the need for or success of consumer information/education programs may be grouped into several major sets: "Importance" factors, "Purchasing" factors, and "Assess-ability" factors. The presence of one but especially of several of these factors may suggest that education/ information activities could help prevent or remedy the consumer problems identified.

"Importance" Factors

In general, the more important the product or service is to more consumers, the more there may be reason for consumer education/information program attention. Importance dimensions could include the dollar cost, the amount of the consumer's budget devoted to the product, its position on the luxury-necessity continuum, the presence of health or safety issues, the extent of distribution, and the consumer's own assessment of the importance of the product or service.

Cost; Proportion of Budget.  Product/service importance may be indicated by its cost, whether measured simply as its selling price or by the percent of the annual or lifetime budget spent on it. Thus consumer information programs for automobiles or major appliances--big ticket items--generally may have more need or success potential than those for low-priced items. Where European and American countries do have informative labeling programs, major appliances appear in most of the labeling schemes (Miller 1978A, 44-56; Thorelli and Thorelli 1974). In contrast, there may be much less incentive for the consumer to learn about lumens and life of a 404 light bulb purchased occasionally as the need arises (cf. Katz and Rose 1976). But retail price alone may not reflect the true "cost" of an item. Two other dimensions of cost should be considered: one is percent of annual budget devoted to the item; the other, closely related, is the item's lifetime, total cost. Thus, individual food or clothing items may be relatively low cost, but through the year or the consumer's lifetime a large portion of his budget is devoted to these categories. A typical urban U.S. family of four on an "intermediate" budget may spend annually approximately $3827 on food and $1102 on clothing and its upkeep--25% and 7% of their $15,318 budget respectively (1975 figures, BLS 1977). Thus, food grading and nutritional labeling programs could have significant impact on total consumer expenditures (but see Miller 1978A, 19-26). Similarly, care and content labeling activities for clothing--common in many industrialized countries (Miller 1978A, 33-34; Thorelli and Thorelli 1974)--have a good potential for success.

Although consumers have not yet been educated to consider "lifetime" product costs, for many products such as major appliances maintenance and use costs are significant, and for such products consumer education/information programs have good success potential. Typical refrigerator/ freezers, for example, not only have a large retail price, but they may cost nearly $100 a year to run (Consumer Reports 1979, 22, 28) and lifetime repair and servicing costs could also be significant (MIT Report 1974; cf. "Frequency of Repair Ratings," (Consumer Reports 1979, 386-396).

Necessity-Luxury.  In general, there appears to be greater need for consumer information/education programs for staple necessities, purchased regularly, than for luxury items. Thus, nutritional labeling, food grading, and the like could benefit virtually all consumers if the programs are designed and implemented properly along with education programs (cf. OTA 1977; but see Miller 1977A). While information and education on luxuries (such as yachts or private airplanes) may be useful to a few, especially those who may he able to "afford" information gathering expenses, need for such information/ education among a very broad segment of consumers would not exist.

Health or Safety.  In general, where health or safety factors may be involved with product/service use or consumption, there will be greater need for and success potential for consumer information/education programs. Warnings and instructions on package labels for over-the-counter (OTC) drugs and Patient Package Inserts (PPIs) accompanying prescription drugs may be essential reminders to prevent misuse, to caution of side effects, etc. (cf. Dwyer 1978). Although consumers may disregard instructions and warnings accompanying appliances, power tools, chemical products and the like, such information is clearly necessary for potentially hazardous substances or products. Federal rules or laws already suggest or require warnings on a wide variety of products ranging from cigarettes to protein supplements to cocktail glass frosters, etc. (Miller 1978;% 30-32). But in addition to warning about hazards, information and education may provide a positive framework for developing and maintaining good health. Nutritional labeling, especially if coupled with consumer education regarding nutrition, can aid consumers in food purchasing and consumption decisions (cf. Stokes and Haddock 1972). In addition to the general population there also may be substantial segments of consumers who require special information disclosures or education efforts regarding health or safety problems related to certain products (low sodium diets, alcohol and pregnancy, etc.).

Extent of Distribution.  Extent of distribution could be considered an audience characteristic, but in a macro sense it reflects product/service importance. How many people or what percent of the population or households buy and use the product/service? In general, the more widespread the use, the greater the potential benefit from education/information programs. But beyond the total population there may be also considerable use among substantial segments or vulnerable groups of special interest to policymakers--children, the poor, the elderly, minorities, etc. Thus, drug price, generic equivalents, and medical care information and information on funeral options and costs are obviously helpful to all consumers, but they are especially important to older consumers (cf. "Drug. . ." 1972; FTC 1977).

Perceived Importance.  Although in an "objective" sense the consumer's perception of the importance of a product/service or of a given characteristic may not indicate its true importance, it is useful to consider this audience-related product/service characteristic as a potential dimension of importance. If the consumer does not believe that a given characteristic is important, he is not likely to seek information on it or attempt to use such information in his purchase/consumption decisions. Consumers may shop vigorously for the best-priced refrigerator-freezer in town while remaining completely uninformed about lifetime repair and energy costs of various models (McNeill and Wilkie 1979; Miller 1978A, 15-18). When light bulbs are shelved and sold according to their prominently labeled wattage, buyers continue to be unaware of differences in lumens and bulb life (Katz and Rose 1976). Glancing at a shelf tag showing minute differences in price per ounce of a supermarket item, the shopper may miss the significance of the potential savings for the several pound package, especially over the span of repurchases in a year (cf. Miller 1978A, 35-39). But if the product or the given characteristic is considered important, shoppers may seek out information on it, whether truly relevant or not (e.g., kicking tires). Education programs could help enable consumers to evaluate the actual differential importance of characteristics or of alternative products as well as to evaluate differences between alternatives on those important dimensions.

"Purchasing" Factors.  In addition to considering the potential importance of the product/service, the policymaker should give attention to "purchasing" factors--factors such as the amount of shopping or time available for shopping for the product, and the repurchase frequency and length of the repurchase cycle. Again, shopping propensities and repurchase habits can be viewed as audience characteristics, for there clearly are differences in these variables among consumer segments (cf. Engel et al., esp. 440ff., 503ff.). But such purchasing factors also can be related to the product or service itself.

Shopping; Length of Purchase Deliberation.  For routinely purchased products and services there may be ample time and opportunity available to gather information from a variety of sources if such information is desired (even though many do not use such an opportunity--Miller 1978A, 1). But that opportunity for leisure search may not be available for certain products or services such as emergency goods and services. Need for a hospital emergency room, certain medical services, funeral services, certain types of household repairs (plumbing or electrical breakdowns) or automobile repairs (on the road) may not permit searching for alternatives or information. Although, objectively, certain other repair services may be postponable, nevertheless for many consumers a sense of urgency may preclude ordinary shopping and purchase deliberation (television repair, many car repairs, etc.). In these cases, consumer education prior to need may be very useful. Also quick access information systems--e.g. Better Business Bureau complaint file information, telephone information utilities a la' Maynes (1975)--would allow rapid "shopping." Similarly, certain information disclosures at the point of sale or on the product itself may be very useful because of the limited opportunity for shopping or information gathering.

Purchase-Repurchase Cycle.  Where products and services are purchased more than once and the repurchase cycle is relatively short, the buyer may rely on previous experience and collected information as being useful for the next purchase. But where the product/service is purchased only once or where the repurchase interval is very lengthy, previous information and experience may have been forgotten or may be inappropriate to the current purchase (due to technological change, etc.). Here again information at the point or time of sale could prove helpful. Point of sale information on required vs. optional services and on their prices has been suggested for funeral services (FTC 1977). Also, disclosures by encyclopedia salespeople have been ordered for this one-time or infrequently purchased product (Miller 1977B, 67-68). (Note, however, that this factor--repurchase cycle--may act inversely with the percent-of-budget importance factor discussed above.)

"Assessability" Factors

For the third category--"assessability" of the product/ service--the basic question is: Is special outside expertise or equipment necessary either to determine whether or not the product/service is needed at all or, if needed, to evaluate its quality of performance or suitability? It may be convenient here to adopt Phillip Nelson's (Nelson 1970) goods classification terms--Search and Experience goods--and a third term used by the FTC's 1974-1975 Office of Policy Planning and Evaluation--Credence goods. Search goods are those which the consumer can appraise by examination, perhaps by reading the package label. Experience goods can be evaluated only after experience with or use of the product, or by "sampling." Credence goods cannot be evaluated properly by the lay consumer through examination or use, so it is necessary to invoke outside expertise to evaluate them.

Note, however, that one product may possess all three types of characteristics. Thus the taxonomy might best be used for classifying characteristics of goods or services rather than the entire product or service. A television set's cabinet, picture tube size and styling are all Search characteristics. Experience alone will tell how long and how well the set operates without repair, what quality of reception one might get at home, etc. Finally Credence characteristics could be present in the form of safety hazards or excessive microwave radiation with its unseen health consequences. These three assessability categories may be useful conceptually for considering the need for or potential success of consumer education/information programs.

Search Goods or Characteristics.  Certain products, especially very simple ones (Nelson 1970, Table 2, 319), may be evaluated essentially by inspection or from readily available information. But even for these products there may be factors which prevent or thwart examination or access to information prior to purchase--factors such as prepackaging or the timing or location of information potentially material to the purchase decision. A convenience and even necessity in our self-service economy, prepackaging may prevent examination of what otherwise might be simply a Search good (e.g. bacon). Where packaging prevents inspection, package and label information, possibly including grade designation, quantity, ingredients, net or drained weight, perhaps even quality certification (cf. Miller 1978A; Thorelli and Thorelli 1974) and the like all could be useful to consumers. Unfortunately, the total inconsistency of terminology in USDA grades currently may prevent their use by consumers (Miller 1977A). Education about food package listings of ingredients in order of volume could be highly beneficial to comparison shoppers, but even many educated consumers are still unaware of the practice. Informative labeling and grade labeling programs may become even more important as prepackaging continues to increase.

Yet another set of factors which may affect the possibility of evaluating a product or service prior to purchase is the timing or location of information material to the purchase decision. If critical information is given only after the purchase decision, various psychological processes and social pressures may prevent its influencing or changing the already-made decision. Although the Annual Percentage Rate (APR) of finance charges on an installment-paid appliance or furniture item could be a significant amount, typically the consumer doesn't encounter the APR disclosure in such situations until involved in a post-decision paper shuffling and signing process (cf. Day and Brandt 1974). Similarly, when information is located where it would be accessible only after purchase or where it is unlikely to be discovered, obviously that information cannot be used in the purchase decision. Warranty information, complex assembly instructions, etc. may be inside the sealed package hidden from the purchaser. George Day notes that useful tire information is buried in a car's glove compartment, unknown or inaccessible to salesperson and consumer alike (Day 1976, 47).

It could be argued that information timing or location are characteristics of the education/information system itself rather than of the product/service. Again, they may be both. Assembly instructions, warranties, finance charges and the like clearly are part of the "extended" or "augmented" product (cf. Kotler 1976, 184).

In general, for Search goods, easily evaluated by examination or from readily available information, there is less need for consumer information systems. Consumer education programs regarding how to evaluate such products (how to use food grades, what to look for, etc.) and how to find and use product information still may be highly beneficial, especially if significant segments of consumers do not possess or use such knowledge or skills.

Experience Goods or Characteristics.  Experience goods or characteristics can be evaluated by a lay consumer through personal experience or use. Taste or personal fit characteristics belong in this category. Where products are likely to be repurchased and where trial is easy, inexpensive, and safe there may be little incentive for consumer information programs. In contrast, where repeat purchase is unlikely and experience would be costly or dangerous, consumer education and information programs are likely to help. An encyclopedia set may be bought once in a lifetime; cautions regarding potentially misleading selling practices may be in order (cf. Miller 1977B, 67-68). If the product is relatively expensive and has a fairly long useful life, consumer information such as product ratings by an independent agency (Consumer Reports 1979; GSA ratings--cf. Nader 1968, 42, and Warne 1971, 70-71) could prevent costly errors on "trial" purchases. The "experiences" of others can thus supplement or even substitute for the consumer's personal experience (e.g. "Frequency of Repair Ratings," Consumer Reports 1979, 386-396). Where "trial" may involve other costs such as health hazards (psychic surgery, self medication), consumer education and information may be highly important; in some cases, the risks may suggest regulatory intervention or even product removal.

Credence Goods or Characteristics.  For some products/ services or their characteristics neither examination nor experience will enable the consumer to make a proper evaluation. Because of lack of expertise, sensory limitations, product complexity or the like, consumers must depend on outside expertise in order to evaluate these Credence products/services or to determine whether or not they are needed at ail.

In the health care area lack of expertise and special equipment may prevent consumers from making many decisions other than whether or not to accept the diagnosis and advice of their doctor. Even with self medication using OTC drugs the consumer must rely on medical specialists for label instructions and warnings. The very availability of OTC drugs, food additives and such means the consumer is trusting FDA or USDA experts to guarantee that the products or ingredients are effective or "Generally Recognized As Safe"--GRAS (Lehmann 1979). Because external package or prescription information or verbal instructions may be lost or forgotten, Patient Package Inserts (PPIs) have been found to be helpful information supplements for prescription drug users (Dwyer 1978). Unit pricing permits price-per-unit comparisons without a calculator or metric-avoirdupois conversion table, but consumer information processing (CIP) limitations and principles still may limit the effectiveness of current unit price displays (Russo 1977).

Able to inspect fresh produce and to determine by experience whether or not they like specific brands of packaged foods, consumers nevertheless must depend on nutritionists or chemists to provide nutrition information for food package labels (cf. Miller 1978A, 19-26). A safety certification program such as that of Underwriters Laboratories can provide assurance of at least minimal product safety performance for various types of apparatus and appliances (Miller 1975A, 56; Thorelli and Thorelli 1974, 454f.). These safety characteristics probably are not visible to the consumer on examination, and "experiencing" the lack of such safety characteristics could be fatal!

For certain products or services consumer sensory limitations may prevent Search or Experience evaluations (cf. Miller and Olshavsky 1979). Microwave radiation, for example, is outside our visual and auditory sensory limits. Thus, consumers must rely on label warnings about use hazards for potentially dangerous products and substances such as electrical appliances, power tools, toxic household chemicals, drugs, food ingredients and additives, cigarettes, alcoholic beverages, etc. (Miller 1978A, 30-32, and Miller 1978B, 111-112).

Product complexity may prevent search or experience evaluations due to consumer information processing (CIP) limitations (cf. Miller 1978A, 5-11). Summary performance ratings, grades, and quality certifications may permit the consumer to decide among products characterized by multidimensional difficult-to-evaluate features (cf. Miller 1978A, 73; Thorelli and Thorelli 1974, 4). Consideration of consumer characteristics (see "The Big Picture" above) would direct attention specifically to these CIP limits and principles. In general, for Credence goods which consumers cannot evaluate by search or through experience, education and particularly information strategies may be especially beneficial.

Other Factors

In addition to those "Importance," "Purchasing," and "Assessability" factors just discussed, there may be other product/service-related characteristics associated with the need for or success of consumer education/ information programs. The preceding checklist might serve as an example outline upon which to build a comprehensive evaluative framework.


A systematic strategic planning approach such as is sketched above in "The Big Picture" is likely to minimize the possibility of inappropriate consumer education/information program applications or of their absence when they are called for. Disregarding consumer, product/service, or marketplace/environment factors, on the other hand, will increase the odds of failure of well-intentioned but misguided programs. Accordingly, one might predict that consumer information/education programs will not succeed if:

1.  the education or information is not perceived as materially relevant to the purchase (e.g., consumer doesn't consider lifetime appliance EER and repair costs).

2.  the information is unavailable or inaccessible at decision time (provided too late like APR; inside sealed package; forgotten, etc.).

3.  the consumer is not exposed to the information at all (e.g., product is processed, label information on restaurant or bar products, label information for accessory parts installed by another, etc.).

4.  the consumer does not choose or specify the product or service (a. ingredient, assembly, or element of larger purchase like food additive, car part, etc.; b. product/service is specified by "expert" such as mechanic, doctor, etc. Note that education may help in these cases.).

5.  the information or education is or appears to be too complex or of too little value to warrant the time, effort or money costs to obtain.

6.  the information/education is inconsistent with the current value system, behavior system, beliefs, etc. of the consumer (low income person's distrust of any government warning or information, etc.).

7.  the information can be thwarted easily by the marketer (e.g., cooling off laws, "explanation" of the APR by a salesperson, etc.).

8.  etc.


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John A. Miller, University of Colorado--Colorado Springs


NA - Advances in Consumer Research Volume 07 | 1980

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