Deakin Speaking

This article was co-written with Kathryn Chalmers

Consumer vulnerability is often described in terms of consumer characteristics or demographics such as age, disability, gender, race/ethnicity, low or limited literacy, and level of education. In general, these measures are useful indicators of potential vulnerability, and most government departments, large institutions and commercial businesses use these to operationalise their vulnerability and disability programs and policies.

We are surprisingly poor judges how a particular event will make us feel into the future. In other words, we rely on how we feel right now to predict how we might feel about something later. Psychologists call it affective forecasting.

During the past forty years global rates of overweight and obesity have risen dramatically. In 2010 more than 155 million children worldwide were overweight (more than one in ten) and of these approximately 30-45 million were obese, or between two and three per cent of the world’s 5-17 year-old children.

In Australia, more than 14 million people fall within the overweight or obese range, and Australia is ranked as one of the fattest nations in the developed world. The prevalence of obesity in Australia has more than doubled in the past 20 years, and children are at particular risk of overweight and obesity.

But the answer is probably not a ban on all marketing to children. In the first instance, simply the practicalities of a blanket ban would be incredibly difficult, particularly in trying to keep up with the constantly changing promotional environment.

If the goal of product disclosure statement (PDS) is to help consumers make the most appropriate choices, we have to start with the consumer, rather than the document.

So, when we think about consumers, decision-making, and even consumer protection, we need to understand how people decide, and the processes they use to understand information.

As advertising opportunities for businesses become more fragmented, enhanced and accelerated by the Internet, businesses are looking for more creative ways to get their brands into the minds of their target markets.

With this in mind, on Wednesday, Spotify – the Swedish music streaming service that gives subscribers who pay with cash, or by listening to ads, access to a huge amount of music from major and independent record labels – unveiled a global partnership with Coca-Cola. The soft drink behemoth will curate content and music for Spotify members, and according to Coke, “takes advantage of the existing Spotify relationship with Facebook and the Coca-Cola Facebook audience of over 40 million fans to create a social experience that will reach millions of interconnected consumers around the world.”

When you walk into Hungry Jacks, or McDonalds, or Kentucky Fried Chicken, and order your Whopper Value Meal, Big Mac Value Meal, or Ultimate Burger Meal, what does 1430kj, 2590kj and 3800kj (approx.) mean to you? Probably not very much.

But, instead of esoteric energy counts, what if you were confronted with something more comprehensible, like 75 minutes of sprinting (Medium Whopper Value Meal), or a 2 hour game of squash (Large Big Mac Value Meal), or, perhaps 5 hours of fast swimming (Ultimate Burger Meal)? Would you think again about buying all that food?

I think you would.

 The furore following the announcement that Jenny Craig CEO Amy Smith would address a gathering of hundreds of girls' school teachers has once again brought the uncomfortable issue of corporate presence in schools to light. 

The public response – that school groups should not be seen to endorse the dieting industry – is certainly warranted. But such corporate presence in education is really just the tip of the iceberg.

Clearly, some PR company (or companies) is making good money out of convincing large corporations and businesses that the way to get to consumers, in this fragmented media world, is to do long-form advertisements. Rather than short, pithy 30 second spots, there seems to be a bit of a movement toward longer, snappy and emotionally rich adver-films that tell the story about "Our People". Some swelly music, beautiful sweeping pan shots, nice depth of field, and happy smiling faces... you get the picture. The Australian mining industry, the Mormons, and now Qantas have all put together a series of films about how their people, are people, just like you and me.

In a 2008 paper on neuroeconomics, Carnegie Mellon University economist George Loewenstein said: “Whereas psychologists tend to view humans as fallible and sometime even self-destructive, economists tend to view people as efficient maximisers of self-interest who make mistakes only when imperfectly informed about the consequences of their actions.” 

Competition… at any cost?

So, Heinz has made a bit of a fuss about the growth of private-label or in-house brands in our major supermarkets. According to Fairfax publications, “William Johnson, executive chairman, CEO and president of the $US16.4 billion Pittsburgh-based Heinz, told investors the company has had to rework its strategy in Australia to cope with the growing domination of private label goods and the never-ending discounting on branded goods by the supermarket chains,” with Mr Johnson labelling Australia as the “worst market” to do business. Obviously, Johnson and other national brands should be doing everything they can to try and deal with this growth in supermarket private-label brands. It is in their interests to have as much of their product on the supermarket shelves as possible.