The Situationist

Archive for September 16th, 2010

Breaking Up Is Easy to Do: When Corporations Dump Consumers

Posted by Adam Benforado on September 16, 2010

As Jon Hanson and a number of other Situationist contributors (including yours truly) have profiled over the years, corporations go to great lengths to convince us that we are rational market actors, exercising free choice.  By using advertizing, marketing, and other means to encourage consumers to believe that they are in control, corporate entities can effectively evade liability and regulation.  When someone becomes obese from eating too much fast food or develops cancer from smoking too many cigarettes, the “choice myth” acts as a great shield.  How can the corporation be deemed blameworthy when individuals exercised free choice to buy the problematic products in copious quantities?

The great injustice, of course, is that at the same time that corporations are selling the narrative that the American public is in the driver’s seat, navigating an open market, they are actively working to ensure that that is not the case.

Take a recent article by Detlef Schoder and Alex Talalayevsky in the Wall Street Journal’s Executive Adviser on how companies can regain control of pricing power on the Internet.  What is fascinating about the piece is that Schoder and Talalayevsky portray consumers seeking to become well informed and exercising free choice as “taking advantage”—that is, not playing fair.  And the authors offer specific tactics to limit choice and confuse or reduce the knowledge of potential buyers.

For example, Schoder and Talalayevsky provide advice on decreasing “price transparency.”  As they explain, “Packaging, or bundling, a product with other products and/or services, makes it difficult for buyers to ascertain the specific cost of each single item within the bundle.”  Likewise, they recommend tracking online customers by delivery address and credit-card number and then banning “customers who repeatedly eat into [the] profit margin.”

Do companies actually do these things?

You bet.  Indeed, I have a friend who was banned from after she was deemed to be too savvy and not profitable enough.  Bluefly broke the news in a letter canceling her most recent order: “While we understand that you may be upset by this situation, please understand that, by choosing not to accept your order, we are not saying that you have done anything wrong.  We are simply recognizing that based on our mutual past transaction history, we are not a good match to continue to do business together.”

When my friend forwarded me the “it’s not you, it’s me” email, my first instinct was to laugh, but as I thought more about it, it all seemed pretty underhanded.  There is something seemingly unjust about corporations celebrating the autonomous, rational consumer, while actively working to undermine autonomy and rationality, and to cull the most autonomous and rational individuals from the herd.

What do you think?

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For a sample of related Situationist posts, see “Taking the Situation of Consumers Seriously,” Hey Dove! Talk to YOUR parent!,” The Changing Face of Marketing?,” “The Situation of Credit Card Regulation,” The Financial Squeeze: Bad Choices or Bad Situations?” “The Situation of the American Middle Class,” “Are Debtors Rational Actors or Situational Characters?,” and “The Situation of College Debt” – Part I, Part II, Part III, and Part IV.

Posted in Choice Myth, Marketing, Situationist Contributors, Uncategorized | Tagged: | 10 Comments »

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