George R. Milne, Shalini Bahl, and Andrew Rohm
Executive Summary
At the broadest level, the marketing process involves learning about consumer preferences by gathering information and then configuring a marketing mix, which includes marketing communications and promotions, to meet consumers’ needs. In an effort to make the marketing process seamless and more efficient, marketers are surreptitiously and inextricably coupling information gathering and marketing communications. Despite the widespread use of new methods and technologies to market to consumers covertly, there is little research on the subject to date. The first purpose of this essay is to provide a broader conceptualization of covert marketing practices that reflects the technological changes enabling covert collection and dissemination of information. The second objective is to present an exchange framework that identifies factors affecting marketer and consumer welfare when covert practices are used. The third objective is to initiate a discussion regarding the benefits and harms related to these types of covert marketing practices as well as consumer reactions to such practices.
The authors define covert marketing practices as the intentional omission and distortion of facts by marketers pertaining to the collection and or dissemination of information by marketers. Thus, covert marketing practices include both information gathering and marketing communications that are purposely undisclosed, disguised, or hidden from consumers. Acceptable practices for collection and dissemination of information are defined by public policy and industry norms. However, as norms shift in conjunction with emerging technologies, drawing a clear distinction between proper and improper practices becomes more difficult.
This article provides a theoretical framework to inform marketers and public policy about the impact of covert marketing practices on consumers. The framework includes factors that affect marketers’ decisions to engage in covert practices and consumers’ responses to such practices. In addition, the essay examines the harms, benefits, and consumer reactions related to covert practices and how they differ between preexchange and postexchange stages.
The challenge in assessing covert marketing practice is determining where to draw the line between unacceptable practice and efficient and effective marketing tactics. This is difficult given the rapid evolution of technologies that are being used for information collection and marketing communications. This essay lays out a framework that describes the contextual factors that affect marketers’ decisions to engage in covert marketing and consumers’ decisions to enter into exchanges with marketers. The outcomes of such exchanges will affect future marketer and consumer actions. The propositions presented in this essay suggest directions for subsequent empirical work.
In addition, the proposed harms and benefits to consumers at different stages in the exchange process can assist the examination of new disclosure paradigms for marketing communications and information collection practices that would enable companies to balance the effectiveness of their communications and data collection tactics with the maintenance of consumer trust and protection.
Biography
George R. Milne is Associate Professor of Marketing in the Isenberg School of Management at the University of Massachusetts, Amherst. He received his PhD from the University of North Carolina at Chapel Hill. His current research interests are Internet privacy, database marketing, consumer self-concept, the consumption of nature and technology, and innovation.
Shalini Bahl is Assistant Professor of Marketing in the Marketing Department, David Eccles School of Business, University of Utah. She received her PhD from the Isenberg School of Management at the University of Massachusetts, Amherst. Her research focuses on issues related to consumers’ self-concepts and well-being. She is interested in developing new theories and methods to understand the role of consumers’ self-concepts in the marketplace. In addition, she has presented and published research on privacy-related issues. Her future research interests include the study of mindful consumption and mindful marketing practices that maximize consumer and marketer welfare.
Andrew Rohm is Associate Professor of Marketing and Denise and Robert DiCenso Term Professor in the College of Business Administration at Northeastern University. He received his PhD from the Isenberg School of Management at the University of Massachusetts, Amherst. His research interests are in the areas of new media and innovations in marketing communications and branding. He has published his research in leading academic and managerial journals, including MIT Sloan Management Review, Journal of Business Research, Journal of Interactive Marketing, International Journal of Mobile Marketing, Journal of Consumer Affairs, Journal of Public Policy & Marketing, and Sports Marketing Quarterly. He has presented at numerous international conferences and is on the editorial review board of Journal of Marketing Theory and Practice.
Journal of Public Policy & Marketing, Vol. 27, No. 1, Spring 2008
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