Caveat Emptor “let the buyer beware”
December 13, 2009 Leave a comment
Inks, Avila and Chapman (2004) found that buyers are more ethically sensitive to unethical behavior. Buyers have stronger negative reaction to lying when this lying was from the seller; however, the buyers were less sensitive to their deceit (lying) because they justify it with the resulting low price. Old English law supported the “caveat emptor” principle where the buyer is accountable for researching the product and take responsibility for the product risk (Ellison, 2008). This principle is not practical in the resent year since the buyer cannot test the car safety or performance without driving it for extended period, the same test would be required before flying in an airplane (Ellison, 2008). A good example of such unknown risk is the use of Radio-frequency identification RFID in many products. RFID is an embedded device that transmit the location of the device (or whatever it is attached to) to a receiver or a reader (Willey, 2007). The receiver would know where the tag has been and this information can be analyzed and used for marketing and product customization purposes. The customers might benefit from receiving an advertisement related to their buying habits but in exchange for their privacy.
The principle “let the buyer beware” is opposite to the relationship marketing principle where the seller seeks long lasting relationship with the customer. The relationship is maintained by stating the facts and giving the necessary information to the customer. Relationship marketing takes part of the risk to prevent any risk that the buyer may encounter from the selling and buying experience. “The relationship marketing strategies are concerned with the development and enhancement of relationships with a number of key markets.” (Šimberová, 2007, p. 207). Marketers should not subscribe to the caveat emptor principal since it makes the relations ship between the seller and the buyer deteriorate.
Ellison, R. (2008). Time to revisit caveat emptor? What has regulation ever done for us? Pensions: an International Journal, 13(3), 123-129.
Inks, S., Avila, R., & Chapman, J. (2004). A comparison of buyers’ and sellers’ perceptions of ethical behaviors within the byer-seller dyad. Marketing Management Journal, 14(1), 117-128.
Šimberová, I. (2007). Internal marketing as a part of marketing culture supporting value for external customer. Economics & Management, 12, 470-280.
Willey, L. (2007). RFID and consumer privacy: let the buyer beware! Journal of Legal, Ethical & Regulatory Issues, 10(2), 25-37.