Information disclosure can play a vital role in consumer protection, whether self-initiated by firms or mandated by government regulators. For example, the US government has mandated warnings on cigarette packages since the late 1960’s; and many companies, such as toy manufacturers and chemical producers, include safety warnings on packages and products to reduce the risk of consumer harm and potential liability. Designing effective warning communications can be challenging. Changing consumers’ habits is notoriously difficult, and information can sometimes be difficult for consumers to understand or have unintended consequences. This AMA journal curation features several articles from the Journal of Public Policy & Marketing and the Journal of Marketing Research investigating the impact of various types of warnings on consumer attitudes, beliefs, emotions, and behavior intentions.
Mostafa Purmehdi and his colleagues examine the effectiveness of warning labels in a meta-analysis of 66 research studies investigating tobacco, chemicals, alcohol, toys, food, and other product categories (Purmehdi et al. 2016). Warning labels aimed at safe-use (e.g., toys and chemicals) had stronger effects on behavior than labels intended to promote moderation or cessation (e.g., alcohol and tobacco). Warning labels were more effective when accompanied by other promotional tactics such as advertising or other promotional materials, and the social context of product use played an important role as well. Characteristics of the label, such as location and size, were important factors, while images were effective primarily when they were intended to evoke fear.
The impact of warning labels on fear and other emotions is the focus of a recent article by Richard Netemeyer and his colleagues (Netemeyer et al. 2016). They examined the impact of graphic visual health warnings found on cigarette packages in many countries around the world, though not yet in the United States. Increasing the graphic intensity of on-package health warnings evoked greater fear, guilt, and disgust amongst teenage adolescents, especially those who have smoked, and these feelings increased reluctance toward smoking as well as beliefs about the harms of secondhand smoke. This builds on the authors’ earlier research that found a link between graphic visual health warnings and young adult smokers’ evoked fear, negative health beliefs about smoking, and thoughts of quitting (Andrews et al. 2014).
Consumers’ right to be protected from potential harm and informed about risks associated with product use is often at odds with companies’ goals to promote and sell their products. For example, electronic cigarettes (“e-cigarettes”) are a relatively young but rapidly growing industry, and the Food and Drug Administration has only recently begun overseeing the industry. Research by Christopher Berry and his colleagues (Berry, Burton, and Howlett 2015) found that e-cigarette addiction warnings and health claims in advertising have competing influences on consumers’ risk perceptions and purchase intentions: a warning increased addiction risk beliefs, while a health claim (e.g., “a healthier smoking alternative”) decreased addiction and health risk beliefs. They had similarly opposing influences on future tobacco use intentions; warnings decreased future intentions, but not when a health claim was also in the ad. This evidence suggests that addiction warnings are unlikely to be effective in advertising if accompanied by health claims.
The financial services industry is one in which information disclosure often plays an important role in consumer protection, though typically not in the form of an explicit product warning. However, the Credit CARD Act of 2009 mandated that all credit card lenders include a “minimum payment warning” on monthly billing statements sent to cardholders, spelling out the high interest cost and long time to pay off your credit card balance if you pay only the minimum required amount each month. The warning also includes information about the amount of monthly payment that would enable the cardholder to pay off the balance in three years. Jack Soll and his colleagues (Soll, Keeney, and Larrick 2013) found that many credit cardholders have difficulty estimating how long it will take to pay off their credit card debt, and the minimum payment warnings help improve accuracy (though not entirely). Later research found that the warning’s three year payment information was far more influential on repayment behavior than was the minimum payment information itself (Salisbury 2014). Cardholder’s payment choices tended to shift toward the three year payoff amount, which is beneficial for consumers influenced to pay more but potentially detrimental to consumers influenced to pay less than they might have if the warning were not present on the billing statement. This is an example of an unintended effect of information disclosure, a phenomenon that has been well documented in other prior research (Stewart and Martin 1994).
These articles highlight the diverse forms that product warnings can take, such as on-package, in advertising, or even in billing statements. Thus warnings are often an integral element in many marketing communication designs. Optimizing design requires comprehensive understanding of warning message impact on customer beliefs, emotions, attitudes, and behaviors. The articles also underscore the tension between protecting consumers from potential harm while also enabling firms to most effectively promote their brands. Striking that balance between consumer needs and firm performance is an ongoing challenge for managers.
Questions for Academics/Instructors in the Classroom
1. How do warning messages influence customer beliefs, attitudes, and behaviors? How might those influences change when the message is presented on the product package versus within an advertisement?
2. How can a brand simultaneously maximize profits while also fully protecting its customers from harm? Which product or service categories would this be easier or more difficult to achieve? Are there brands for whom it would be essential to building brand loyalty?
3. Visit the US Food & Drug Administration’s electronic cigarette webpage. Consider the information on the FDA’s site, as well as Barry, Burton, and Howlett’s (2016) e-cigarette research article. What marketing strategy and tactic changes would you recommend for an e-cigarette brand now that the FDA oversees the industry?
Andrews, J. Craig, Richard G. Netemeyer, Jeremy Kees, and Scot Burton (2014), "How Graphic Visual Health Warnings Affect Young Smokers' Thoughts of Quitting," Journal of Marketing Research, 51(2), 165-183.
Berry, Christopher, Scot Burton, and Elizabeth Howlett (2016), "The Impact of E-Cigarette Addiction Warnings and Health-Related Claims on Consumers' Risk Beliefs and Use Intentions." Journal of Public Policy & Marketing, forthcoming.
Netemeyer, Richard G., Scot Burton, J. Craig Andrews, and Jeremy Kees, (2016), "Graphic Health Warnings on Cigarette Packages: The Role of Emotions in Affecting Adolescent Smoking Consideration and Secondhand Smoke Beliefs," Journal of Public Policy & Marketing, 35(1) 124-143.
Purmehdi, Mostafa, Renaud Legoux, François Carrillat, and Sylvain Senecal (2016), "The Effectiveness of Warning Labels for Consumers: A Meta-Analytic Investigation into Their Underlying Process and Contingencies," Journal of Public Policy & Marketing, forthcoming.
Salisbury, Linda Court (2014), “Minimum Payment Warnings and Information Disclosure Effects on Consumer Debt Repayment Decisions,” Journal of Public Policy & Marketing, 33 (1), 49-64.
Soll, Jack B., Ralph L. Keeney, and Richard P. Larrick (2013), "Consumer Misunderstanding of Credit Card Use, Payments, and Debt: Causes and Solutions," Journal of Public Policy & Marketing, 32(1), 66-81.
Stewart, David W., and Ingrid M. Martin (1994), “Intended and Unintended Consequences of Warning Messages: A Review and Synthesis of Empirical Research,” Journal of Public Policy & Marketing, 13(1), 1-19.