American Periscope. Fear marketing

Marketers are adept at using various tools and techniques to create a desire in you and then try to convert that into a demand for their product. Psychologists have strengthened their hands by digging into the human brain and finding the emotions that can be manipulated. Mostly it is all good, and relatively harmless. We want to look good, feel good, be recognised by peers, be healthy, and so on. And when marketers create these scenarios where such feelings would be satisfied, we succumb to the purchase.

Most do it by promising heaven. But some don’t mind getting to it by threatening hell! Others would randomly call people with a similar threat. Having received such calls, I can attest to their crudeness of language!

But these are scams. What about legitimate offers, walking the fine line? I received a ‘Vehicle Alert’ notice, that it was the ‘Final’ notice warning me that my car’s warranty had expired (true), and I should call the provided number urgently (printed in red) to go over coverage options. But wait, my car’s warranty expired 10 years ago and its book value now is less than the cost of a new bicycle. They must have bought an expired mailing list! You don’t have to sound dire while using fear. Legal businesses do it politely by creating dissonance rather than striking fear like car rental agencies do. Most credit card companies provide insurance coverage on car rentals when their card is used. Knowing this, you may refuse insurance coverage when you rent the car. The sales agent will then suggest, ‘With our coverage, you can return the car in any condition, no questions asked.’ You insist and refuse. Then they would push the knife in further by asking you to sign at the spot marked ‘x’ below acknowledging that you were offered coverage and refused. Doubts spring to your mind. What if this particular card did not include the coverage? You had forgotten to check. After all, this is only another $10 (about ₹700) per day!

Then, I get this letter from a very legitimate, stock-exchange listed company which is my current service provider for my heating furnace. They tell me that the current furnace coverage I have does not cover the gas line from the street to my home and repairing it is expensive. True. Of course, for only $2.50 (about ₹175) a month, they will cover it fully. Sounds fair, especially if you don’t know the probability of the gas line failing. But in the opening sentence they begin with a warning that they have already notified me that my gas line is not covered, and as of date, I have chosen not to protect myself, and this is my last chance! There is a special offer box that I can check to avail myself of the discounted price.

What next? The insurance company will warn me that I have chosen not to protect myself from the debris that may fall from the International Space Station, and for a nominal amount, ….

When economists tell us that markets are efficient, I wonder if they include these examples too. These practices are thought up by well-educated individuals who skipped their ethics classes while at college. And they were approved by boards of directors who were busy drafting ethics guidelines for their companies and did not have the time to review proposals that came before them.

The writer is a professor at Suffolk University, Boston

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