Are There Limitations to Consumer Sovereignty?
You may be wondering if consumer sovereignty is the actual way that firms decide what products and services to produce. Well, maybe, but some believe that there are limitations to the practice of consumer sovereignty that come in the form of deceit. Let's look at some now.
Firms hire marketing experts to sell the products they want to sell using deceitful marketing practices. This may mean that if a marketing firm is good at what they do, they may persuade consumers to purchase products they really don't want or need, and therefore, it would inhibit the theory of consumer sovereignty that consumers dictate their own needs and wants.
Sometimes consumers are tricked to purchase products and services that they do not want because of lack of information. If a consumer does not have all of the needed information about a product, they may mistakenly purchase that product. While a demand for a product may convince firms to produce that product, if that demand comes at the expense of the consumer because they do not have enough information about the product, the success will be short-lived.
Examples of Consumer Sovereignty
Let's take a look at two different examples to see consumer sovereignty in action: one where consumer sovereignty is successful, and one where it shows limitations.
Imagine two shoe companies. They make very similar products, only one sells black shoes, and one sells green shoes. The company that makes the black shoes sells hundreds of pairs and ends up making a lot of money doing so. When other shoe companies see how successful they are, they also begin to sell black shoes and make a lot of money. On the other hand, the company that makes green shoes only sells a couple of pairs of shoes and actually experiences significant losses, eventually going out of business. This example shows that consumers like black shoes and want firms to produce more of them. It also shows that consumers do not like green shoes and do not want them to be produced.
Suppose the local general store sells a product known as Wanda's Wonderful Weight Loss Candy. The candy is supposed to help people lose a pound a day if they eat a pack every morning for breakfast. The general store produces countless marketing supplies to promote the success of Wanda's Wonderful Weight Loss Candy. Thousands of consumers learn about the weight loss candy and are convinced by the advertisements to purchase the product. Unfortunately, the candy does not make you lose a pound a day. In fact, it does nothing more than maybe to fulfill your sweet tooth. At first, lots of consumers believe it works, and for awhile, this leads to increased sales. But once the truth about the product comes out, it will begin to fail. In the end, Wanda's Wonderful Weight Loss Candy does not fulfill the wants and needs of the consumer.
Lesson Summary
Consumer sovereignty is the thought that products are offered based on the demands of the consumer. What a consumer wants and needs, ultimately convinces firms to produce those products. While firms certainly want to produce the products that sell, sometimes products sell because firms use marketing to trick the consumer, ultimately explaining how consumer sovereignty has limitations.
