Pillar #1: Consumer Health

The first pillar discussed in class was that of consumer health.  This referes to the health and safety of products and services that a company may be offering.  This section started off by listing five of the key drivers that might lead businesses to pay attention to consumer health.  They are:

• Public Sector Regulation -  Some companies may feel pressure from agencies that monitor the health and safety risks of products.  A few examples of these agencies are - Consumer Products Safety Commission, National Highway Safety Administration, Food and Drug Administration and Federal Aviation Administration.
• Consumer Advocacy - Some consumers, specifically those savvy with social media, may make enough noise online to cause companies to take notice.  These advocates are often trying to establish and enforce product safety standards, as well as educate other consumers on product risks.
• Trust - It is relatively well known that a brand's trust influences it's equity.  If a particular brand does not hold much consumer trust, a company may want to re-evaluate. 
• Avoiding of Unnecessary Costs - These costs might come in the form of a product recall, if a product is found to be unsafe after it hits the shelves.  It could also refer to the risk associated with lost revenue from unsellable product.  One example of this is laundry detergent pods - these items can be seen as having a resemblance to candy and are therefore dangerous to both children and elderly individuals with dementia.
• Improving Reputation for Social Responsibility - As many as 50% of consumers are 'belief-driven' buyers, meaning that they will purchase, switch, avoid and even boycott a brand based on a company's position on a controversial social isssue.

These are just a few reasons why companies MIGHT pay attention to the health of their consumers.  But there are also some reasons why companies don't prioritize it.  One very important reason is the confusion surrounding regulation and enforcement.  When there are misaligned or poorly written laws surrounding a subject, businesses are often less incentivized to make the changes needed.  There may even be disagreement over whether something should be mandated through government regulation or not.  An example of this can be seen in the development of driverless cars - do they need to have steering wheels?  There is much heated disagreement on this topic because it could affect the safety of the drivers, but it also will increase costs for the manufacturers that may actually be unnecessary.  Additionally, in certain industries, consumers may actually be fighting against their own health.  For instance, in the food industry, the government and some consumer groups are calling for healthier options, yet those same consumers may reject recipe changes to their beloved brands.

It is clear that keeping consumer health in mind is not always the easier choice, but I would argue that it is the right choice.  Especially when such a high percentage of consumers are 'belief-driven' in their purchasing behaviors.  The instructors of my course used a case study on CVS pharmacy for this particular pillar.  October 1st, 2014 was the first day that CVS pharmacy would no longer be selling cigarettes.  I remember the controversy that surrounded this issue.  Some argued that those consumers who smoked would stop shopping at CVS indefinitely and that the company's decision would hurt them in the long run.  Others supported the decision, as we know the detrimental effects that cigarettes have on a person's health outcome.  A spokesperson for CVS said that making this change gave the company legitimacy as a healthcare company, which is what they claimed to be in their mission statement.  Because how could a healthcare company go around selling items that were so harmful?  The company thought this might help their customers even quit smoking because the cigarettes wouldn't be right in front of them when they were checking out.  After the fact, CVS said that it lost about $1 billion in cigarette sales, but gained $2 million in smoking cessation product sales.  This decision to get rid of cigarettes clearly wasn't strictly monetary in nature, as it can be seen that CVS suffered an initial loss.  After two or three years, the stock price and bottom line of the company continued to grow, but there really isn't a good way for the company to identify the ROI on their choice.  As it stands, however, they are still the only pharmacy that has taken the leap to stop selling cigarettes.  Their employees and leadership still feel that it was the right decision to make and they will continue to stand by it.

-Vicky