One of the effects of the spatial location theory that we briefly discussed in class is the consequence of under-representation. Citizens on the outskirts of Charlottesville have to drive 20 minutes for fried chicken. People on the end of the beach have to walk a mile to get a hot dog. In the eyes of preference-outliers, it may appear that firms are discriminating against them, when, in reality, firms are incentivized to maximize profits by appealing to the median consumer.
With a greater emphasis on diversity and inclusion in recent years across American businesses, one might question whether the spatial location theory still holds up. Why do companies now appeal to the minority groups on the ends of their consumer base spectrum? Did they become benevolent?
In the case of LGBT inclusion, it’s clear that firms are trying to maximize profits and appeal to the median consumer rather than having some altruistic motivation. When looking at which companies changed their logos for pride month last year, there is an industry and geographical bias. Mercedes-Benz changed their logo in North American and European countries where tolerance is higher, while maintaining their standard logo in Middle Eastern and Asian countries. Big Pharma expressed unanimous support, and coincidentally happen to profit greatly from the lifelong drugs they sell for transgender treatment and gender dysphoria. Whether the median consumer identifies as LGBT or has pro-LGBT views and gets utility buying from a like-minded brand, spatial location theory remains an accurate explanation for the “inclusive” activities of firms today.
No comments:
Post a Comment