Forensic marketing and consumer behaviour: admissibility of evidence

AbstractPurpose- The purpose of this paper is to explore the underlying aspects of Forensic Marketing and develop models that can be used in the forensic marketing analysis process. Thus providing support for the admissibility of marketing evidence in a court of law.Design/methodology/approach- A two stage approach used in this paper. The first stage involves a literature review identifying theories and the various constructs and variables leading to the formulation of two models firstly, for conducting forensic marketing analysis and secondly, to clarify the relationship of marketing issues to profitability of a product. The second stage involves examining court rulings in regards to the admissibility of marketing evidence.Contribution / implications-The contribution of this paper is towards the clarification and justification of the underlying constructs and variables in the forensic marketing analysis as evidence in determining economic loss.Key words: Forensic marketing; consumer behaviour; brand recognition; economic loss.JEL Classification: M31; K41PsycINFO Classification: 3920; 3940FoR Code: 1505ERA Journal ID#: 123340IntroductionLitigation between firms where it is necessary to measure economic loss or damages has given rise to the fields of forensic analysis in the disciplines of economics, concerned with providing evidence of an economic nature, and forensic accounting, concerned with providing evidence of an accounting nature. Indeed, forensic accounting has taken on a mantel of professionalism with a number of professional bodies existing in the USA, the institute of Certified Forensic Accountants, and the Association of Certified Fraud Examiners. In Australia the Chartered Accountants of Australia and New Zealand have a special designation of forensic accountant for CA's that may undertake investigative services or litigation services that may lead to providing courtroom testimony. The legal system has accepted economists and accountants as experts in evaluating and reporting on methods of measuring the financial value of damages or economic loss for the consideration by the courts as evidence. However, there are cases where the financial or economic loss is more closely aligned with copyright or brand infringement and in such circumstances a greater knowledge and expertise in concepts of marketing and particularly consumer behaviour is required. To address these situations forensic marketing is emerging as a complimentary field that provides the objective empirical observation to support the measurement of loss.Forensic marketing has been instrumental in providing the required expert evidence in conjunction with accounting evidence to establish and quantify economic loss in a number of legal cases in Australia. Loss of market share leading to loss of profit was considered in Seeley International Pty Ltd v Newtronics Pty Ltd [2001] FCA 1862, with economic loss from a negative impact on a brand name being the focus in Versace v Monte [2002] FCA 190 and Versace v Monte [2003] FCA 126. In Cat Media Pty Ltd v Opti-Healthcare Pty Ltd [2003] FCA 133 the focus was also on the importance of brand recognition and advertising in market share and subsequent economic loss.An approach to conducting forensic marketing was proposed by Anderson, Volker and Phillips (2008). They focused only on a methodology for gathering data and then undertaking analysis that could be ascribed as providing evidence. They recommended the use of a case study approach, without providing any discussion of the consumer behaviour that underpins the very nature of the forensic marketing analysis. Consumer behaviour is by its very nature closely aligned with the field of cognitive psychology in that it explores the basis for decision making by individuals. The method proposed by Anderson, Volker and Phillips (2008) did not address the underlying construct of consumer behaviour and the importance of this in validating the forensic marketing evidence. …