What role does the power imbalance play in the dynamic between Companies and Consumers?

Businesses relationship with customers are dynamic, as they need customer to achieve sales and they detest customers when customers complaints. This dynamism in customer and businesses relations also manifests in power imbalance between business and customer. Power imbalance between business and its customer is a situation where customers find business wielding its power to cause sale of defective products to customers by giving wrong information on their products. While, for business organizations power imbalance means customers unpredictable behavior, which can result in lot of negative reviews and feedbacks that impacts its sales revenues.

Customers are always asked to take informed decision in their purchases based on their needs, values and priorities. But this is not the case, business organizations have an upper hand over customers in power imbalance and they wield the same on the customer through confusing and misguiding advertisement to entice customers to purchase inferior product and services. All the while gullible customer trusts the business and its brand to act ethically and ensure they are supplied with quality product and services.

Analyzing the role power imbalance plays in the dynamic relations between business organization and customer, we can find following insights which shows business organizations wield considerable power imbalance over customers to affect purchase decisions -

1. Business organizations employ their power to sell defective product to customers by using their own knowledge of defect in product to create clever advertising campaign that hides such defect and entices customer to purchase such defective product.

2. Business organizations uses different pricing strategy to subdue their competing products based on the position they enjoy in their industry, causing customers to purchase their products at higher prices.

3. Businesses use clever sales schemes that push products as an attractive option to the customers by bundling it with other products of their own. All the while, the cleverly planned sales schemes are defrauding gullible customers who purchase such bundled products without understanding cost of such bundling to them.

4. Businesses use strong PR and digital media campaign to worn out customer complaints and negative reviews. It has been observed in e-commerce industry, where the seller is himself putting false reviews of their product to increase their sales volumes. Even the e-commerce platform promotes their own products by subjectively limiting information on competing products of brands.

As such, the above scenarios clearly put to fore the power imbalance a customer has to deal with in its relation with a business organization and power wielding that business organization adopts to entice customers to purchase their products and services.