Challenges to the Legitimacy of Marketing
Marketing has been having bad press:
- Encouraging consumption > depletion of resources
- Leading to winners and losers in society > inequality
- Unfair practices > insurance mis-selling, fatty foods > obesity
- Market forces may even be too big for democratically elected governments to handle
- But Marketing has been very effective at reinventing itself
- What part will YOU play in this process of reinvention?
So how do societies come to have marketing?
- Societies need frameworks for allocating resources,
- What works for a particular society at a particular time?
- What can we learn about previous frameworks for allocating resources?
- What can we learn about how marketing adapts?
So, where has marketing come from, and where is it going?
- Not new - references in bible and Phoenician traders
- Exchange was a zero-sum game
- Morality of exchange based on theories of political economy
- Influence of religions
Morality of exchange based on theories of political economy:
- Jeremy Bentham (1749-1832): “It is the greatest happiness of the greatest number that is
the measure of right and wrong”
- John Stuart Mill (1804-1873): A hierarchy of pleasures - argued that intellectual and
moral pleasures (higher pleasures) are superior to more physical forms of pleasure (lower
pleasures)
- Exchange was a zero-sum game
The ‘social contract’ – Jean-Jaques Rosseau:
- 1762 book theorized about the best way to reconcile political domination of a class in
society in the face of the emergence of a commercial society
- A political treatise – recognised responsibilities of governing class
- From this a pragmatic perspective – a political order is not sustainable if the contract is
broken
- “If the cottage is content, the castle is secure”
- Still relevant to today's companies?
Adam Smith (1723 – 1790) – The first marketer?
- The Theory of Moral Sentiments - "mutual sympathy of sentiments” emphasises sympathy for
others, which leads people to develop habits, and then principles of behaviour, which come
to constitute one's conscience.
- Wealth of Nations
- “Invisible Hand”
- The Theory of Moral Sentiments emphasises sympathy for others, while The Wealth of
Nations focuses on the role of self-interest
Karl Marx (1818 – 1883):
- Great productivity gains were occurring
, - The difference between the labour- power that the worker sells and the labour that the
worker actually performs is the key to understanding of surplus-value
- Capitalists appropriate surplus value from labour
- Exchange no longer a zero-sum game
- Smith + Marx > Markets now allowed some to get richer than others
Socialism:
- Centrally determined allocation of resources
- “From all according to their means, to all according to their needs”
- A more marginal role for markets and marketing
“Thatcherism”:
- “There is no such thing as society”
- Lesser role of the state – rejection of Keynesian economics
- Avoid a dependency culture
- Individuals should be responsible for their own destiny
- Markets became a quasi-religious ideology
Post WW2 Britain – A swinging pendulum for markets:
- In many European countries, markets seen as failing > pursuit of a utopia via central
control of the economy
- Then central control seen as failing > pursuit of utopia via free markets
- … and repeat
o 1948 in UK much of the private sector was nationalised by a new Labour
government: Health service, railways, coal, steel, gas, electricity ….
A pendulum:
- Francis Fukuyama – “The End of History”
- Liberal democracies / markets are the natural evolution
- But are we seeing a return to more collectivist approaches to organising societies?
Economics 101:
Markets work well where:
- There is a large number of buyers and sellers
- Products are homogeneous
- Information is freely available to everyone in the market
- Buyers and sellers are free to enter or leave the market – no barriers to entry / exit
- There is no collusion between buyers or sellers
- Nobody in the market is able to fix the price of a product
This is what many people think marketing is:
- Highly competitive markets:
o Choice, value, availability
o Profits to companies who successfully satisfy customers’ needs
But marketing doesn’t always turn out like that:
- Is there an inherent tendency of marketing to restrict choice rather than promote it?
- Is it inevitable that marketing will favour rich consumers at the expense of the
disadvantaged?
Barriers to entry and exit:
Marketing has been having bad press:
- Encouraging consumption > depletion of resources
- Leading to winners and losers in society > inequality
- Unfair practices > insurance mis-selling, fatty foods > obesity
- Market forces may even be too big for democratically elected governments to handle
- But Marketing has been very effective at reinventing itself
- What part will YOU play in this process of reinvention?
So how do societies come to have marketing?
- Societies need frameworks for allocating resources,
- What works for a particular society at a particular time?
- What can we learn about previous frameworks for allocating resources?
- What can we learn about how marketing adapts?
So, where has marketing come from, and where is it going?
- Not new - references in bible and Phoenician traders
- Exchange was a zero-sum game
- Morality of exchange based on theories of political economy
- Influence of religions
Morality of exchange based on theories of political economy:
- Jeremy Bentham (1749-1832): “It is the greatest happiness of the greatest number that is
the measure of right and wrong”
- John Stuart Mill (1804-1873): A hierarchy of pleasures - argued that intellectual and
moral pleasures (higher pleasures) are superior to more physical forms of pleasure (lower
pleasures)
- Exchange was a zero-sum game
The ‘social contract’ – Jean-Jaques Rosseau:
- 1762 book theorized about the best way to reconcile political domination of a class in
society in the face of the emergence of a commercial society
- A political treatise – recognised responsibilities of governing class
- From this a pragmatic perspective – a political order is not sustainable if the contract is
broken
- “If the cottage is content, the castle is secure”
- Still relevant to today's companies?
Adam Smith (1723 – 1790) – The first marketer?
- The Theory of Moral Sentiments - "mutual sympathy of sentiments” emphasises sympathy for
others, which leads people to develop habits, and then principles of behaviour, which come
to constitute one's conscience.
- Wealth of Nations
- “Invisible Hand”
- The Theory of Moral Sentiments emphasises sympathy for others, while The Wealth of
Nations focuses on the role of self-interest
Karl Marx (1818 – 1883):
- Great productivity gains were occurring
, - The difference between the labour- power that the worker sells and the labour that the
worker actually performs is the key to understanding of surplus-value
- Capitalists appropriate surplus value from labour
- Exchange no longer a zero-sum game
- Smith + Marx > Markets now allowed some to get richer than others
Socialism:
- Centrally determined allocation of resources
- “From all according to their means, to all according to their needs”
- A more marginal role for markets and marketing
“Thatcherism”:
- “There is no such thing as society”
- Lesser role of the state – rejection of Keynesian economics
- Avoid a dependency culture
- Individuals should be responsible for their own destiny
- Markets became a quasi-religious ideology
Post WW2 Britain – A swinging pendulum for markets:
- In many European countries, markets seen as failing > pursuit of a utopia via central
control of the economy
- Then central control seen as failing > pursuit of utopia via free markets
- … and repeat
o 1948 in UK much of the private sector was nationalised by a new Labour
government: Health service, railways, coal, steel, gas, electricity ….
A pendulum:
- Francis Fukuyama – “The End of History”
- Liberal democracies / markets are the natural evolution
- But are we seeing a return to more collectivist approaches to organising societies?
Economics 101:
Markets work well where:
- There is a large number of buyers and sellers
- Products are homogeneous
- Information is freely available to everyone in the market
- Buyers and sellers are free to enter or leave the market – no barriers to entry / exit
- There is no collusion between buyers or sellers
- Nobody in the market is able to fix the price of a product
This is what many people think marketing is:
- Highly competitive markets:
o Choice, value, availability
o Profits to companies who successfully satisfy customers’ needs
But marketing doesn’t always turn out like that:
- Is there an inherent tendency of marketing to restrict choice rather than promote it?
- Is it inevitable that marketing will favour rich consumers at the expense of the
disadvantaged?
Barriers to entry and exit:
