Our opinion on government intervention and the future of marketing

Our opinion on... government intervention in marketing I wonder whether we, as an industry, the marketing industry, will be around in a few years. Sure, the advertising folks will be there, although some people might argue with me on that. On-line marketers, definitely. Social network site gurus, absolutely. But marketers? I am not sure at all.

It seems forces all around are usurping the role of marketing. We read in business papers (the white kind, not the news kind, as they, like us, are rapidly going into extinction) that companies are eliminating the CMO position and all its sub-folders, asserting that marketing is everything a company does (which is true, but needs a champion and strategist anyway). Futurists tell us that, as everything will be online and consumers will determine what they want to be told about, which eliminates the need for marketers, and so on.

But this is not what concerns me. If we are to be relegated to oblivion because we are not contributing to the furtherance of corporate goals, then so be it. Probably a good thing.

What concerns me is the encroachment of government into the role of marketer. I detect a pincer movement with the forces of politically correct environmentalism on one flank, and bailout madness on the other. When these two meet, as with shingles, we die (for those who are too young or too innocent to remember the great threat of shingles meeting, here is the link: http://www.associatedcontent.com/article/378073/ understanding_shingles_.html).

The first case in point is a Toronto centric case, as are so many truly representative stories. Toronto City Council narrowly passed an ordinance forcing take-out coffee vendors, of all shapes and sizes, to give a 20-cent discount to customers who take their coffee in a reusable container rather than a paper cup. The outcry that followed focused on the question of whether this made environmental sense, not on the marketing issues involved. City councilors in favour of the proposition were guided by a marketing device used by Tim Hortons whereby they already discount coffee taken in one of their spiffy reusable containers, by 10 cents. As Tim Hortons customers (ingrates that they are) continue to demand coffee in paper cups, the councilors have determined that the 10-cent incentive is too low, and they need a 20-cent incentive. These same councilors assured coffee vendors that sales would not

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Protean Strategies is a Toronto based management consulting firm. Since 1997 we have been helping large and small companies convert brand value into higher margins and bottom line profits by understanding their stakeholders needs; building powerful strategies; and aligning business practices with marketing and sales.

be affected by this silliness because, after all, it is only 20 cents.

I don’t know if this is or is not the case. But, I would have thought city government would not know this either. Apparently, nobody else had any concerns – the issue was not whether government had any business telling retailers how much to charge for their product, how to price their product, what the elasticity of demand might be (for all of which we went to expensive colleges and universities and still don’t know), but only whether the city would be more successful investing in a plastic lid separator.

The second case has the potential to be much more disturbing. It concerns the bailout of the auto industry. The conversation going around is whether or not to bail out the big three; but the commonly accepted inevitability, is that if the taxpayer does bail them out, then there will be conditions.

Specifically, they will only be bailed out if they agree to produce cheaper, environmentally positive (i.e. high gas mileage) cars “which today’s consumers want.” They point to Japanese carmakers and say: “Look at them, hey make much more fuel efficient cars, and people are buying their vehicles. If we control the big three we’ll make them make more fuel efficient cars and then people will buy them, too, and the American car manufacturing industry will be saved.” Yes, they say this, and publicly. And, be honest, many of the readers of this blog think the same thing.

Of course, it’s nonsense. First of all, American manufacturers already make as many fuel-efficient cars, if not more. But they also make vehicles that use more fuel because they need to (pick-up trucks, for instance). Secondly, if it is so easy why

would the bailout be needed? (or, for that matter, why wouldn’t somebody like Kirk Kerkorian have done it on his own?). But, we are not hearing any discussion about this. All we hear about are the pros and cons of government intervention, a certain amount of labour baiting, and so on.

Nobody suggests that government fundamentally has no role in determining marketing strategy.

These are not the only cases. We are hearing that AIG needs to change its dealer relations strategies (no more boondoggle meetings for dealers and agents, even though this is a staple of the insurance business); banks need to change their customer attraction and mortgage sales policies (which we may all agree with, but is it up to government to force this?).

And so on.

As an industry, or community, or whatever it is we like to think of ourselves nowadays, we as marketers need to make it clear that macroeconomic issues and social policy will not be solved via micro economic interference at the marketing level. Because, once they start, they’ll never stop. Seriously.

On the other hand, maybe it’s not a bad thing. Fifty three years ago the central planning types in the Soviet union (remember them?) determined they needed to have a sedan and instructed the October Revolution Manufacturing Collective #5202A, to build one and sell it to the apparatchiks in need of transportation.

After fifty-three years, the brand died on October 29, 2008. A victim, according to the Guardian, of falling demand, high commodity prices, and cheap foreign cars flooding the market.

The exact point of which escapes me, but it seems somehow relevant.

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Laurence Bernstein is the founder and managing partner of Protean Strategies/The Bay Charles Consulting Group Limited.

He has been a leading

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proponent of the “new order of differentiation� and has written and lectured on the subject of experiential branding and intrinsic/extrinsic research methodologies in Canada, the US , Europe and China.

Bernstein@proteanstrategies.com www.proteanstrategies.com

In addition to a highly successful 20 year career in advertising and marketing he held senior positions client side in hotel and hospitality companies. Laurence attended the University of the Witwatersrand in Johannesburg and Cornell University in Ithaca , New York This white-paper is based on the original paper on the subject written by Laurence Bernstein and published in the Cornell Quarterly in April, 1999.