Aug 10, 2009

Hidden Flaws of Spending (# 3): Marketing Gimmicks

Photo by Shiny Things


This post is continuation of the series, “Hidden Flaws of Spending: Why do we make Fatal Money Mistakes”. In part 1 & 2, I discussed about individual specific flaws in our spending decisions such as hedonic adaptation, instant gratification, lifestyle inflation, relative wealth and mental accounting.

In this post, I’m going to discuss how corporates also influence our decision making in various subtle manners without us realizing it and consequently we make sub-optimal spending decisions and ultimately waste more of our precious time and hard earned money.

I’m not sure whether marketing is a necessary evil or the root of all evil, but it’s definitely causing a lot of harm. Let’s see why:


Advertisement: The Biggest Marketing Gimmick
Marketers wield the greatest influence over consumer behaviour. Advertising via the medium of television, newspapers, magazines etc influences our behaviour and buying habits and successfully lures us (as unsuspecting consumers) into buying goods and services, even if there is no need. It creates a sense of dissatisfaction among us with our current possessions so that we will buy new ones.

Television probably wields the greatest influence on us as we watch commercials as vividly as programs. The more TV we watch, the more malls we visit, the more we are likely to spend. It’s nothing but becoming slaves to advertising.

Marketing is doing an excellent job of stimulating our desire to want more convenience and luxuries, and further turning our wants into needs by brainwashing us into thinking that we need a lot more than required; thus, marketing is promoting over-consumption.

Felicity Lawrence in her book
Eat Your Heart Out: Why the Food Business is Bad for the Planet and Your Health writes how big companies exploit innocent consumers

“The genius of globalised capitalism is not just to give consumers what they want, but to make them want what it has to sell”.


There’s no dearth of sly companies eager to take advantage of our lack of emotional intelligence and personal finance knowledge. This is another pollution mankind needs to deal with besides environment pollution and climate change.In fact, it seems to be the biggest cause behind every crisis facing mankind, be it the climate crises (the inconvenient truth of global warming and environmental disaster), the health crises, or the financial crises.

Read this interesting post ‘Two Planets’ by Yvette. She writes,

“I doubt reality will ever triumph over profit unless the capitalist system itself is destroyed. This is the only chance of changing our lifestyle”.


Further Joe comments in the same post [Two Planets],

“Capitalism requires a consumer base. It creates an environment where we are bombarded with commercials telling us we need to buy all this crap that we don’t need. Within capitalism corporations do not just fill a need that already exists. In order to maximize profits and be competitive, corporations invent the need (demand for their products) through clever advertisements. The result of this is obviously that we consume far more than we need to”.


To conclude, in my view, although overproduction and overconsumption of goods increases corporate profits along with the increase in a nation’s GDP (growth indicator), it leads to excessive wastage of natural resources (which could be used for other productive purposes) in a resource depleted world, besides environmental pollution and degradation; hence, it is unethical and against the principle of sustainable development.

This so-called economic progress is like taking one-step forward and two-steps back. Perhaps, we need another Mahatma Gandhi to save this Planet Earth from the clutches of greedy corporates and uncaring governments.

What do you think? And if you don’t, please start it now because it affects each one of us and by raising our awareness of these issues, we can make a big difference.

But I know majority of you won’t care because in the words of Upton Sinclair,

“It’s difficult to get a man to understand something when his salary depends upon his not understanding it”.

2 comments:

  1. Excellent Fisher.... some other marketing concepts being applied in India currently are
    Companies are packaging things in non-standard weights but retaining the old prices.. eg.. Biscuits, salty snacks ,shampoos etc.. most consumer goods are coming in no std. weights but the older price of 2,5 and 10 is being retained... this makes it so confusing for consumers as u cannot compare a Parle-G biscuit pack to a Britannia ..

    ReplyDelete
  2. Samant: That's very true.

    ReplyDelete

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