Principles for Public Policy Towards Marketing: Chapter 10

Principles for Public Policy Towards Marketing
Principles for Public Policy Towards Marketing

Finally, we propose seven principles that might guide the formulation of public policy toward marketing. These principles reflect assumptions underlying much of modern marketing theory and practice.

The Principle of Consumer and Producer Freedom

As much as possible, marketing decisions should be made by consumers and producers with relative freedom. Marketing freedom is important if a marketing system is to deliver a high standard of living. People can achieve satisfaction on their own terms rather than in terms defined by someone else. This leads to greater fulfillment through a closer matching of products to desires. Freedom for producers and consumers is the cornerstone of a dynamic marketing system. But more principles are needed to implement this freedom and prevent abuses.

The Principle of Curbing Potential Harm

As much as possible, transactions freely entered into by producers and consumers are their private business. The political system curbs producer or consumer freedom only to prevent transactions that harm or threaten to harm the producer, consumer, or third parties, Transactional harm is widely recognized


The Principle of Meeting Basic Needs

The marketing system should serve disadvantage^ consumers as well as affluent ones. In a free-enterprise system, producers make goods for markets that are willing and able to buy. Certain groups who lack purchasing power may go without needed goods and services, causing harm to their physical or psychological well-being. While preserving the principle of producer and consumer freedom, marketers should support economic and political actions to solve this problem. The marketing system should strive to meet the basic needs of all people, and all people should share to some extent the standard of living it creates.

The Principle of Economic Efficiency

The marketing system strives to supply goods and services efficiently. The extent to which a society's needs and wants can be satisfied depends on how efficiently its saree resources are used. For marketing to work efficiently, the system needs competition. An open market allows for competition, free flow of goods, freedom of information, and informed buyers. These make a market efficient. To make profits, competitors must watch their costs carefully while developing products, prices, and marketing programs that serve buyer needs. Buyers get the most satisfaction by finding out about different competing products, prices, and qualities, and choosing carefully. The presence of active competition and well-informed buyers keeps quality high and prices low. But, more importantly, competition brings out the best in products and services. Producers that strive to offer the best value can expect to thrive.

Marketing's Impact on Other Businesses: Chapter 8


The Principle of Innovation

The marketing system encourages genuine innovation to reduce production and distribution costs and to develop new products to meet changing consumer needs. Much innovation is really an imitation of other brands, with a slight difference to provide a selling point. The consumer may face ten very similar brands in a product class. But an effective marketing system encourages real product innovation and sustainable differentiation to meet the wants of different market segments.

The Principle of Consumer Education and Information

An effective marketing system invests heavily in consumer education and information to increase long-run consumer satisfaction and welfare.

The principle of economic efficiency requires this investment, especially in cases where products are confusing because of their numbers and conflicting claims. Ideally, companies will provide enough information about their products. But consumer groups, regulatory agencies, and government can also give out information and ratings. They should encourage more access to the media for the arguments for or against the consumption of goods or services, where neither businesses nor customers are behaving responsibly.


The Principle of Consumer Protection

Consumer education and information cannot do the whole job of protecting consumers. The marketing system must also provide consumer protection. Modern products are so complex that even trained consumers cannot evaluate them with confidence. Consumers do not know whether a mobile phone gives off cancer-causing radiation, whether a new car has safety flaws, or whether a new dmg product has dangerous side effects. A government agency has to review and judge the safety levels of various foods, drugs, toys, appliances, fabrics, cars, and housing. Similarly, it has to assess the integrity or professionalism of service providers like banks, insurance companies, doctors, and police forces. Consumers may buy products but fail to understand the environmental consequences, so consumer protection also covers production and marketing activities that might harm the environment. Finally, consumer protection prevents deceptive practices and high-pressure selling techniques where consumers would be defenseless. These seven principles are based on the assumption that marketing's goal is not just to maximize company profits or total consumption or consumer choice, but rather to balance that with the maximization of life quality. Life quality means meeting basic needs, having available many good products, and enjoying the natural and cultural environment. Properly managed, the marketing system can help to create and deliver a higher quality of life to people around the world. The very implementation of the marketing philosophy can therefore be seen as a productive activity, not; destructive evil. Responsible marketing works.

Business Actions Towards Socially Responsible Marketing



A marketing system should sense, serve and satisfy consumer needs and improve the quality of consumers' lives. In working to meet consumer needs, marketers may take some actions that are not to everyone's liking or benefit. Marketing managers should be aware of the main criticisms of marketing.

Marketing's impact on individual consumer welfare has been criticized for its high prices, deceptive practices, high-pressure selling, shoddy or unsafe products, planned obsolescence, and poor service to disadvantaged consumers. Marketing's impact on society has been criticized for creating false wants and £00 much materialism, too few social goods, cultural pollution, and too much political power. Critics have also criticized marketing's impact on other businesses for harming competitors and reducing competition through acquisitions, practices that create; barriers to entry, and unfair competitive marketing practices. Concerns about the marketing system have led to citizen and public actions to regulate marketing. Consumerism is an organized social movement intended to strengthen the rights and power of consumers relative to sellers. Alert marketers view it as an opportunity to serve consumers better by providing more consumer information, education, and protection. Environmentalism is an organized social movement seeking to minimize the harm done to the environment and quality of life by marketing practices. It calls for curbing consumer wants when their satisfaction would create too much environmental cost.

Citizen action has led to the passage of many laws to protect consumers in the area of product safety, truth in packaging, truth in lending, and truth in advertising. Many companies originally opposed these social movements and laws, but most of them now recognize a need for positive consumer information, education, and protection. Some companies have followed a policy of enlightened marketing based on the principles of consumer orientation, innovation, value creation, social mission, and societal marketing. Increasingly, companies are responding to the need to provide company policies and guidelines to help their employees deal with questions of marketing ethics. Although there are many questions concerning marketing and social responsibility, companies are urged to consider seven principles for public policy towards modern, responsible marketing: consumer and producer freedom; curbing potential harm; 'meeting basic needs; economic efficiency; innovation; consumer education and information, and consumer protection.

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Social Criticisms of Marketing: High-Pressure Selling

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