The Marketing Matrix

How the Corporation Gets Its Power – And How We Can Reclaim It

Gerard Hastings

• Publisher: Routledge
• Year: 2013
• Print ISBN: 9780415678612
• eBook ISBN: 9781136228919
• Topic: Business
• Subtopic: Business General
• Index: Business

In the hands of the corporate sector, marketing has turned us into spoilt, consumption-obsessed children who are simultaneously wrecking our bodies, psyches and planet. Given the fiduciary duties of the corporation, notions like consumer sovereignty, customer service and relationship building are just corrosive myths that seduce us into quiescence, whilst furnishing big business with unprecedented power. Corporate Social Responsibility, the ultimate oxymoron, and its country cousin, Cause Related Marketing, are just means of currying favour amongst our political leaders and further extending corporate power.

So it is time to fight back. As individuals we have enormous internal strength; collectively we have, and can again, change the world (indeed marketing itself is a function of humankind's capacity to cooperate to overcome difficulties and way predates its co-option by corporations). From the purpose and resilience Steinbeck's sharecroppers ('we're the people – we go on'), through Eisenhower's 'alert and knowledgeable citizenry' to Arundhati Roy's timely reminder about the wisdom of indigenous people 'are not relics of the past, but the guides to our future', there are lots of reasons for optimism. If these talents and strengths can be combined with serious moves to contain the corporate sector, it is possible to rethink our economic and social priorities. The book ends with a call to do just this.

This compelling and accessible book will be of interest across the social sciences and humanities – and indeed to anyone who has concerns about the current state of consumer society. It will also be particularly useful reading for those marketing students who'd prefer a critical perspective to the standard ritualization of their discipline.

Part I
Out of control

1
The Soft Power of Marketing

The Lifeboat

It was just over half an hour since the passenger ship had gone down and the eight strangers found themselves shocked but safe in a lifeboat. Their condition was better than might be expected, after all the boat was designed for fourteen, so they had plenty of blankets and supplies to go round. Then someone noticed that there were still people clinging to wreckage near where the ship had sunk and suggested they row over to pick them up. This caused a lively debate. It was pointed out that, whilst this would certainly be a nice thing to do, it would make things more difficult and dangerous for them all. At the moment they were warm and well catered for, but if others got into the boat there would be less to go round. And if there were a lot of newcomers they might even swamp the boat. After some toing and froing it was decided to keep well away from the other survivors and concentrate on enjoying the energy dense biscuits and really rather good medicinal rum.¹

Power

Business is an important and valuable part of our society, but like most human endeavours it runs into a dangerous territory when it gets too powerful. This chapter starts by discussing the benefits of business, but then goes on to consider its downsides. It shows that these have been recognized and warned of for many decades and, despite the inclination to identify villains when things go obviously and badly wrong — as in the recent banking crisis — the problems are systemic not individual. Most notably, the corporation, with its separation between ownership and executive decision making, and the compensatory duty to put shareholders’ interests above all others, has generated particular concern. The problems are so serious that the corporation has even been diagnosed as psychopathic.

This begs the question why so little has been done to treat this psychosis. This reticence can be explained by the soft power of modern marketing to charm and please us. It seems churlish to criticize a business approach that presents itself as the consumer’s champion; looking after our interests and making sure our every whim is addressed. But the realities of shareholder focused corporations give the lie to this comforting myth. From this perspective the many skills and tactics of the marketer begin to look sinister rather than endearing.

There is a consequent need for vigilance, and for both internal and external reflection to find a way forward.

Size matters

The ability to do business is one of the things that separates us from the other animals. Barter, trade and the doing of deals is at the core of our capacity to operate collectively. This cooperation is also essential for our survival. We cannot possibly cater for all our worldly needs without the help of others, so we need a way of harnessing this help. Friends and family may well contribute voluntarily, but in a complex world their efforts will not suffice: strangers have to be brought into the equation. Business provides a mechanism for doing this.

Michael, the greengrocer in my Scottish hometown, epitomizes the benefits of business. He provides a good range of the foods we need — from apples to zucchini — and, if asked, will happily try and source items he doesn’t normally stock. His prices are competitive, although most people would probably guess (incorrectly) that he charges more than the local supermarket. Michael also provides a pleasant service, expertly modulated to his customers. The dowager ladies from up the hill get the personal touch and their bags packed, the children are handled with kindness and respect and those customers who show a taste for it get a fine line in Scots wit and repartee. He even offers a home delivery service. Michael’s business acumen is matched only by his unerring diplomacy: he never risks offending his customers. His adroit fencing of the inevitable anti-English jokes (many of his best customers come from south of the Tweed) is a joy to behold. When he retires from the shop, a job at the United Nations beckons.

What is more, Michael has succeeded in moving across the commercial border and becoming a real friend. He surely likes what we do for his bottom line, but he also genuinely likes us — and we him. Being his customer not only keeps our store cupboard well stocked, it warms the cockles.

Contrast this small town bliss with another Scottish business: the Royal Bank of Scotland. Superlatives and invective have been worn out describing the harm Fred Goodwin and his colleagues caused. Fred Goodwin was CEO of RBS and his calamitous leadership epitomizes the worst of the 2008 financial crisis: macho management, hubris and greed. His crude attempts to destroy evidence about the mistakes made on his watch earned him the sobriquet ‘Fred the Shred’. Cupidity and insane excess brought the bank to the brink of ruin — and came close to taking the whole country with it. It is tempting to see this as an anomaly, driven by particularly toxic business models in a temporarily out of control financial sector.

Neither comfort blanket survives closer inspection, however; the problem is neither new nor a one-off. Steinbeck wrestled with exactly the same issues back in 1939 when writing about the predations of the banks on Dust Bowl farmers. He characterized the bank as a monster which ‘needs — wants — insists — must have’:

those creatures don’t breathe air, don’t eat side-meat. They breathe profits; they eat the interest on money. If they don’t get it, they die the way you die without air, without side-meat. It is a sad thing, but it is so. It is just so.²

Systemic flaws

It is painful to admit it, but the problem here is not Fred Goodwin’s greed (palpable though this remains), any more than the solution is somehow moored in Michael the greengrocer’s good nature. The problem is systemic. As Steinbeck suggests, individuals just get ‘ensnared’ — some more willingly than others. And here the monster analogy breaks down; it personalizes the situation too much. Banks are not creatures at all; they do not have feelings or thoughts; they are institutions with rules and operating procedures. They are governed by these rules, just as climate is governed by the rules of nature. Complaining that a bank puts profit before people is like criticizing a dog for chasing the butcher’s van. It is just what they both do.

However the dog and the company differ in the size of their appetites. The dog will be single-minded in the pursuit of food and if necessary will fight hard to get it; but it also has its limits. It will eat until it is full (or in the case of my friend’s dog, sick), then stop. A finance company has no such delicacy: ‘the bank — the monster has to have profits all the time. It can’t wait. It’ll die. ... When the monster stops growing, it dies. It can’t stay one size.’³ It brooks no limits. Steinbeck is not attacking business any more than this book is; after all his sharecroppers were business people. They too had to turn a profit; indeed it is their failure to do so that has got them into the parlous position described in The Grapes of Wrath. He is simply showing what happens when business gets too big and ownership becomes separated from real lives. He is introducing us to the realities of the modern corporation — whether in the finance or any other sector.

The essence of the corporation is that executive decision making is separated from ownership: CEOs spend other people’s — shareholders’ — money. Because of this, very strict rules are put in place by government to make sure that shareholders’ interests (and therefore profits) always come first. This ‘fiduciary imperative’ ensures that the focus never leaves the bottom line. Even the excessive levels of bonuses and executive pay that we have witnessed in recent years are justified in terms of shareholder returns: ‘it’s the only way we can get and keep the best people’.

This does not mean that everything corporations do is wrong; they do, for example, bring employment, promulgate safe working practices, stimulate infrastructure development, warn their customers about faulty products, improve food hygiene and support good causes. The key point, though, is that they do these things either because they are compulsory (e.g. providing safety gear in factories or obeying food hygiene laws), where not doing so would harm their brands (witness Nike’s sensitivities about sweat shops) — or where the costs are outweighed by the business benefits that result. In other words they do them because they are good for profits as well as the rest of us. And when there is a conflict, the former will always win out. Always.

On the psychiatrist's couch

This is what leads Joel Bakan to diagnose the psychopathy of corporations.⁴ This may seem like a harsh judgement, but certainly when things go wrong it is difficult to disagree. When, for example, Ford hid the fault on its rather too hastily launched Pinto model which caused the petrol tank to explode in an entirely predictable way, and a leaked memo showed that management had reasoned that it was cheaper to pay what the lawyers estimated to be the likely damages than re-engineer the car. They even calculated a cost per death figure. Or when inadequate maintenance led Union Carbide’s chemical plant to leak massive quantities of lethal methyl isocyanate into a heavily populated suburb of Bhopal killing 8,000 people and exposing up to half a million others to the toxic gas and the resulting congenital illnesses, deformities and lingering death. A quarter of a century later, Union Carbide is now the wholly owned subsidiary of another corporation, Dow Chemicals, but the poisoning continues. Chemicals at the aging plant, which has now been offloaded on the public sector, are still leaching into the drinking water of 30,000 local people.

In such cases criminal selfishness seems to be a fair assessment.

However psychopaths are not always that obvious. A paper in Scientific American explains how, because they are ‘superficially charming, psychopaths tend to make a good first impression on others and often strike observers as remarkably normal’.⁵ As we will see, corporate marketers are very good at ‘superficial charm’ so we have to be alert. Nonetheless it is fairly easy to spot psychopathic symptoms in specific industries.

The tobacco industry has for decades knowingly sold a product that kills one in two of those customers who do not manage to quit. It gets them young — in the US for instance 88 per cent of smokers start as children — and then, thanks to nicotine, holds on to all too many. We all know this: just think how daft it would be to push an adult non-smoker into trying a cigarette, as you might if he or she refused a chocolate — ‘go on, these are really tasty ... it’s a new menthol flavour ... you know you want to ...’. We all just take it for granted that adults do not start smoking; that smoking is a paediatric epidemic. In the UK at least, people are gradually prising themselves free from tobacco, but 100,000 Britons still die needlessly early every year — and tobacco companies continue to do all they can to encourage them to continue doing so. And in the rest of the world — especially poor countries with few tobacco control policies — Big Tobacco continues to ride roughshod. The World Health Organization (WHO) estimates that tobacco will be killing more than eight million people a year by 2030.⁶

Then there is the beverage alcohol industry. WHO estimates that alcohol kills 320,000 young people (aged 15–29) every year and is responsible for 4 per cent of all deaths — even in a world where the majority of adults are teetotal.⁷ Add to this drink driving, domestic violence and crime (most of which in ‘wet’ countries like the UK and the US is drink fuelled). The point is not that all of the problems of alcohol use can be laid at the industry’s feet; humans were getting drunk for millennia before Diageo or Miller Brewing came into existence. It’s just that the corporation, with its compulsion to grow and feed its shareholders, jet-fuels the process. It is permanently programmed to put the business case before the social cost. How, for example, could alcopops — the unholy cross-breeding of a children’s soda with a powerful narcotic — ever be deemed the product of a socially responsible company? Or toffee flavoured vodka? Or lemon meringue shots?

Or indeed, given our collective weight problem, a burger that gives you half your daily salt, sugar and calorie intake all in one go (even before you count in the fries and the shake)? Given that over a third of Americans are now not just overweight but clinically obese, at an estimated medical cost of $168 billion⁸ a year, space in the psychiatrist’s consulting room also has to be found for fast food companies. Again, not that the world’s expanding girth is all their fault — increasingly sedentary lifestyles are, for instance, partly to blame. But given the problem, the largely untrammelled existence of organizations whose raison d’être is to sell ever more fat, salt and sugar to the exclusion of all other priorities seems, at best, perverse.

And we haven’t yet considered the arms industry. Remember that one of the reasons the US and UK governments were so convinced that Saddam Hussein had contraband armaments was because he had been supplied by American and British arms manufacturers in the first place. Half a century ago a Republican president and former soldier, Dwight D. Eisenhower, warned the world of the growing power of what he evocatively labelled the ‘military industrial complex’.⁹ He saw its ‘unwarranted influence — economic, political, even spiritual’ — being ‘felt in every city, every Statehouse, every office of the Federal government’, warning that ‘we must not fail to comprehend its grave implications. Our toil, resources, and livelihood are all involved. So is the very structure of our society.’

His words were prophetic: think Blackwater, Halliburton and Bechtel in Iraq — and they also have traction way beyond the arms industry. He warned against the lure of a ‘miraculous solution to all current difficulties’ — from international relations to the farmyard. He used the term ‘balance’ no fewer than ten times in the fifteen minute address, calling for

the need to maintain balance in and among national programs, balance between the priv...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of figures
• List of tables
• List of boxes
• Foreword: why the matrix matters
• Preface
• Acknowledgements
• PART I Out of control
• PART II Solutions
• Notes
• Index