Marketing. The art of seduction

In this session we will look at the reasons why you often spend more than you had planned to – and even more than you actually have! We will also discuss ways to protect yourself from irrational spending. But first let’s look at a little tale about motivation, and the scale of our needs and wants. 

Long ago, in a beautiful kingdom, far from the hustle and bustle of urban civilization and the unsightliness of the great metropolis, a wealthy businessman decided to build a factory.

The businessman calculated his investment meticulously, and expected to make substantial profits within a short space of time. The inhabitants of the Kingdom were known to be hard-working, conscientious, mild-mannered by nature, and to have very few financial needs.

After many months of preparation, training and a Grand Opening of the factory, the highly profitable production of designer clothes started. The very first week confirmed the businessman’s estimates: high quality and productivity, combined with a low cost base, promised to generate fast, sizeable and systematic returns.

Finally the end of the month came, and with it pay day. The employees duly collected their salaries and returned to their homes.

The next day, no one came to work. The concerned businessman waited until evening, and then requested an interview with the King of the realm. The King graciously invited him to dinner.

During dinner, the businessman spoke to the King and said: “Your Highness, for a full month now, Your Majesty’s subjects have worked in my factory. I will not say one bad word about them – indeed, they are model employees! None of my other production plants in the world can boast the same quality of employees as this one. Yesterday I paid them their first month’s salaries as we had agreed. No one received a penny less than we had agreed they should be paid, when they first started work at my plant. But today, to my amazement, not a single employee has come in to work! Why? What can have happened?”

The King smiled broadly and replied in a gentle voice.

“My dear, valued entrepreneur from a large, wealthy, far-off land, do you really not understand why no one has turned up today? The reason is simple …”

Can you work out why the inhabitants of the Kingdom did not return to work after their first pay day? If not, just keep on reading what follows, and soon all will become clear.

In some reference sources, you will find marketing defined as a set of techniques used first to identify, and then to meet, our needs. This is one of the greatest and most common misconceptions about marketing. The key purpose of the majority of techniques used in promotional and advertising campaigns is not the identification of existing real needs, but the creation of artificial needs which can then be met.

From the mid-20th century at the latest, marketing has consisted of a set of often very sophisticated techniques that create more and more new needs in our minds. These “needs” are so numerous and very often so superficial that they should rather be viewed as wants or even whims.

Due to the expansion of our consumerist culture via media and marketing techniques, we struggle to set or define a sensible boundary between needs and whims. Leszek Kolakowski, one of the most brilliant thinkers of recent times, put the problem thus:

Those who regard some needs as artificial, say that they do not experience these needs. Indeed, the true test of needs may just be how far they are felt as such by people. In this aspect of human experience, the scale of feelings ranges from the peaks of the Himalayas to the bottom of the deepest trenches under the Pacific. Thus the claim that some needs are natural, and others artificial, begins to sound like a claim that a particular height above sea level, namely the one where the speaker is currently situated, is natural, and all others are false. For example, for a mendicant Buddhist monk, a need for housing, clothing and food (apart from a handful of rice each day) appears artificial, as does the need for social life, education or sexual gratification. And by the same token, a rich Brazilian may well feel a need for four cars to cover different occasions in an equally pressing, authentic way as a poor Brazilian peasant experiences the need for food. (…) It is difficult to take issue with the view that a basic component of social progress is the emergence of new needs, and the transformation of elements that used to serve as means to other ends into stand-alone values. (L. Kolakowski, “Culture and Fetishes”, 1967).

Kolakowski is entirely correct in arguing that the emergence of new needs is a driving force behind the development of civilization, and a guarantor of social progress. This is surely undeniable as far as it goes: yet, in his philosophical investigation into the drivers of social progress, Kolakowski omits the role of marketing, and a consumer-related and financial context generally. We, on the other hand, should also be aware of this further dimension.

Is it more obvious now why the inhabitants of the beautiful Kingdom did not return to work after receiving their first month’s pay? If not – please keep reading.

Here is another little anecdote that demonstrates marketing-logic:

The head of a shoe-manufacturing company sends his Chief Financial Officer to explore the market for their product on a sunny island populated by a happy tribe. After two days, the CFO reports back: “No one here wears shoes. A market for shoes does not exist.” Undaunted, the head of the firm sends out one of his senior salesmen. After a few days he reports back: “No one here wears shoes. The market is unlimited.” Finally the Chief Marketing Officer goes to the island. After two weeks, he reports: “No one here wears shoes, but many locals suffer as a result. Our products should be adapted, as the natives have very small feet. We will be able to convince them to wear shoes if we co-operate with the heads of the tribes. The locals do not know what money is: however, the island produces the sweetest bananas I have ever tasted. I estimate a potential market within three years. I would rate the profitability of our capital at 20% per year. I suggest we should start straight away.”

If you have still not grasped why the inhabitants of the Kingdom abandoned their good jobs in the factory, read carefully how the King explained the absence of his subjects from work:

“My subjects and your staff earned enough money in one month to meet their needs and those of their families for a very long time. Therefore, they can see no reason to make more money by working at your factory. What they got in a month is enough for them.”

So what did the businessman do? He convened a meeting of the Board to work out how to remedy this unexpected problem. The next day he sent out catalogues advertising the variety of goods that money can buy to all of his workers. The mild-mannered residents of the Kingdom had never seen so many fabulous items in their lives. And now they could have them – all they needed to do was to make a little more money. Money was also easy to come by – just put in a bit more work at the businessman’s factory. The catalogue also helpfully explained that you could buy things on credit if you did not immediately have enough cash. You could also encourage your wife and grown-up children to work in the factory to earn more money for your family.

Within a few days after the catalogues had gone out, the absent employees had all returned to work in the factory. The same people who a few days before had concluded that they had enough money to cover all their needs.

Now complete task 1:

Calculate as exactly as possible how much money you spent during the last Christmas holidays.

Make a list – again as exactly as you can – of the items you spent your money on.

Was the money you spent actual available cash (money in the bank), or was it borrowed and/or in the form of credit? Was it surplus money, or generated at the expense of other needs or plans for the future?

Are you able to imagine Christmas without some of your Christmas spending? If so, which items specifically might you be able to do without?

What were your driving forces while shopping? Can you identify possible motives?

In the session 3 I present a Model of Financial Safety. Later on compare your answers with that model.

Based on my experience and observations, I would argue that the two most powerful mechanisms used by modern marketing are:

Sales value (“value for money”);

Presupposition (this is often in the form of hidden persuasion).

Marketing is the theoretical basis for preparing advertisements that sell us values, not whatever actual products or services we part with our money to obtain.

In our imagination:

We don’t (just) buy toothpaste. We buy shiny white teeth.

We don’t (just) buy spices and sauces to make our meals tastier or more interesting. We hope to provide a happy family atmosphere and domestic bliss.

We don’t (just) buy a car. We envisaging climb an imaginary social hierarchy (imaginary, because it exists only in our minds), thanks to the prestige and elegance of the product, and the heart-warming admiration of others who see us in our new cars, bearing their top brand emblems. Yet even the brand emblems themselves are objects of desire: would you buy the latest Jaguar or Mercedes, say, if it was mysteriously decked out with Volkswagen emblems instead? Probably not. However, does a Volkswagen not fulfill the same essential automotive functions as a Mercedes?

We don’t like to think about the fact that we take on credit. After all, we care about the welfare of ourselves and/or our families. In practice however, we too often buy our ideas of wealth and prestige from a bank, which earns a lot of interest for such a service.

When you are late paying a credit installment, you discover that this world of advertising, which has been one of the most important influences on our financial decisions, turns out to be a kind of fatal matrix, in which we can end up being ensnared for the rest of our lives. Worse still, many of us begin to prefer this matrix to objective reality. We prefer the illusion to the truth, because the image created by marketing is desirable and beautiful, whereas the reality is not nearly as desirable, and requires effort, courage, discipline, perseverance, the consistent exercise of critical judgment, and a sound mind.

Advertising messages carry very effective weapons, which can – if we let them – easily turn us into mindless consumers. Their main weapon is psychological suggestion. What is suggestion in the context of marketing? It is a very simple mechanism, built into the advertising message – simple, and murderously effective! Let’s look at a few examples:

Advertisement 1:

Everyone in the picture is drinking fruit juice. But this particular juice, being drunk by a beautiful woman and/or handsome man, is more: it is an object of desire. When they walk down the street carrying this special juice in their hands, everyone’s head turns, all the eyes follow them.

What conclusions do I draw? What happens in my unconscious mind? Since everyone else clearly desires the juice, then so should I – there must be something magical about it. If I don’t buy it, I will be flying in the face of reason, because it is obvious we all need it.

So I buy the juice, even though until yesterday I used to eat fresh fruit. The only thing that is really different between fresh fruit and the juice is that no one will admire me when I come out of the store with fruit. (Even worse, this pretty cool neighbor looks at me with my bag of fruit with a hint of irony – or is it pity? – in her eyes. She might already have switched to the juice, and I, being behind the times and hopelessly old-fashioned, am acting ridiculously, against all reason).

Advertisement 2:

Everyone from time to time has a problem concentrating. Everyone has an occasional problem getting to work. This being so, at such vulnerable moments they should reach for this extraordinary vitamin preparation. If they use it, not only will their concentration improve, but they will also be promoted at work and get a pay raise.

What conclusions do I draw? What happens in my unconscious mind? Like everyone else, I have trouble with concentration. If I choose to ignore this product, I will not be able to concentrate and I will most likely be fired. If I lose my job, I will no longer be able to earn a living and keep up the repayments on my loans.

Oh dear! It’s better to be safe than sorry – I’d better buy this product. I have so much to gain if I buy it, so much to lose if I don’t! So I go ahead and buy it, even though until I saw this advertisement, I coped well enough without this vitamin preparation.

Advertisement 3:

Tough guys are shown drinking beer after work. This seems to make them even tougher. Beer is their reward for their hard work – and this particular beer enhances their hard nature. But these guys are not just tough. They are contented, relaxed, confident, handsome, friendly, articulate. Women watch them admiringly, even longingly.What conclusions do I draw? What happens in my unconscious mind? As I don’t drink beer, I can’t be tough, and deserve no one’s admiration. If I do not choose and buy this particular beer, I will not be noticed and accepted among guys like this, who earn such admiring glances from beautiful women.

Until recently, I preferred mineral water in the evenings. However, I want to be like these guys and have what they’ve got, so from now on, I will start buying and drinking this beer.

Now complete task 2:

How much shopping do you do to prove to yourself and/or others that you are with it, cool or sophisticated? Can you think of examples?

Calculate the cost of your desire for prestige, attractiveness and/or coolness, in financial terms. How much money do you actually spend per month building up your masculine or feminine image, your picture of family happiness and/or your vision of professional status? Estimate as exactly as you can the total cost of such (supposedly) essential wishful thinking over (a) a month, (b) a year, (c) 5 years and (d) 10 years.

In Session 1, “The Power of Financial Statements,” I demonstrated the most effective personal defence tool against consumer traps: the financial statement. If by any chance you still doubt the importance of financial statements, enter into negotiations with a bank or other financial institution. You will very quickly see how important a place they hold, and how much value they possess, for the people who represent those companies.

A word of warning, however: Our awakening from the consumerist matrix may be rude, and even painful.

If you do not treat your finances with care, you will find no shortage of hands ready – under any pretext, and employing what in the cold light of day are the most implausible arguments – effectively, and systematically, to remove the money from your pocket, wallet or purse.

Does this mean that you should wherever possible shun all goods or services? Do you have forever to steer clear of good cars and high quality suits? No, by no means, if you can really afford them. However, you will need to finance your expensive items and accessories in other ways.

What ways, exactly? We will come to this in the following sessions of this course.

Andrzej Manka

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This article is part of my Online Personal Financial Planning Course: How to make your money work for you!

The course should prove helpful for anyone interested in efficient methods of debt management and for those who want to achieve their own financial freedom. However, it is also a part of a larger undertaking in financial education. Alongside the internet course, workshops and financial consultancy are also available in an integrated package of support. 

 

Opinions about the Online Personal Financial Planning Course: How to make your money work for you!

“Andrzej Manka has put together an excellent personal finance primer for anyone interested in personal finance management. I was very impressed with the overall content and the specific advice provided.”

James L. Paris, Best-Selling author of more than 10 books including “Money Management for Those Who Don’t Have Any”.

“This course is an excellent resource for anyone wanting to gain control of their financial life. The hazards are real, the financial sessions solid, and the charts handy, if you find yourself dwelling on a few of the verses at the end of the sessions that might not be such a bad thing.  Of course, the primary task is to get started managing and growing your financial future. Andrzej Manka’s guide will certainly help you take forward steps on this exciting journey.”

Elizabeth Ann Lawless, #1 Amazon best-selling author, publisher and speaker, Dallas, Texas, USA.

Andrzej Manka

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