Commercial Marketing and Social Change

by Alan R. Andreasen

Commercial marketing is a set of activities carried out by a commercial enterprise designed to influence others to act in ways that will maximize value for the owners of the enterprise over the long run[1]. Over 100-plus years of growth and development, commercial marketing has evolved practices and concepts that have the potential to make significant contributions to social change. On the practical side, commercial marketers have learned that promoting social change – for example through cause-related marketing (CRM) partnerships – is a tactic that can significantly impact shareholder value. CRM activities today generate over $3 billion in corporate revenues while contributing in important ways to challenges like breast cancer, drinking and driving, and smoking cessation.

However, it is the field’s conceptual developments that stand to make the most profound and enduring contributions to social change. Bill Smith proposes four basic concepts as the essence of these contributions:

  •  A philosophy of exchange
  • Continual marketing research
  • The marketing mix
  • Competitive positioning

I would argue that there are three other major contributions and a number of other minor conceptual frameworks that also deserve close attention. Further, I will also argue that there is more to the idea of competition than Smith has adduced.

Major Contributions

A. The Centrality of a Customer Orientation

Behavior change is ultimately in the hands of the target audience. Laws can be passed, environments altered and communications campaigns put into place. But if individuals choose not to act, social change will not happen. Commercial marketers know this because their success is measured in sales and revenues. They learned many years ago that they must place the individual consumer at the center of all they do not see the customer as a target to be somehow manipulated. They recognize that an understanding of the consumer and what make him or her act is the essential first step in any strategic planning process. It is this understanding that leads successful marketers to craft desirable exchanges, a sound competitive positioning and an effective marketing mix. It is this understanding that also causes them to place heavy reliance on pretesting and monitoring as strategies are implemented.

A customer orientation also leads commercial marketers to the view that, if campaigns are not successful, the fault must lie with the campaign and its planners and not with target customers. Social marketers too often adopt an “organization-centered” mindset in part because of their own strong belief in the behaviors they are promoting.

B. Markets Must Be Segmented

Commercial marketers have long since abandoned the notion of mass marketing. Their fanatical attention to customer insight leads them to recognize that customers differ significantly in what they seek in life and how they would respond to change strategies and tactics that the marketer might put in place. An approach of developing the “one best campaign” is viewed as not responsive to the diversity of customer markets and inefficient in its use of limited resources. Many marketers today have gone to the opposite extreme of developing “markets of one” through data-mining research and crafting influence approaches that respond to – and take advantage of – each individual’s uniqueness.

Direct mail, telemarketing and the internet make “markets of one” conceptually feasible. However, marketers also recognize that such a high degree of articulation often is not economically efficient and so they constantly seek segmentation frameworks that group audiences in ways that permit both effective and efficient strategies. In recent years, segmentation efforts have centered less on easily acquired demographic information and more on insights into consumer cognitions, personalities and lifestyles.

Although social marketers today often segment target audiences they typically use demographic bases. There have been attempts to develop more sophisticated approaches such Porter Novelli’s Healthstyles and AED’s Greenstyles frameworks. However, this is still an area that merits much more basic research and refinement.

C. The Need for Risk-Taking

Commercial marketers operate in chaotic environments with imperfect data. They recognize that whatever actions they take today will inevitably not work as planned because consumers and environments will change – and their competitors will not stand still. In the face of this chaos, the typical marketers’ response is not to seek out “perfect” information or await clearer forecasts but to take actions that involve risk, recognizing that effective monitoring systems (as Smith recommends) will allow them to make the changes needed to gradually approximate their desired outcomes. Their mantra is “Ready, Fire, Aim.” Many others seeking social change seem to follow an approach that can be characterized as

“Ready, Aim, Aim, Aim, Aim – – Fire(maybe).”

Other Potentially Useful Concepts

1. Branding

Marketers from Coca-Cola to the Ritz-Carlton have long known that long term influence programs that involve products or services will be significantly enhanced by careful branding strategies. Branding strategies recognize that target audiences acquire things and patronize services that they like and trust and that have predictable, desirable qualities. Brand “shorthand” tells target audiences what they will be getting if they transact with the business and marketers spend vast sums perfecting their brands and the images associated with it. They are relentless in their stewardship of these brands to ensure that they consistently deliver on the “value proposition” that the brand has taught consumers to expect.

Brands make strategies more efficient because they become “shorthand” for many key properties and they help build repeat behaviors (brand loyalties) that would be essential to many social change programs’ long term success. Branding is common in commodity-based social marketing. However, its use in service-oriented or “pure behavior” programs is still in its infancy.

2. Franchising

Marketers often cannot reach vastly dispersed audiences through their own channels and staff. Thus, they have crafted partnership vehicles called “franchises” that allow them to extend their reach while, at the same time, controlling the content and delivery of their marketing strategies. This approach has proven particularly valuable as they have sought to reach geographically distant markets.

Many charities engaged in social marketing efforts (such as Habitat for Humanity) rely on elements of a franchise model. However, other multisite programs could well gain greater control and impact with this approach.

3. Consumer satisfaction/dissatisfaction.

Marketers know that it easier and less costly to keep existing customers than it is to find new ones. Thus, they are slavishly attentive to the quality of customer experiences. They invest significant sums into systems to track consumer satisfaction/dissatisfaction and complaining behavior and into mechanisms for redressing wrongs or imperfections in the system. A major insight from this focus has been to recognize the importance of customer expectations in evaluations of product or service encounters. Marketers have learned that unrealistic expectations that have been raised through exaggerated brand promises or overly enthusiastic promotions or sales presentations will not only discourage repeat patronage but also provoke negative word of mouth commentary that can reach 8-10 other target audience members.

Social marketers who must focus on maintaining long-term behavior change would benefit from more elaborate and sophisticated tracking of consumer satisfaction/dissatisfaction and complaining behavior.

4. The Distinction Between Product and Services Marketing

Marketers have learned that there are important differences between products and services that make the challenges of marketing the latter more difficult. Services are intangible in that customers cannot inspect or handle them before acquisition. They are perishable in that they cannot be stored – unfilled airline seats on a departing flight cannot be warehoused to meet later demand. They are variable – a restaurant meal one night or a doctor’s visit one afternoon may not be the same as would be encountered the next time. Finally, they are inseparable from the customer who contracts for them – the diner who savors the meal or the patient who is tested or who (accurately or inaccurately) reports symptoms.

Service marketers, therefore, put special effort to: (a) attaching tangible features to their offerings through logos, building “atmospherics”, and the appearances of staff; (b) manage demand to better match perishable supply; (c) invest huge sums and time in training staff to deliver consistent service at the quality level the marketer (or the brand) promises; and (d) pay close attention to personal interactions with customers to make sure that the latter derive the most benefit – and satisfaction – from every encounter with an organization staffer. Many social marketers are, in fact, in the service business and would benefit from addressing these unique dimensions.

5. Product/Service Life Cycle

Many years of experience have taught marketers that product or service innovations go through a predictable life cycle following their launch. They know they will be more effective if they plan ahead and tailor their strategies to these predictable stages. The first stage is the introduction period where emphasis needs to be on building marketing systems, establishing the brand and its promise and seeking out innovators and early adopters as first patrons. Stage two is growth where (one hopes) product or service sales accelerate significantly and where attention must be paid to extending coverage, perhaps developing franchises, and beginning to plan follow-up product and service variations to capitalize on early success. Stage three is maturity where competition is fierce, new organizations have appeared to challenge success and acquisition of further gains becomes harder and more expensive. Stage four is potential decline when the venture has peaked and is replaced by superior alternatives. Here, attention must be paid to either “milking” the existing offering or finding innovative ways to rejuvenate it.

Anticipation of these natural progressions would leave prescient social marketers poised for each new challenge and less likely to waste valuable resources.

A Comment About Competition

As the exposition above suggests, commercial marketing offers concepts and tools that are potentially useful in (a) crafting strategies and tactics to influence people to bring about social change and (b) managing the organizations that create these strategeis and tactics. It is in the later regard that I wish to extend Bill Smith’s comments about competition.

Consumer insight makes abundantly clear that every behavior we wish to influence has at least one competitor, even if that competitor is the status quo, and that effective strategies must address that competition. However, organizations also compete in commercial marketing. Commercial marketers live and breathe market share as their measure of corporate self worth. And this means that they constantly think about ways to “beat out the other guy.”

By contrast, most enterprises in the social sector reflect a culture in which inter-organizational competition is considered unseemly. Although such competition is grudgingly recognized in the domains of grant-getting and fund-raising, blatant attempts to be better than direct competitors is thought to be “not nice.” While I do not wish to recommend the adoption of unbridled cut-throat competition, I do believe that healthy inter-organizational competition can offer two major gains to social change programs:

  1. It would intensify the focus on providing superior value for target audiences as compared to competitors. In my experience, social change programs do not think enough about how they can be better than competitors. If they did, they would put more resources into building marketing capabilities, strengthening their brand, improving customer research skills and so forth. They would also spend more effort learning what competitors are doing and appropriating approaches that these competitors do better. If competitors did the same thing, this can only mean that the entire cadre of competitors would continually ratchet up their performances. General Motors is better because it watches Toyota and Mercedes. Coca-Cola is a better marketer because it has to beat out Pepsi!
  2. It would provide new goals for people in the organization and a new benchmark against which to measure progress. It should not be a “bad thing” for an organization to try to be better than other organizations like themselves. It is healthy human nature to want to be “better than the other guy” and I would argue that it is more motivating to have a real entity to chase after or outdistance than to try to achieve — and be rewarded by – more abstract organizational goals like growth in staff size or annual operating budget.

[1] Some commercial marketers claim to achieve a “double bottom line” which adds social outcomes to financial performance.