Marketing and Modern Consumerism
THE AUSTRALIA INSTITUTE
Marketing and Modern Consumerism
A speech to the Third National Consumer Congress
Melbourne 16 March 2006
In a previous era, there was a clear distinction between ordinary goods consumed by the masses and luxury goods consumed by the wealthy minority, the richest 5 per cent or so of the population. The breakdown of this distinction over the last two decades − the so-called democratisation of luxury − tells us a great deal about the spread of affluence, techniques of marketing and the uniqueness of modern consumerism.
When the general population now emulates the spending and consumption habits of the wealthy, prestige brands and luxury styles of particular goods are marketed to the masses. Even people on modest incomes aspire to Luis Vuitton—if not the handbag, at least the T-shirt. Market-watchers have adopted the ugly term “massclusivity” − “the endless quest for bringing exclusivity to attention-starved masses”.1 As a result, a distinction is drawn between the specialised luxury consumption that is confined to the mega-rich and the forms of luxury consumption characteristic of the bulk of the population.
In an affluent society dominated by a marketing culture, consumption is no longer about satisfying our needs but creating a sense of self. The marketers understand this far better than we do. In the words of the founder of a UK-based advertising agency:
With prestige labels, we aim to relate the brand in some way to people’s aspirations, or the way they would like to live their life, or be perceived in life.2
Television and magazines play a crucial role in this process of providing personal identities that people can adopt. The wider message of advertising is to communicate that opulence is normal and attainable. As House & Garden magazine declared: “What was once considered extravagance is now considered the norm”.
For example, Australians are not satisfied with standard household appliances but demand high-quality professional ones. Instead of a standard gas or electric stove, kitchens are adorned with ovens with six cooking functions, turbo grills, touch controls, triple-glazed doors and the ability to defrost food before cooking it.
Increasingly, the kitchen in the home is being duplicated by super barbeques promoted as the ‘kitchen outdoors’. [OVERHEAD] While a barbeque in the 1980s was typically assembled at home from 150 bricks, a hot plate and a wood storage area, in 1998 the top of the line model cost $2,000. Today the ‘Turbo Cosmopolitan’ at Barbeques Galore, described as ‘Australia’s most prestigious gourmet outdoor entertainment system’, sells for $4,990. Made of vitreous enamel, it boasts electronic multi-spark ignition in each of six burners, deluxe cast iron plates and a dual glass window roasting hood. It can roast, smoke, bake and grill. However, even the Turbo Cosmopolitan has been superseded by the Grand Turbo, the main features of which are an infrared rotisserie rear burner and a price tag of $6,990.
Few people buy the most sophisticated barbeques, but their existence serves to drive up the level of desire. After looking at the Turbo Cosmopolitan or the Grand Turbo, buyers are more likely to buy the Cordon Bleu for $1,299, ‘the latest look in barbeques and one of our top sellers’, instead of paying $200-$300 for a standard gas model. An advertisement for the Rinnai ‘Monaco Outdoor Kitchen’ (retail price $2,399) declares: ‘I love the look on the neighbours’ face when I roll out the Rinnai’. Australians today can spend more on a set of tongs for the barbeque than they spent on the barbeque itself in 1970.
So, although ordinary citizens have always eyed and envied the rich, in affluent countries in the past two decades a qualitative change has occurred in the relationship. In his book Luxury Fever Robert Frank notes that spending on luxury goods in the United States had been growing four times faster than spending overall. The ‘new luxury’ market is said to be increasing by 10–15 per cent a year, far outpacing the growth of the economy in general. This is reflected in booming sales of luxury travel, luxury cars, pleasure craft, cosmetic surgery, trophy homes, holiday homes and professional-quality home appliances.
The ‘democratisation of luxury’ has undermined the positional signalling of many goods previously reserved for the very rich—a trend due partly to rising incomes and partly to the marketing strategies of the makers of luxury brands, which include the introduction of entry-level products in order to increase market share. The argument is made pithily in a 2004 advertisement for a car. [OVERHEAD] Next to the bold declaration ‘LUXURY HAS ITS PRICE. (How does $39 990 sound?)’, it states, ‘There was a time when luxury was a different thing, stuffy, old and unaffordable. That time has gone …’ Luxury car maker BMW now sells its Series 1 for prices as low as $37,900. [OVERHEAD]
Today’s consumer is not just sold products but persuaded over and over that spending money is an effective means to relieve them of their anxieties, self-doubt and the drudgery of their lives. The term retail therapy has entered the lexicon and reveals a great deal about the psychological function of shopping. Shopping is accepted as an antidote to the daily stresses of life. The ad for a new shopping centre in Sydney captures the zeitgeist. “If it makes you happy, it’s a bargain.” [OVERHEAD]
The contrast with the model of the neoclassical economist could not be starker. Consumers are imagined to go to the market to buy a particular good that will satisfy a need arising out of their pre-given preferences. This process of ‘choice’ is the quintessential ideological justification of free market economics. In fact, it is more accurate to say that the consumer goes to the market a needy mass of confused, self-doubting and neurotic urges looking for a salve. At least, this is what the marketers assume and the basis on which they work. They are masterful at creating our
‘preferences’ for their products, but are the first to appeal to the sovereignty of ‘consumer choice’ the instant anyone suggests any restriction.
When defenders of the market accuse critics of wanting to impose their views of appropriate consumption on others, what they are really doing is abandoning consumers to the overwhelming influence of the marketers. They are saying that none of us should have a political view of consumption, it all must be left to personal choice.
While on the evasions of marketers, I have noticed that in response to critics such as myself, advertisers claim in public that their ads do not persuade people to buy things they don’t want. “Consumers aren’t silly” they claim. Nowadays they are much more sophisticated. I am certain that is not what they tell their potential clients when pitching for business. “To be honest with you, advertising really doesn’t work.”
So the democratisation of luxury means that consumerism today is radically different to that of the past. Universities in Europe are now offering masters degrees in luxury goods management.3 A one-year course costs around $20,000 and includes an internship in a luxury boutique. More sophisticated training is needed not least because these days it is more difficult to identify the typical luxury goods customer. Many luxury brands now offer entry-level products to entice ordinary punters into a taste of the world of luxury. As one graduate of these course, now in the business of marketing luxury goods, observed: “brands sell dreams”. The customer knows that “you may have a product that costs €50 to produce but can retail at €700 … but the power of the brand is the overriding factor that makes that client part with their cash”.4 (Perhaps understandably, he adds: “I try not to think too much about the value and costs of products”.)
For some, brands sell dreams. But why stop there. According to the editor of a luxury magazine, “luxury is about soul”, because “it denotes the kind of person you are and what resonates with you”.5 Conveniently, Jesus was wrong: we can gain the whole world without losing our souls. In fact, according to some evangelical Christian churches, chasing luxury may be the way to salvation.
One French luxury goods customer told a business magazine: “You buy into the dream of Louis Vuitton. We’re part of a sect, and the more they pull their prices up, the more we come back”. I think exactly the same could be said of expensive private schools in Australia. Large public subsidies have not brought the price of admission down; they have only funded more luxurious standards of services − more ovals, conservatoriums, special tutors and overseas trips. Exclusivity is the point and the more a parent pays the more special they feel. The general growth of private school education is a classic case of the democratisation of luxury with.
Unlike the political defenders of the market and so-called ‘free choice’ by consumers, the advertisers and marketers are much more sanguine about the way they manipulate consumers into doing things they don’t want to do and exploiting their weaknesses to do it. In an analysis of the growth of luxury goods markets, the Financial Review noted last year that the boom reflects not so much the growth in prosperity but “the stress and isolation of modern life”.6 The head of planning at the advertising agency Grey Worldwide, Mary Winter, said:
Most people don’t have a sense of self-worth. Buying luxury goods makes us feel special and successful. They make us feel valuable in a world that often tests our sense of self-worth.
The chief strategist at Young & Rubicam agrees, saying that insecurity and overwork are fuelling the growth in sales of luxury goods. It is generally accepted in the advertising world that people want to “reward themselves” for working longer and harder.
But at the same time, people are working longer and harder because they want the luxury goods. [OVERHEAD] In an analysis using HILDA data, economists at the University of Melbourne tested whether the growth in long hours could be explained by:
• consumerism (escalating desires for goods and services, especially funded by debt);
• expectations about what is takes to be an ‘ideal worker’;
• a desire to capitalise on greater investment in human capital;
• increased job insecurity;
• greater flexibility in the labour market;
• and, a number of other possible explanations.7
They found that heightened levels of consumerism reflected in higher household debt was the best explanation of the decision to work longer hours.
The ‘work-and-spend’ logic for long hours, wherein some individuals and families become caught in a web of consumer debt, and work long hours to sustain high levels of consumption, fits the results well.
It is remarkable to find some rather conservative economists concluding that the personal and health costs associated with long hours are perhaps best tackled by overcoming consumerism tendencies and creating more leisure and family time. This would have the incidental benefit of reducing environmental damage.8 In other words, we need to slow economic growth, a subversive conclusion not to be found in any economics text.
Of course, massive resources are spent each year to persuade us to do just the opposite, to set our life gaols according to material benchmarks, to judge our worth by the amount of stuff we consume and to treat any doubts we may have about the value of a money-driven life by going out to shop.
Affluence has transformed the function of our consumption behaviour. High incomes have created a situation in which people who want for nothing must be persuaded to keep buying; this is the principal challenge facing modern consumer capitalism. Part of the response to this is the democratisation of luxury I have already described − the investing of ordinary goods with the characteristics of luxury and then doubling or trebling the price. Only a fraction of the difference in price is accounted for by higher production costs; the bulk of it goes on the marketing of the product, to invest it with the perceived qualities that make it desirable. Running shoes are a classic case. Without marketing, Nike shoes would be indistinguishable from a dozen other makes. As Coles Myer, one of Australia’s largest retailers, admitted to an official inquiry:
…..non-branded footwear often incorporates the same or similar methods of construction, technology and components/materials. Moreover, it is often sourced from the same factory as branded footwear. The commercial reality is that without the brand the consumer perceives no value that warrants a premium price.
After an independent test of running shoes costing from $30 to $230, one tester stated,
‘We find that in every single test we do here, price is no guide to quality or performance’.
This process of investing products with desirable features has reached absurd levels.
[OVERHEAD] For example, you may have seen glossy ads for the Hitachi plasma screen TV which comes with a “remote Power Swivel Stand [that] allows you to adjust the screen 30º either direction of centre from the comfort of your chair”. Explain that to me. Is this what civilisation in Australia has come to?
[OVERHEAD] Another new product now being heavily marketed is a new type of toothbrush which, we are told, uses ‘sonic waves’ to make our teeth cleaner than ever before. “It’s an entirely new type of cleaning technology”, the ad proclaims. “Triple sonic waves move criss-cross bristles 500 times per second.” Sometimes when I look at these ads I think I must have stumbled into a French theatre of the absurd in which critics are competing to ridicule consumerism by developing the most ludicrous product.
Of course, it is not physically possible to consume without limit. So much of the stuff we buy we hardly use or don’t use at all. We buy it, keep it for a while, and then throw it out. Waste does little for our wellbeing, but it is crucial to the health of the economic system, which is why many business groups are implacably opposed to measures designed to tackle waste. While governments urge us to ‘reduce, re-use and recycle’ manufacturers and marketers of consumer goods spend billions persuading us to do otherwise.
A recent survey has revealed the extent of wasteful consumption in Australia and our attitudes to spending money on things we never use. Virtually all Australians admit to wasting money by buying things they never use—food, clothes, shoes, CDs, books, exercise bikes, cosmetics, blenders, and much more. Although nearly two-thirds of Australians say they cannot afford to buy everything they really need, they admit to spending a total of $10.8 billion every year on goods they do not use. That is an average of $1250 for each Australian household.
For me the most disturbing aspect of the social transformation we have undergone over the last two decades has been not so much the proliferation of deceptive and manipulative advertising and marketing, but the penetration of market values into areas of social life where they simply do not belong. This takes a physical form with the proliferation of shops and shopping centres. I flew to Adelaide last month and when I stepped off the plane I though that by mistake we had landed at a shopping mall. Then I remembered that airport owners had realised that commuters spend a lot of time waiting around in airports. The natural response is for people to shop or to engage in what is now called
Children are developmentally incapable of distinguishing facts from deceptive and manipulative advertising. Childhood has become a ‘marketing free-fire zone’, and the lounge room is the kindergarten of consumerism. Children now grow up in a thick fog of commercial messages which conditions their understanding of the world and themselves. Indeed, advertisers now set out to teach children to manipulate their parents.
Whereas marketers once pitched their advertisements for children’s breakfast cereal at mothers—on the basis that parents decide what their children should consume—modern marketers often aim their advertising at children in the belief that the children will then play on their parents’ weaknesses and cajole them into buying the product in question.
[OVERHEAD] A recent television advertisement for the breakfast cereal Coco Pops informed young viewers that Coco Pops contain no artificial colours and are a good source of calcium, iron, and vitamins B1 and B2. The whole presentation is designed to suggest that the product is healthy. [OVERHEAD] Despite the advertisers’ code of ethics stipulating that advertisements for food and beverages ‘must not contain any misleading or incorrect information about the nutritional value’ of a product9, the advertisers failed to mention that Coco Pops are 36 per cent pure sugar. [OVERHEAD]
The TV advertisement relies on a former star of Play School to portray Coco Pops as a nutritious food, and the company’s website says that Coco, the monkey mascot, ‘loves Coco Pops not only because of its delicious chocolatey taste, but also because it contains essential vitamins and minerals …’10 The purpose of these advertisements is to equip children with the argument they need to overcome any parental concern about feeding their children a breakfast cereal is 36 per cent sugar.
The television ad for Coco Pops featured Monica Trapaga, a much-loved presenter from the ABC’s children’s program Play School. [OVERHEAD]. In Affluenza we pointed out that the shares of money spent on advertising junk food as opposed to healthy food are in almost exactly inverse to the proportions of healthy and junk food recommended for a good diet. [OVERHEAD]
Attention has now moved to pre-schoolers—known as ‘tinys’ in the world of marketing. Marketers target tinys because they know that 3-year-olds have considerable pester power, especially with parents who find it difficult to set clear rules. We now know that children as young as 6 months begin to form images of corporate logos. A recent British study found that for one in four children the first recognisable word they utter is a brand name.11 Babies too young to walk and talk are not too young to be imprinted with advertisers messages.
It is hard to see how the defenders of the free market can justify this brainwashing of babies and small children, who are a long way developmentally from being able to make judgements about the value of information coming in or the objectives of those who are communicating with them. Yet a professor of marketing at the prestigious Texas A&M University claims that the invasion of the world of toddlers by marketing is no cause for alarm:
The positive effect I see is that they are able to function in the marketplace at an earlier age. And in a full-blown developed, industrialized society, that’s where we satisfy most of our needs—in the marketplace.12
Such a view makes one ask why reputable universities offer courses in marketing.
Some psychologists are becoming alarmed at the adverse impact of new strategies for advertising to children. Nagging is not just an irritation to be laughed off; it is being used to transform the relationship between parent and child. In particular, concern is being expressed about the way advertising depicts parents as obstacles for children to get around rather than as figures of authority whose opinions should be respected. The ads set out deliberately to undermine the authority of parents in the home, by giving children the techniques to influence their parents.
In a well-known study, Cheryl Idell spelt out the role of the ‘nag factor’ in parental purchasing decisions.13 She found that the majority of today’s parents are influenced by their children’s repeated requests—the usual number of requests is eight—for products. Half the 12- to 13-year-olds she surveyed said they were usually successful in convincing their parents to buy an advertised product they wanted, even if their parents didn’t want them to have it.14
Perhaps it is the very effectiveness of the nagging strategy that has induced Australia’s big advertisers to deny that this is what they do. Thus their Code for Advertising to Children declares that ads aimed at children ‘must not undermine the authority, responsibility or judgement of parents or carers’.
There has, of course, been a massive increase in spending on ads aimed at tweens, those aged 8-14 who influence a large portion of family spending in addition to their own direct spending. By the time they finish their teens, most young people have become so saturated with the messages of consumerism that they are incapable of understanding what their needs and preferences are. They have been formed by the market in the most systematic and effective experiment in brainwashing ever undertaken.
A media company has recently launched a magazine titled Famous targeted at women aged 18 to 34. [OVERHEAD] The publisher has identified the core reader of the magazine as a 24-year old “self-obsessed shopaholic who lives a fast-paced life and whose interests revolve around celebrity, retail therapy and gossip”.15 In other words, a brainless git with disposable income.
Perhaps the most disquieting consequence of modern consumerism is the way it corrupts values. In short, market values have increasingly colonised all other values, so that ethical decisions have become economic decisions, despite a nagging feeling that putting a price on some things actually devalues them. Even the most intimate and precious aspects of being human have been subtly transformed into their antithesis. Becoming a parent used to be something we did because it was part of the human condition; now it is a ‘lifestyle choice’. The consumer approach to parenthood is reinforced by studies such as a recent one by AMP and NATSEM that calculated that the average Australian family is likely to spend about $448,000 (in real terms) raising two children from birth to age 20. This encourages a cost–benefit approach to fertility in which prospective parents ask themselves: ‘How much will it set us back if we have a baby?’ In a half-jocular way we characterised this situation as ‘the beamer or the baby’, but the jocular half disappeared when I saw a magazine ad for a Porsche with the tag line [OVERHEAD]
Porsche’s new baby.
An excellent reason to delay yours.
It is sometimes said that there is nothing new in recent critiques of consumerism. This is quite wrong. In fact, the world of consumer capitalism in which we now live is radically different from all past eras. Never before has consumption activity so dominated daily life; never before has materialism as the path to happiness been so widely accepted; never before have the values of the market penetrated so deeply into areas of social and private life; and never before has the culture been so inter-penetrated with messages of marketing.
[OVERHEAD] I think we may see a reaction against the culture of consumerism. Most Australians believe it is corrupting our values. Public awareness of the cost of consumer lifestyles has given rise to an inner conflict between what we do daily and what we believe is right for us and our society. A large majority of Australians believe that escalating materialism has harmful effects. According to a survey taken in December 2004, 80 per cent agree with the proposition, “Most Australians buy and consume far more than they need: it’s wasteful” and 75 per cent of Australians agreeing with the proposition “Too many Australians are focused on working and making money and not enough on family and community”.
Australians seem particularly troubled about the corrupting effect of materialism on children. Four in five believe strongly that Australia’s materialistic society makes it harder to instil positive values in children. This explains why 86 per cent believe greater limits should be placed on advertising to children. If Australians were able to vote on a referendum o ban advertising to children I have no doubt it would be carried by a large majority.
2 Julian Watford quoted in ‘A Thirst for Prestige”, Vive magazine, October-November 2005, p. 98
3 The Guardian Weekly, February 24-March 2 2006
5 Editorial, Vive magazine, October-November 2005
6 Neil Shoebridge and Rochelle Burbury, ‘White leather gives a pink glow of self-worth’, The Weekend Australian Financial Review, February 19-20, 2006, p. 24
7 Robert Drago, David Black and Mark Wooden, ‘The Persistence of long Work Hours’, Melbourne Institute Working Paper Series, Melbourne Institute, Working Paper No. 12/05
8 Ibid., p. 23
9 Australian Association of National Advertisers, Code for Advertising to Children.
10 Kellog 2004, ‘Tell me more about Coco Pops’, Kellog,
<www.kellogg.com.au/DisplayPage.asp?PageID=483&brandid=5> [11 January 2005].
11 Cited in Sarah Schmidt, ‘Branded babies: marketing turns tots into logo-conscious consumers’, CanWest News Service, 6 May 2003.
12 Cited in ibid.
13 Cheryl Idell, The Nag Factor, report commissioned by Western International Media, Los Angeles, 1998.
14 Cited in Juliet Schor, op. cit., p. 62.
15 Sheena MacLean, ‘Just can’t get enough of that fame’, The Australian, 19 February 2006, p. 19