Marketing can be defined as “a set of institutions or processes for creating, communicating, and delivering offers that have value for customers.” In the modern capitalist landscape, value is abound. Just turn on the radio or television, or swipe through a series of Youtube clips. Everyone is vying for your attention, and ultimately, your money. Methods can range from sandwich board signs next to your local thoroughfare, all the way up to advanced artificial intelligence-driven algorithms that scan every metric of your consumer behaviour, compiling the information needed to purvey targeted advertising to the end user.
The Power of Branding
It is the reason why Mercedes Benz can sell you a $65,000.00 luxury sedan and have it depreciate 46% after only 5 years, leaving you saddled with recurring repair bills as the technology underlying the vehicle is overengineered and teeming with proprietary systems that only certified Mercedes Benz techs can work on. This is a system that keeps the money spigots churning, and a model reproduced among every car manufacturer and many other companies offering completely different products or services. Sure, their vehicles (Mercedes Benz) carry a prestigious badge connoting elegance and sophistication. And yes, these cars ride like a dream and are packed with very useful technology. The premium is paid, however, on the badging.
In modern logistics, constituent parts of any product are usually sourced with cost-effectiveness in mind by businesses. This means a product seemingly manufactured in the country you live in (a so-called domestic brand), can actually be designed, sourced, and partially built somewhere else entirely. Or multiple locations. The goal is to maximize the profit margin by keeping costs low. Wrap it up in silk and throw a badge on it and—walla—you have a formulaic pill consumers can swallow agreeably.
Think about what a car actual does utility-wise. It sits out in dreary parking lots, subject to door dings and even break-in attempts or disgruntled passers-by with a predisposition for keying paint jobs. It hits innumerable potholes and wayward rocks flung up by fellow travelers. They spend extended periods of time baking in the sun or being iced over by the harsh elements. Drive a luxury vehicle or one that has more than 4 cylinders, and it is likely you are paying a premium at the gas station and the insurance company. Compounding all this is the fact that modern vehicles are built with planned obsolescence in mind (you can’t produce a product that a consumer will only need to buy once). Vehicles may inspire envy in your neighbors, or preconceived notions in the officer wielding a radar gun laser at your front bumper on the highway.
Buyer Psychology
Despite all of the apparent pitfalls with owning a high-dollar vehicle, consumers line up en masse to purchase them. Whether it is for the perceived esteem they garner or the image it conveys about the consumer, expensive and impractical vehicles will sell if backed by a well-known and reputable brand. This is simply because the marketing machine has implanted notions in our heads so effectively, and in the heads of the people around you (neighbors, co-workers, strangers), that if the idea is considered valid by most people, the ploy carries some semblance of validity. I think, he thinks, and she thinks—therefore I am. Groupthink at its best.
This is the psychological power companies and their multi-billion-dollar brands hold over our society. They not only tell us what to wear and drive, but literally how to think about others. That is an immensely powerful tool that derives its lessons from the cut-throat world of politics. How do you make something or someone likeable? Appeal to their base desires and instincts. In Maslov’s hierarchy of needs, it runs from basic physiological requirements like food and shelter, all the way up to self-actualization.
In terms of the modern consumer, however, “self-actualization” becomes corporate/societal self-actualization. You become what your society deems valuable, and this engenders inflated feelings of self-worth. No different than how a young medical school resident feels after they finish 7-10 years of schooling. Even despite spending a decade or more learning regurgitated material, they will likely have no hand in advancing their field by any noteworthy degree. Harsh words, but it’s true. Give a homeless person a medical textbook and have them practice surgery. An exercise in stupidity, you say? But why? Why is that form of learning any different? Is a human being not capable of learning outside a traditional classroom? It’s all about psychology and how society, and thus corporatism, controls perceptions.
A tale of hole-ridden jeans.
I for one champion free market economic thought and believe capitalism has connected the world in ways that governments would never even dream of. So, corporate branding and psychological marketing is not inherently a bad thing, per se. It becomes harmful when rationality is replaced by feelings and thoughts. When emotion takes precedence over logic. To offer a personal anecdote: an individual in my family has grown enamoured by jeans with embroidered holes in them. Nevermind that they are glaringly insufficient perform the basic function of clothing, which is, to cover our body parts up to protect from the elements and prying eyes. They are purposely made with holes in them as part of a fashion trend. The only problem is that once you put them in the washer and dryer repeatedly, and trash them as adolescence would require, you wind up with a denim disaster that is no longer useable and are forced to condemn them to the dustbin. In some cases you may be able to “customize” the item by creating shorts. In this example, you can see how a company uses the perception of “trendiness” to build a product with a very short life expectancy, allowing for repeated sales.
What this means for the average consumer is that they are being preyed upon incessantly by a marketing machine so ingrained in our everyday lives that we sometimes barely notice it, or which has grown so normalized that we don’t know any better. The financial decisions we make, from buying our first home to sending our kids off to prestigious colleges, are things we are taught we ought to do. If you follow the money, you know that mortgages are securitized into large pools and sold for a premium as stable investments. Your kid’s college education? Same thing in terms of securitization.
U.S. student debt alone has ballooned to over $1 trillion, with many forecasted to default. You see, almost every pivotal decision we make in life has an element where someone, some company, or the government takes money from you.
Be rational and think for yourself.
Financial education is not only about dollars and cents, it is really about the freedom to think as a rational observer in a world that bends and molds the reality around you. I’m not talking about The Matrix here, but rather a sophisticated apparatus whose tentacles are creeping deeper into our lives. Information is now more valuable as a commodity than oil because companies want to know about you, and rather intimately. Be careful out there.
