MARKETING IN THE MIDST OF SCARCITY BY DAVID IORNEM

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In a scare commodity market it is not easy to distinguish mediocre from good performers. Career progression is therefore likely to become corrupt as it may not be based on any performance yardsticks. And you can hardly blame anyone since performance yardsticks are as scare as the product itself. This is a source of frustration for professional marketers in a scarce commodity market.

Marketing has become an increasingly important activity within the firm in recent years. This can be ascribed to the realization on the part of managers that the firm’s profits, as indeed its very survival, are inevitably tied to the satisfaction of consumer wants and needs. Peter Drucker has summarized this concept well by saying:

“Until the consumer has derived final utility, there is really no “product”; there are only “raw materials”.  And the “marketing view” looks at the business as directed toward the satisfaction of a customer want and as a purveyor of a customer utility”.

When considered from such a broad perspective, marketing is perhaps a desirable force that should pervade the entire firm. It should enter into the thinking and behavior of all decision-makers regardless of their level within the organization and their functional areas.

Theodore Levitt has said that when this is not the case “the company will be merely a series of pigeon-holed parts, with no consolidating sense of purpose or direction”. When this thinking pervades the organization, such organization is said to be adopting the marketing concept.

Despite the obvious logic of the marketing concept, it is relatively a new idea even in advanced market economies. In less developed market economies it is often easy to be tempted to regard this simple economic logic as illogical. And you cannot blame those who fall into the trap because what is the logic for advertising a product that people cannot always find to buy?

We always hear the question: why advertise Star and Gulder when you cannot produce enough to meet demand? Is it not a waste of money?

Advertising a scare commodity is difficult to explain, but it is certainly not a waste of money. To understand why we should advertise in the midst of scarcity, we have to ask ourselves the question: What is the purpose of advertising?

In Nigerian Breweries Limited, as in any progressive marketing company, the purposes of advertising are many. Increasing sales is normally an important consideration whether it is in the short or long term. But normally, increasing sales is only one of a myriad of reasons why a firm may advertise. If increasing sales were always the only reason, then of course a firm marketing hard-to-come-by commodities would be right to discard advertising at the soonest opportunity.

Let us take a look at some of the reasons why a mass consumer marketer might want to advertise:

  1. Remind consumers to always ask for the brand.
  2. Introduce a new brand.
  3. Assure or re-assure consumers that they are making the right choice.
  4. Increase sales.
  5. Create, maintain and extend a corporate image.
  6. Create awareness of the brand.
  7. Encourage switching to advertiser’s brand.
  8. Development of consumer loyalty.
  9. Expand total market for the product class.
  10. Persuade middlemen to stock the brand.

A close look at the above possible advertising objectives reveals that there are many reasons other than immediate sales stimulation for advertising a brand.

Some governments have insisted that breweries owned by them should sell only to party supporters. Unless the marketing man working in such a milieu has resigned his profession to be a career politician, the environment does not make for utilization of professional techniques in channel management. It also raises the question of ethics in marketing practice.

Many of these reasons hold whether or not the product is available at the material time a user, consumer or stockiest is exposed to the brand’s advertising.

It may well be argued that the strong preference shown for particular brands of commodities (in preference to competitive brands) could well be the result of previous marketing effort.

This marketing effort has ensured or given birth to successful products. It would therefore be illogical to discontinue such effort.

Whether a product is always available to the consumer or not, you want it to cut a particular image in the eyes of consumers. It is also desirable to ensure that consumers choose your own brand in preference to others whenever it is available.

Another concept similar to product image is product positioning. Whether your product is freely available or not you need to position it. All soaps are not the same in the eyes of consumers. If that were the case it would make no sense for Lever Brothers Nigeria Limited to produce soaps of the same price range such as Rexona and Lux.

Each brand has its peculiar appeal to its particular consumers. Therefore, although a marketer may not come out to say in plain language, his promotion of a brand partly seeks to demonstrate to consumers and prospects alike that this product is for “your kind of people”.

All these can be achieved only through a minimum level of expenditure on promotions. A good technical product, though necessary for consumer acceptance of any brand, is a mere beginning.

No marketing man worth his salt can say that he likes to work in an environment where his products are scare. When the demand is in excess of production, there is the tendency to look at marketing people as mere parasites on the organization.

This thinking may well pervade the whole organization including top management. This line of thinking can affect the chances of the marketing man continuing his career. At the best, he can only be sure of his job and be satisfied with modest career progression. There is actually no way in which he can demonstrate unusual competence to merit promotions. They say the product is selling itself.

In a scare commodity market it is not easy to distinguish mediocres from good performers. Career progression is therefore likely to become corrupt as it may not be based on any performance yardsticks. And you can hardly blame anyone since performance yardsticks are as scare as the product itself. This is a source of frustration for professional marketers in a scarce commodity market.

As our society is corrupt, shady practices quickly entrench themselves in marketing organization that are involved in marketing scarce commodity will have to find its way of dealing with this problem.

First level managers of scarce commodity markets have not done credit to themselves either. Channel members are often victimized for one reason or another. Managers become soldier-salesmen, issuing threats and commands.

In Nigerian Breweries Limited, allocation has been introduced by top management as a way of avoiding abuse of sales procedures as well as ensuring wide trade and geographical distribution of the company’s brands.

In a scarce commodity market, especially for mass consumable lines, the risk of damaging the image of the organization in the way the sales force interacts with the general public is quite high. To ensure that this does not happen, image conscious organisations get their top management deeply involved in the day-to-day management of the sales force.

This has resulted, in many cases, in excessive bureaucratization of operations which is also another source of frustration for professionals. There is very little room for initiative in the way a manager or a salesman performs his duties.

Those who think that marketing men like to work in this kind of milieu are grossly mistaken.

Another problem area in marketing scarce commodities is channel control. Channel management is merely an academic concept in scarce commodity markets.

The concept of channel management hinges on issues such as price maintenance, channel selection and appointment, channel control and channel motivation.

The brewery industry now has several government owned breweries and many more are on their way. In both the private and public owned breweries, the marketing of beer is being politicized to a ridiculous extent.

Even in private firms, because a product becomes scarce, appointing someone a distributor becomes such a favour that a society like ours has been corrupted up to the hilt. Thus where a manager’s superior has vested interest in a channel member, such a manager is playing with a hot potato when it comes to disciplining that channel member or using (no matter how legitimate) control measures to check unhealthy business practices of that channel member.

Some governments have insisted that breweries owned by them should sell only to party supporters.

Unless the marketing man working in such a milieu has resigned his profession to be a career politician, the environment does not make for utilization of professional techniques in channel management. It also raises the question of ethics in marketing practice.

A story is told of a marketing man who, in the performance of his duties, suspended a customer whose cheque was returned unpaid with the remark “represent”. Six months later that company. The chairman immediately suspended the manager and recommended that his appointment be terminated on a charge that his appointment had been made irregularly. In this particular case the marketing man regained his job. But not many will be that lucky.

The point worth making is that where channel members (or distributors as they are more commonly known) are so powerful because of their political leanings, channel control needs super diplomats to survive as marketing men.

Even in private firms, because a product becomes scarce, appointing someone a distributor becomes such a favour that a society like ours has been corrupted up to the hilt. Thus where a manager’s superior has vested interest in a channel member, such a manager is playing with a hot potato when it comes to disciplining that channel member or using (no matter how legitimate) control measures to check unhealthy business practices of that channel member.

First level managers of scarce commodity markets have not done credit to themselves either. Channel members are often victimized for one reason or another. Managers become soldier-salesmen, issuing threats and commands. The environment is full of dilemmas and frustrations. These are the perils of marketing scarce commodities. These perils are not man-made. They are economic laws in practice.

Advertising a scare commodity is difficult to explain, but it is certainly not a waste of money. To understand why we should advertise in the midst of scarcity, we have to ask ourselves the question: What is the purpose of advertising?

Reference

Iornem, D. (1981). Marketing in the Midst of Scarcity. Management in Nigeria, Journal of Nigerian Institute of Management, 1981.

-Also available at https://commonwealthuniversityblog.com/2016/08/30/marketing-in-the-midst-of-scarcity-by-david-iornem/

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