According to Webster's Collegiate, 10th ed. (1994), marketing consists of promotion, sales, & distribution, and promotion in turn consists of advertising, publicity, & discounting. These days, however, it seems that "marketing" is often used as a euphemism for promotion. I welcome the recognition that promotion is the kind of thing that needs a euphemism, but for that very reason I prefer to call it by the name by which it has long been known & despised. It is my belief that promotion has always been mostly a racket --- economically parasitic and morally undignified --- and that with the advent of the Internet even the small economic justification it once had has vanished. Several hundred thousand Americans busy themselves with it, and they contribute about as much to the orderly operation of the economy as so many pickpockets would.
1. Advertising
Economists solemnly explain to us that the function of advertising is to inform buyers of what is available. Some advertising (such as the classifieds) does serve that purpose, but clearly it is only a tiny fraction. Pick an advertisement at random, and you are almost sure to find that its main purpose is to distract buyers from their business and offer bad reasons for buying something.
Point-of-sale advertising is particularly obtrusive in that respect. Evidently it is insisted on by suppliers. I believe that the pressure to turn one's store into a battleground between suppliers is as at least as annoying to storekeepers as it is to their razzle-dazzled customers. It is hard to research such things, but I happened on a wonderful article in the New Yorker (22 June 1992, pp. 90--104) describing what it is like to run a supermarket --- more precisely, what it was like to run the last independent one in Queens three decades ago:
As Costa was going down the stairs, a man named Don Vitale was coming up. Don Vitale is the Mazola man.... Vitale is a strapping fellow, and he was wearing a loose raincoat. He and his coat seemed to take up most of the office.... Taking his files out of his briefcase, he knocked a chair backward.
As he picked up the chair, he said, "Herb, we've got a Mazola promotion to the Hispanic market. We've got these ballot boxes, and you put them with an aisle display, and we're giving away bicycles and twenty-five-dollar grocery coupons and whatever. It's a tie-in with the Spanish television show that Mazola helps sponsor, called 'Sábado Gigante.'"
"This thing was dreadful last time you did it," Herb said, and he began riffling through papers on his desk.
Vitale said, "The show is a huge hit, Herb. The girls on the show are models, or whatever, and they're incredibly popular. They're cute girls." He paused and looked at Herb for a reaction. Herb had turned slightly away from him....
Vitale tried again, adding, "Herb, the girls are appearing at some of the stores in combination with the promotion."
"I used to do this sort of thing more often," Herb said, mostly to himself. "We used to give away samples of new products and so forth. Maybe we should start it again, although I'm inclined to think that good service matters to people more than this sort of hoopla."
Vitale said, "Herb, this has been a major success in other places. The girls were just in a store on Roosevelt, and it was a mob scene."
Without looking up, Herb said, "That's why you'll never see them here."
I suppose these days a store manager is a mere hireling and such things are arranged on a high level.
There is a computer store in Cambridge, MA, at which I have spent a good deal of money over the years. The staff are accessible, knowledgeable, and polite. The place even has restrooms. (Perhaps the company can get away with giving good service because it is privately owned.) For a long time, every once in a while it mailed me a newspaper-size catalog of products for sale. It consisted mainly of tiny advertisements for computers and their parts, containing tiny pictures of them. I was not actually displeased to receive this curious publication; it happened to be precisely the size to cover my bathroom sink while I trimmed my beard. But I did wonder what the people who put the thing out thought they were doing. Surely, people who need laptops or motherboards have orderly ways of finding what they are looking for and are not likely to be enticed by grubby, indistinguishable little pictures. Yet, a profit-making, socially useful enterprise evidently had to hire people to bombard its customers (who are all, I dare say, on the Internet) with big sheets of paper. Probably it was a racket of some kind. However, it has stopped, so maybe some people actually thought about it.
A far worse piece of trash of that kind used to be mailed to me by a respectable newspaper that I did not subscribe to at the time (by now, I have a subscription on the Web). It consisted of a loose bundle of advertisements of various sizes, each of them hideous. I had to paw thru it before throwing it away to make sure it had not swallowed any actual mail. With some effort I managed to extract an address from it and sent a letter (a polite one, much as that pained me) asking to be unsubscribed if possible. It worked.
Most of my snailmail is still unsolicited trash, much of it decorated with silly & insulting attempts to trick me into opening it. A good deal also comes from causes to which I have given money, some of which they choose to spend asking me to give more. I dare say that they have survey data (provided by the promotion industry) showing that this petty harassment brings in more than it costs. It generates about half my wastepaper, but at any rate it is not much trouble to recycle.
I do subscribe to some paper magazines, so I'll have something to read on the train & in the park. (The Internet does not reach me there, because I am too twitchy to manage a touchscreen interface.) The New York Review of Books, to which I have subscribed for more than 50 years, is on the whole a model of courtesy to the reader (except that the gutter is too narrow). There are no jumps. The advertising, as you would expect, is largely for books. I am not in the market for books (my apartment is already overstuffed with them), but I browse in it to get an idea of what people are publishing these days. However, I am somewhat deterred from doing so because it consists largely of full pages interrupting the articles. What is the point of that? I am very much less likely to stop & browse in the middle of a sentence than if the ads were collected between the articles or even at the back of the magazine. Also, every issue contains two advertisements --- one loose, and one stuck in the gutter --- inviting me to subscribe or to give someone a subscription. I already subscribe, as the New York Review well knows, and if I wanted to make a present (as I have done once or twice), I could make it much more easily on the Web. My defense against this silly harassment is to leaf thru each magazine when it comes in the mail and remove the trash while previewing the contents. That way the trash ends up in the recycling bin and not on the floor of the bus.
I used to subscribe to the New Yorker, which had interesting factual articles and pleasant cartoons & squibs briefly quoting absurdities, but whose advertisements sometimes made me ashamed of the company I was keeping. How, I always wondered, could people intelligent enough to read the articles be induced to buy such stuff? (One self-satirizing example amused my family when I was little: a sterling silver soap dish, so many thousand dollars, "soap not included".) I conscientiously rejected one vile guess: The husbands did the reading and the wives the buying. But I did treat myself to an acronym (a wicked counterpart to TANSTAAFL) that compromised my libertarian principles: IYCATYTATL (pronounced "I Katy tattle"), meaning "If you can afford this, your taxes are too low".
Incoming calls on my landline phone are almost all noise. Most of them are blocked, but some make it as far as my answering machine, and for some reason I have to listen to my outgoing message when that happens.
I never watch TV or listen to the radio any more, so I no longer have to endure "a word from our sponsor". Instead, there is the Internet.
Most of my e-mail is legitimate (if one charitably includes the "send us more money" kind). AOL does a fair job of filtering out spam, tho it sometimes overdoes it, so I routinely check the spam page. I receive remarkably little (maybe the powers of the world have arrived at a consensus that I am not worth swindling), and some of the spam is so bizarre as to be entertaining; for a while I was regularly offered, in Russian, the opportunity to invest in car dealerships & real estate in Moscow. Whether the spam in Arabic & Chinese might be equally amusing, I cannot say.
Then there is the Web, on which a battle is going on that I do not at all understand. I use a popular adblocker. A few sites positively will not let me read them if I do not turn it off; I can do without them, and they can do without me. Many, however, let me in after berating me for lowering their income. I have tried to find out the economics of that (even looking up standard contracts), but with no success. Who, if anyone, is worse off if the people who do not want to see ads do not see them? If the producers of the site itself lose money on that account, it must be that they are paid according to the number of viewers who see the ad --- a scheme that must be written into the contract with the advertiser. Why? The advertisers presumably want clicks on their ads, so why don't they set up to pay just for those clicks? What good does it do them to impose their ads on people who do not want them? Perhaps they have a theory that some of those people are nevertheless prospects --- or at any rate, it does no harm to have at them. My own suspicion is that advertisers --- or, more particularly, the advertising agencies --- are composed of bad people who grind their teeth at the thought of being deprived of the opportunity to make nuisances of themselves.
That is the kind of thing I like to think, in flagrant violation of Hanlon's razor. (I applaud the charitable impulse behind that aphorism, but I fear it expresses a false dichotomy. Some kinds of stupidity are cultivated because that are helpful in being mean.)
2. Discounting
Quantity discounts make economic sense to the extent that they reflect economies of scale and induce buyers to share the cost of inventory maintenance with sellers. (I don't see them much any more, but one used to see signs saying "10¢ each, 3 for a quarter" or the like.) Introductory discounts make sense in that they might induce customers to try a new product. But most of the discounts that ordinary people encounter are mere distraction:
"x% off" or "x¢ off", without specifying off what, or referring to a price that may easily have been inflated for the purpose.
"x for the price of y", "buy y, get x--y free", etc. These, along with the prevalence of prices ending in 9, amount to ritual attempts to obscure the actual unit price. They are also insulting in their silliness. (I once actually saw a sealed bag of spinach that claimed "The top 30% of this bag is free!".) If I came to a store in the hope of getting something for nothing, I would not be a customer; I would be a shoplifter, and I would need no enticement. It is bad manners to initiate a transaction by insinuating the hope that your interlocutor is a fool, even if the hope is sometimes justified. Perhaps, instead of being irritated, I am supposed to take pleasure in congratulating myself for detecting the swindle --- a mean invitation.
"Rebate". I haven't seen this recently, but you used to be offered some of your money back if you filled out a form (requiring microscopic handwriting) and mailed it somewhere. The wages for that kind of work must be pretty low.
Coupons. People clip these from advertisements and turn them in when they buy something. They aren't worth much, but compulsive people cannot bear to ignore them, and poor people cannot afford to. They add to the time it takes to check out. The rules for their use are necessarily complicated (clever swindlers have discovered uses for them) and sometimes lead to disputes that have to be settled while other customers stand in line.
Store discount cards. My supermarket wants to give me one. Every item in the store has to be price-tagged with & without the card, and the checkout person has to ask me if I have one. I suppose the idea is that having the card makes me more likely to choose that store. Possibly, however, it is conceived as a crude form of price discrimination: People who cannot be bothered with it must on average have more money than people who can. Oddly, the checkout people have the power to defeat this scheme; they can, and often do, resort to a card that they are provided with. How do I deserve that favor? Maybe I am cute, or look poor.
3. What are the real economics of all this?
As Norbert Wiener observed in the introduction to Cybernetics (1948),
...taking the second [industrial] revolution as accomplished, the average human being of mediocre attainments or less has nothing to sell that is worth anyone's money to buy.
The answer, of course, is to have a society based on human values other than buying or selling.
We are now well into that revolution, and the "answer" we have arrived at so far is a multiplication of rackets of all kinds. Indeed, labeling particular businesses as rackets misses the point. Every business supports some percentage of parasitical activity. For promotion (and fashion), it is IMO pretty near 100%, but for many valuable occupations (medicine, law, law enforcement, insurance, etc.) it is substantially more than 0. There may be no remedy for that, but the Internet might afford some partial remedies, especially if we eventually established a guaranteed income, so that those involved would no longer be dependent on being pests and might defend their rackets less stoutly.
The Internet multiplies our opportunities to be useful to each other without the intermediation of the government or the market. So far this ability has been exploited to a considerable extent in gaming, online interest groups, etc., but nowhere near its potentiality. It would be pleasant to imagine the Web taking the place of large swatches of the money economy and most people learning to be useful to each other for fun. But the world seems not to be going that way. When I joined Facebook, for instance, it was a way for friends (actual friends) to keep up with each other. It still serves that purpose for me, but only after I have paged thru vast numbers of links to commercial or propaganda sites that have found favor with my friends (actual friends). I gather from the Web that most people consider Facebook their chief source of news. I get my news from Google News (free), the Boston Globe (I subscribe), and the New York Times (I subscribe). When I go to FB I want to read that someone I used to be fond of has gotten hired, or fired, or sick, or well, or laid.
One industry that might largely vanish if people had more sense is entertainment, including sports. Most people these days are addicted to commercial entertainment, and many would be ashamed to enjoy anything less flashy. But it is a great evil that attention, which is an inborn mammalian need that anyone can satisfy, has become concentrated on a few professionals. There is no actual virtue in being *competently* entertained. Off with its head! Lower your standards, and you can be just as well entertained by hospitality & conviviality, with an occasional circus for spice. The Internet vastly expands the range of opportunities for doing so.
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