Consumerism is a Western society ideology in which there exists a social and economic structure where customers are encouraged to purchase goods and services regardless of their need for them. Manipulative marketing was used by companies to sell goods to customers who had increasing wages and therefore more disposable income. This essay will discuss the role of consumers in marketing, define what consumerism is as well as the changes to consumerism over history, how the role of consumers has evolved (the shift in power over time), and the impact on marketing (relationship between marketing and consumers). The essay will attempt to explain and define these directly.
Consumerism
Consumerism is a way of understanding the economy, Consumerism is the idea that increasing the consumption of goods and services purchased in the market is always a desirable goal and that a person’s well-being and happiness depend fundamentally on obtaining consumer goods and material possessions. (Hayes, 2021) In terms of economics, it is a major goal to increase consumerism and the purchase of goods as it is the driving force of the economy, and therefore government actions and policies can be used to help boost consumption in society. An example of this is tax cuts allowing for more disposal income in households which leads to increased consumption and therefore greater economic benefit. Consumerism therefore is essentially the steady flow of products and services to consumers who may or may not need them, through marketing and creating a demand for the products. Consumption came to play an increasingly important role in people’s everyday lives. People were not only offered what they needed but also what they desired (Miles, 1998). This rise in consumption by customers led to an increase in production and therefore provided more jobs for workers and led to an increase in wealth for business owners. Consumerism is therefore an important component of the theory of supply and demand and to grasp consumerism fully you must know its development throughout history. In the 15-18th century the ‘age of exploration’ as Europe was being discovered so were vast amounts of raw materials these materials were used in factories to create many consumer goods and led to widespread consumerism, as well as the introduction of the slave trade where large amounts of goods were produced for low cost and then sold the gain large profits. The profits created from the slave trade and East India Company were reinvested into further infrastructure within cities and led to an Industrial era coming to fruition. The importation of large quantities of sugar and the closely related beverage commodities, cocoa, coffee, and tea, in the early-modern era, had a decisive role in changing not only the patterns but also the organization and meaning of consumption in Europe. (Inikori, 1992) Consumerism boomed after the Industrial Revolution, before the large factories existed goods were made in homes on a small scale which meant the goods were unique and higher in value. However, when the introduction of large factories in cities began it led to mass overproduction and to large varieties of cheap goods being produced for consumers to buy. This created a consumerist market being formed and society moved towards a more consumeristic stance. The transformation in the mode of work, in the organization of society more broadly (institutional, regional, rural, and urban, etc.), in the family – all have to be considered in locating and structuring the role of the changing mode of consumption (Fine, 1990)
Modern Consumerism
The 20th century also led to a further rise in consumerism as the introduction of new marketing strategies and new technology allowed companies to market to a greater audience. The use of TV advertising and marketing campaigns led to a consumer culture where status and quality of living were linked to consumption. This meant a massive boost in consumption rates. In recent times the use of ‘Outsourcing’ work in factories to other countries an example of this citing (Tempest, 1996) is the production of the Barbie doll where Mattel gets raw materials i.e., plastic and hair from Taiwan and Japan, assembles the doll in Malaysia and buys the dolls clothing in China. This helps achieve lower production costs and therefore reduce the price of a cost to increase sales. By strategically outsourcing a firm’s activities and only focusing on the company’s core values managers can leverage their firms’ skills and resources for increased competitiveness (Quinn, 1994). However, the rise of modern consumerism has led to increased concerns from the public such as the effect on children and consumerism in which many experts questioned the desirability of introducing children to consumerism too early (Peil, 2009) as well as concerns in the West of tainted goods sent from foreign countries. These concerns led to much political unrest.
Role of consumers
Consumers hold a critical role in the economy by providing money for goods purchased, but they can also help drive the market by influencing others to buy products whether that’s family, friends, or colleagues as personal experience with a product can hold more weight in a decision than any form of marketing. The decision-making process of a consumer means that companies have to work to influence consumers, which is in stark contrast to the traditional market where a consumer had limited choice and therefore purchased the lowest-costing good. When commoditization begins to be a threat to suppliers, they can reduce the threat by increasing the difference in price between themselves and competitors. (Waterson, 2003) Customers also hold an important role in improving companies, giving feedback allows businesses to make improvements to their strategies for finding and maintaining customers. Consumer behavior is based on many factors including how a consumer acts individually or in a group, how a consumer feels before and after a purchase, and when a customer decides to make a purchase. These all directly affect the marketing strategies of companies because the greater knowledge of Consumer behavior the more effective a business will be. Many consumers are skeptical or suspicious about the functional mechanisms of electronic commerce, its untransparent processes and effects, and the quality of many products that are offered online. (Grabner-Kraeuter, 2002)
Shift in power
There has been a shift in power from traditional consumerism to modern 21st-century consumerism, the power has moved from being in the market’s hands to the consumer having power in the market. Global markets have undergone an unprecedented transformation over the past several decades. Political reforms have expanded consumer choices, fueled the growth of the middle class around the globe, and created massive wealth. The digital revolution has empowered these same consumers, through access to information and to one another-anywhere, anytime. (Carpenter, 2013) This has occurred due to many factors within the markets such as the use of new technology an example is digital aid to compare prices within markets leading to more price transparency from companies as well as the increasing number of markets meaning more consumer choice. This has impacted marketing drastically as you can see a change from passive consumers in an active market to empowered consumers across multiple markets, as well as consumers being able to have a wider choice of products. The technology change has meant a change from mass media marketing of pre-fabricated goods at a fixed price to internet and online media retail environments leading to customers deciding on even engaging with the companies. While communication rules change, the field and definition of marketing change too. With the development of IT technologies, traditional marketing methods leave sits place to digital day by day. Companies that follow technology can easily communicate with customers interactively while providing products or services. (Durmaz, 2016) This has led to companies having to recognize customers as individuals and tailor them to their unique personalities and viewpoints. This means companies must market certain messages to certain individuals to influence decisions, which has led to the use of new marketing strategies such as the use of social media and celebrities to increase sales.