Marketing MADNESS 3 • Corporate manipulation or persuasion?
My boyfriend Dennis, showed me this video recently. It is about the glasses business in America. Apparently, there is a corporation, Luxottica, that produces and owns 80% brands of glasses, which is almost a monopoly. The point of the video was that whether if you buy a pair of glasses of $60 or $600 they are the same, because 70% of the brands comes from the exact same factory and thus the company has the bargaining power to apply a higher margin on the glasses.
The video is made in the most subjective way in the view of the consumer's demand and supply.
Dennis and I argued about this video and I thought it would be very interesting to share this with you.
He finds that it is very unfair towards consumers from a business perspective to charge $600 for just a pair of glasses:
"I'm just saying, from a moral point of view, it shouldn't be like that. But we don't live in a perfect world like that so nothing we can do."
However, I am arguing that this is not corporate manipulation, but marketing persuasion.
"Persuasion is one thing - manipulation is another" (Hatch and Schultz, 2008)"
Branding is concept that exists for many centuries. The early use of brands was for administrative function, such as ownership and it has an important competitive advantage during the industrial revolution. Today, branding is about creating an identity with symbolic value that differentiaties with other brands to sustain competitive advantage. Therefore, it is impossible to imagine consumption without branding in this current world. Consumers want choices and companies need to be continuously innovating in order to survive. Consumers are also getting more picky as they want more value for money. Hence, there are so many different choices for consumers to choose from: from low, to mid to high budget and luxury. It gives consumers the freedom to go for the cheap $20 pair of glasses or $600 branded.
However, it is not that simple just buying cheap or expensive glassses. Like I said before, it is about the symbolic meaning. It is the individual, who adds these meanings to the glasses which are very personal. Dennis for example, never wears glasses so he would never put $600 for a pair. But he would pay few hundreds on computer things. On the other hands, I do wear glasses and yes I have been wearing $15 glasses, but they had to be replaced every three months because of the quality. Now, I am wearing one of £200, but in my opinion it is worth is because of the quality that makes the glasses more long lasting. They are also vintage, so I add the symbolic meaning of "hipster" to the glasses, which partly expresses how I would like to be.
Moreover, I also disagree that this is corporate manipulation, because even though the company owns like 80% of the business, consumers could also choose the less expensive option isn't? After all, it is the willingness that consumers like to pay for a pair of glasses and as a result, consumers are happy. And that is what the mission is of companies: satisfy consumers. Make them happy. And if they are happy, the companies are happy. So therefore, the market is influenced by supply (companies) and demand (consumers) and many other factors.
While I do agree with Dennis that majority of companies are too capital focused, there are several that try to give back to the community as well. Companies invest in sustainability, recycling, supporting charities, Fair-Trade that contributes to Corporate Social Responsibility (CSR). Perhaps CSR is something I can talk about in my next Marketing MADNESS?
Anyhow, what do you think of this video and its discussion?
Quote: Hatch, M.J. and Schultz, M. (2008) Taking Brand Initiative. San Francisco: Jossey- Bass