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Marketing and society: Preface to special section on volunteerism, price assurances, and direct-to-consumer advertising
Journal of Business Research 64 (2011) 59–60
Contents lists available at ScienceDirect
Journal of Business Research
Marketing and society: Preface to special section on volunteerism, price assurances, and direct-to-consumer advertising Easwar S. Iyer a,⁎, C.B. Bhattacharya b a b
Department of Marketing, Isenberg School of Management, University of Massachusetts, Amherst, MA 01003, United States Department of Marketing, School of Management, Boston University, Boston, MA 02215, United States
a r t i c l e
i n f o
Article history: Received 1 July 2009 Received in revised form 1 September 2009 Accepted 1 September 2009 Keywords: Societal welfare Stakeholder welfare Social responsibility Consumption Volunteerism Price Direct advertising
a b s t r a c t We discuss the reasons why this call for papers was issued and describe the process of selecting the three articles presented in this special section. We argue that maximizing stakeholder welfare and not just consumption maybe a new goal for marketing that will be consistent with emerging societal trends. Three articles on volunteerism, price assurances, and direct-to-consumer advertising result from our call and are presented in this section. This introduction is an overview of the three articles. © 2009 Elsevier Inc. All rights reserved.
Almost ten years after Wilkie and Moore's (1999) evaluation of marketing's contribution to society, the call for papers resulting in this special section raises the same issue. Simply put, what is marketing's contribution to society? Is its contribution negative, neutral or positive? Does context moderates marketing's contribution? Marketing enjoys two opposing images in the popular culture: an evil enticing force and a benevolent informational agent. Why marketing has the image of an evil enticing force, one that somehow entices unwary consumers into buying something s/he had no need for in the first place, is easy to see. After all, the logic goes, increasing consumption is the path to increased profits and so marketing's main objective becomes one of increasing consumption. This logic is consistent with the view that gives exclusive importance to shareholder value. Friedman (1970) famously argues that the only social responsibility of a business was to increase its profits. In contrast, marketing's benevolent side has received less attention. Recently, scholars have proposed the concept of “stakeholder marketing” (see, e.g., Bhattacharya and Korschun, 2008) to argue that marketing can be a positive, transformative force in society. Per the stakeholder view, companies recognize that there are multiple entities (e.g., customers, suppliers, employees, regulators, society) that have a stake in the success of a particular business. Rather than maximize consumption, the goal of marketing in this case is to
⁎ Corresponding author. E-mail address: [email protected] (E.S. Iyer). 0148-2963/$ – see front matter © 2009 Elsevier Inc. All rights reserved. doi:10.1016/j.jbusres.2009.10.001
maximize stakeholder welfare which may necessitate promoting responsible (even reduced) consumption and a variety of pro-social and pro-environmental behaviors. There is some evidence now that firms that invest in enhancing the welfare of multiple stakeholder groups may experience “increased cash flow, lower cost of capital, and increased firm value” (Agarwal and Berens, 2009, p. 19). Obviously the choice of such strategies and the manner in which it gets implemented will matter, but overall, it is possible for business and society to have a symbiotic relationship. The three articles in this special section address and elaborate on three specific issues related to stakeholder welfare. In response to the call, numerous manuscripts were received although only three came out of the rigorous review process. Before an overview of these three articles, we thank all the authors who submitted their work and the reviewers who diligently worked in anonymity to help the authors improve the final manuscript. The first article by Basil, Runte, Basil and Usher is “Company Support for Employee Volunteerism: Does Size Matter?” In this article, the authors focus on one of the key stakeholders (i.e., employees). They investigate the extent of support extended by firms to their employees who wished to volunteer for their favorite social causes. It seems that more and more North American businesses—reportedly between 50% and 80%—provide support to employees who volunteer (Brudney and Gazney, 2006) and that offering such support was seen to positively motivate employees (Lindgreen et al., 2008). However, the size of the firm plays a critical role—larger firms tend to have more formal policies and programs in regards to their support for employees
60
E.S. Iyer, C.B. Bhattacharya / Journal of Business Research 64 (2011) 59–60
volunteering. Although greater formalization may boost employee volunteering for preexisting programs, it tends to be inflexible and becomes a barrier in cases that are new or informal. Larger firms also tend to leverage their support for employees in a targeted and strategic manner. Overall therefore, firm size may moderate the positive impact that Agarwal and Berens (2009) document. The second article by Lindsey-Mullkin and Petty is “Marketing Tactics Discouraging Price Search: Deception and Competition.” Lower prices will likely enhance consumer welfare and hence tactics that discourage price search reduce stakeholder welfare. Price shopping is a simple yet effortful way in which a consumer can search for a bargain and save in the process. Knowing fully well the onerous nature of price shopping, many marketers advertise their willingness to match competitor's prices with the hope of locking up that sale. Lindsey-Mullkin and Petty call these bargain assurances (BA), which come in many guises. They identify 12 variations that have been placed in four categories. They analyze the degree of deception present in BAs and its potential to suppress price competition and identify the types of BAs that are more problematic than others. They conclude that the current regulations vacillate between extreme vagueness and excessive detail thus rendering them ineffectual. Conflicting state regulations allow, maybe even encourage, marketers to easily engage in deceptive practices. They close by recommending a thorough review and overhaul of the regulatory policies governing price competition in a manner that increases consumer welfare without being unduly burdensome or confusing for businesses. The third and final article is by Matear and Dacin and is “Issues, Challenges and Implications of Marketing's Impact on Societal Welfare: The Case of Direct to Consumer Advertising of Prescription Drugs.” As of 2006, direct-to-consumer advertising (DTCA) was prevalent only in New Zealand and the United States; thus prior experience is rather limited. In this article, Matear and Dacin's primary task is to identify, define and measure the relevant constructs. The authors also go on to learn if and how this practice
advances societal welfare. They correctly point out that societal welfare is a multidimensional construct that involves, amongst other things, trade-offs between the individual and the collective. This tension is present in many aspects of DTCA but is best seen in its goals. Pharmaceutical companies do not want their ads to be interpreted as devices used to enhance sales; rather they would prefer them to be seen as informational. In other words, they believe that DTCA simply empowers consumers by adding to their knowledge. However, not all stakeholders see it this way. In particular, doctors and physicians—an important stakeholder community—report having to defend their recommendation in response to patients' clamoring for a prescription. This special section examines the interaction between certain marketing practices and stakeholder welfare. These articles raise as many questions as they answer. For instance, should companies allow their employees to volunteer on company time? Should we regulate the different price assurances offered by retailers? And should consumers really know more about the availability of various drugs in the marketplace? The underlying friction between individual and group welfare is the common thread that cuts across all these articles. Obviously this tension exists in other marketing practices as well and we hope that more researchers will address such issues in the future. References Agarwal ManojK, Berens Guido. How corporate social performance influences financial performance: cash flow and cost of capital. Marketing Science Institute Report No. 09-100; 2009. Bhattacharya CB, Korschun Daniel. Stakeholder marketing: beyond the four Ps and the customer. J Public Pol Mark 2008;27(1):113–6 Spring. Brudney JL, Gazney B. Moving ahead or falling behind? Volunteer promotion and data collection. Nonprofit Manag Leadersh 2006;16(3):259–76. Friedman Milton. The social responsibility of business is to increase its profits. The New York Times Magazine, September 13, 1970; 1970. Lindgreen Adam, Swaen Valerie, Johnston Wesley J. Corporate social responsibility: an empirical investigation of U.S. organizations. J Bus Ethics 2008;85:303–23. Wilkie WilliamL, Moore Elizabeth. Marketing's contributions to society. J Mark 1999;63:198–218.
Contents lists available at ScienceDirect
Journal of Business Research
Marketing and society: Preface to special section on volunteerism, price assurances, and direct-to-consumer advertising Easwar S. Iyer a,⁎, C.B. Bhattacharya b a b
Department of Marketing, Isenberg School of Management, University of Massachusetts, Amherst, MA 01003, United States Department of Marketing, School of Management, Boston University, Boston, MA 02215, United States
a r t i c l e
i n f o
Article history: Received 1 July 2009 Received in revised form 1 September 2009 Accepted 1 September 2009 Keywords: Societal welfare Stakeholder welfare Social responsibility Consumption Volunteerism Price Direct advertising
a b s t r a c t We discuss the reasons why this call for papers was issued and describe the process of selecting the three articles presented in this special section. We argue that maximizing stakeholder welfare and not just consumption maybe a new goal for marketing that will be consistent with emerging societal trends. Three articles on volunteerism, price assurances, and direct-to-consumer advertising result from our call and are presented in this section. This introduction is an overview of the three articles. © 2009 Elsevier Inc. All rights reserved.
Almost ten years after Wilkie and Moore's (1999) evaluation of marketing's contribution to society, the call for papers resulting in this special section raises the same issue. Simply put, what is marketing's contribution to society? Is its contribution negative, neutral or positive? Does context moderates marketing's contribution? Marketing enjoys two opposing images in the popular culture: an evil enticing force and a benevolent informational agent. Why marketing has the image of an evil enticing force, one that somehow entices unwary consumers into buying something s/he had no need for in the first place, is easy to see. After all, the logic goes, increasing consumption is the path to increased profits and so marketing's main objective becomes one of increasing consumption. This logic is consistent with the view that gives exclusive importance to shareholder value. Friedman (1970) famously argues that the only social responsibility of a business was to increase its profits. In contrast, marketing's benevolent side has received less attention. Recently, scholars have proposed the concept of “stakeholder marketing” (see, e.g., Bhattacharya and Korschun, 2008) to argue that marketing can be a positive, transformative force in society. Per the stakeholder view, companies recognize that there are multiple entities (e.g., customers, suppliers, employees, regulators, society) that have a stake in the success of a particular business. Rather than maximize consumption, the goal of marketing in this case is to
⁎ Corresponding author. E-mail address: [email protected] (E.S. Iyer). 0148-2963/$ – see front matter © 2009 Elsevier Inc. All rights reserved. doi:10.1016/j.jbusres.2009.10.001
maximize stakeholder welfare which may necessitate promoting responsible (even reduced) consumption and a variety of pro-social and pro-environmental behaviors. There is some evidence now that firms that invest in enhancing the welfare of multiple stakeholder groups may experience “increased cash flow, lower cost of capital, and increased firm value” (Agarwal and Berens, 2009, p. 19). Obviously the choice of such strategies and the manner in which it gets implemented will matter, but overall, it is possible for business and society to have a symbiotic relationship. The three articles in this special section address and elaborate on three specific issues related to stakeholder welfare. In response to the call, numerous manuscripts were received although only three came out of the rigorous review process. Before an overview of these three articles, we thank all the authors who submitted their work and the reviewers who diligently worked in anonymity to help the authors improve the final manuscript. The first article by Basil, Runte, Basil and Usher is “Company Support for Employee Volunteerism: Does Size Matter?” In this article, the authors focus on one of the key stakeholders (i.e., employees). They investigate the extent of support extended by firms to their employees who wished to volunteer for their favorite social causes. It seems that more and more North American businesses—reportedly between 50% and 80%—provide support to employees who volunteer (Brudney and Gazney, 2006) and that offering such support was seen to positively motivate employees (Lindgreen et al., 2008). However, the size of the firm plays a critical role—larger firms tend to have more formal policies and programs in regards to their support for employees
60
E.S. Iyer, C.B. Bhattacharya / Journal of Business Research 64 (2011) 59–60
volunteering. Although greater formalization may boost employee volunteering for preexisting programs, it tends to be inflexible and becomes a barrier in cases that are new or informal. Larger firms also tend to leverage their support for employees in a targeted and strategic manner. Overall therefore, firm size may moderate the positive impact that Agarwal and Berens (2009) document. The second article by Lindsey-Mullkin and Petty is “Marketing Tactics Discouraging Price Search: Deception and Competition.” Lower prices will likely enhance consumer welfare and hence tactics that discourage price search reduce stakeholder welfare. Price shopping is a simple yet effortful way in which a consumer can search for a bargain and save in the process. Knowing fully well the onerous nature of price shopping, many marketers advertise their willingness to match competitor's prices with the hope of locking up that sale. Lindsey-Mullkin and Petty call these bargain assurances (BA), which come in many guises. They identify 12 variations that have been placed in four categories. They analyze the degree of deception present in BAs and its potential to suppress price competition and identify the types of BAs that are more problematic than others. They conclude that the current regulations vacillate between extreme vagueness and excessive detail thus rendering them ineffectual. Conflicting state regulations allow, maybe even encourage, marketers to easily engage in deceptive practices. They close by recommending a thorough review and overhaul of the regulatory policies governing price competition in a manner that increases consumer welfare without being unduly burdensome or confusing for businesses. The third and final article is by Matear and Dacin and is “Issues, Challenges and Implications of Marketing's Impact on Societal Welfare: The Case of Direct to Consumer Advertising of Prescription Drugs.” As of 2006, direct-to-consumer advertising (DTCA) was prevalent only in New Zealand and the United States; thus prior experience is rather limited. In this article, Matear and Dacin's primary task is to identify, define and measure the relevant constructs. The authors also go on to learn if and how this practice
advances societal welfare. They correctly point out that societal welfare is a multidimensional construct that involves, amongst other things, trade-offs between the individual and the collective. This tension is present in many aspects of DTCA but is best seen in its goals. Pharmaceutical companies do not want their ads to be interpreted as devices used to enhance sales; rather they would prefer them to be seen as informational. In other words, they believe that DTCA simply empowers consumers by adding to their knowledge. However, not all stakeholders see it this way. In particular, doctors and physicians—an important stakeholder community—report having to defend their recommendation in response to patients' clamoring for a prescription. This special section examines the interaction between certain marketing practices and stakeholder welfare. These articles raise as many questions as they answer. For instance, should companies allow their employees to volunteer on company time? Should we regulate the different price assurances offered by retailers? And should consumers really know more about the availability of various drugs in the marketplace? The underlying friction between individual and group welfare is the common thread that cuts across all these articles. Obviously this tension exists in other marketing practices as well and we hope that more researchers will address such issues in the future. References Agarwal ManojK, Berens Guido. How corporate social performance influences financial performance: cash flow and cost of capital. Marketing Science Institute Report No. 09-100; 2009. Bhattacharya CB, Korschun Daniel. Stakeholder marketing: beyond the four Ps and the customer. J Public Pol Mark 2008;27(1):113–6 Spring. Brudney JL, Gazney B. Moving ahead or falling behind? Volunteer promotion and data collection. Nonprofit Manag Leadersh 2006;16(3):259–76. Friedman Milton. The social responsibility of business is to increase its profits. The New York Times Magazine, September 13, 1970; 1970. Lindgreen Adam, Swaen Valerie, Johnston Wesley J. Corporate social responsibility: an empirical investigation of U.S. organizations. J Bus Ethics 2008;85:303–23. Wilkie WilliamL, Moore Elizabeth. Marketing's contributions to society. J Mark 1999;63:198–218.