Faculty Working Papers SOCIAL MARKETING IN THE GHETTO Alan R. Andrea sen #241 College of Commerce and Business Administration University of Illinois at Urbana-Champaign FACULTY WORKING PAPERS College of Commerce and Business Administration University of Illinois at Urbana-Champaign April 3, 1975 SOCIAL MARKETING IN THE GHETTO Alan R. Andrea 8 en #241 Paper to be presented to First International Social Marketing Congress, Brussels, Belgium, June 6, 1975 • ' • -l SOCIAL MARKETING IN THE GHETTO Alan R. Andre asen Professor of Business Administration University of Illinois In recent discussions of ''social marketing' 1 in the United States, two distinct definitions of the concept, have emerged. The first, most closely identified with Philip Kotler is that social marketing is the application of marketing tools to social issues.*" This definition aligns the concept with the broader development of marketing applications in a o wide range of non-profit settings. An alternative definition often •a found in the work of William Lazer J is that social marketing is the evaluation of marketing's impact on society in its traditional non-profit business environment. It is not the purpose of this paper to debate the "correctness" of either definition but to suggest that there are clearly instances in which the two definitions intersect. One of those intersections is the concern of this paper. Marke ting in the Ghetto For several years, I and a of scholars in tfc i States have been concernea with a p .ng systems. This problem is that, despite ext 3 Lag affluence st sectors of the U. S. economy, there remain sij Leant numbers of consum who by virtue of their low income, old age and/or minority racial status systemically obtain much less value in the urban market place foi their consumer dollars than the rest of our society. Beginning with David Caplovitz's provocatively titled book The Poor Pay More published in -l963, a broad array of studies have demonstrated that at least in the United States those whom I have chosen to call "the disadvantaged Digitized by the Internet Archive in 2012 with funding from University of Illinois Urbana-Champaign http://www.archive.org/details/socialmarketingi241andr consumers" regularly pay higher prices for the same merchandl purchased by the non-dis advantaged," -my higher credit rates and are more often charged credit extras, " more c ire c into "buying items they don't, need or merchandise more expensive than they can afford," and find that the results of this market involvement all too often lead thee, to the courts and to bankruptcy. As I have theorized elsewhere," the sources of these difficulties are threefold as suggested in Figure 1: 1. First, the socio-economic characteristics and attitudes he disadvantaged are themselves a major source of difficulty. The dis- advantaged have low arid unstable incomes which means they must see higher cost credit sources and can less often buy items in lai sizes or when they are on sale. The disadvantaged are often members of racial minorities which means that even if they are not poor they must live in ghetto areas where, as noted below, the market is competitively weak, It means they will be discriminated against or feel they will be discriminated against and this wil3 t 'strict their market all And, of course, man;, of the are elderly and re often physically and n Lnhibi :ope. Finally, all of these socio-economic characteristics are associated with and values such as a sense of powerlessness, a lack or faith in government institutions that further immobilize the disadvantaged. Figure 1 about here 2. Second, as noted above, the disadvantaged typically live in poor areas where the marketplace is excessively atomistic: overstored, under- capitalized, and poorly managed. This, in turn, means that costs of operation are higher, stores smaller, ass< nts dr physical and economic pli it. nt extev movement of the affluent t : suburbs a to b« iramatically worsening this situation. 3. Finally, in addition and often responding to, the two afore- mentioned sets of inhibiting factors — the characteristics, attitudes and values of the disadvantaged consumers themselves and the market structure they face — the final source of difficulty and the o often emphasized in the popular press is the exploitative behavi( the merchants whom they mast patronize. Accounts of how these merchants practice the "bait-and-seitch", the "fear-sell", the "turnover" and the blank contract to bilk the unsuspecting consumer abound in both the popular and scholarly literature in the U. S.^ A distressing feature of these accounts is how frequently and how successfully the exploitative raerchai are able to achieve their ends through the use of the legal system. Clearly, of course, these three sets of forces interact. Indeed, this interaction often produces a cyclical effect which I have elsewhere ■I ■; termed "the cycle of consumer disadvant hat is, for example, the consumer's lack of Income, unstable induces the ghetto merchant to exploit himj over charging 3dvl underservi him. This, inturn, often overburdens the disadvantaged cc to default on his debt. This default, directly or indirectly, may affect the consumer's job status, thus, in a final turn of the cycle lowering his incc making his job record even more unstable and further increasing his sense of powerlessness. What may have begun as an attempt to marginally escape poverty through material acquisition only serves to drive the disadvantaged consume more deeply into h: It is clear that . ' Lar segment of tl other hard t he existence « problem is relatively widely understood. So this r>r or goal of the consumerism movement, at least as those 12 by the Consumer Federation of America. It is these attempts a that, In fact, constitute social marketing in the ?:otlerian at these attempts have been relatively unsuccessful in the United S1 Is now generally well accepted. It is to an evaluation of this Lacfc of succ« that we now turn, paying particular attention to ways in which consumer: « approach to social marketing in the ghetto is . for pro* faced by social marketing in other domair Con In the '- . - consumer] ... - . been that the .) are to be helped < out, is a phenomenon c ives tryii the lot of tne have-nots. It is i ationsl ... of which have manifested the \ . • ed at t'c • g : a. the danger of misunderstanding b. the danger of haste c. the danger of d. the danger o e. the dangei ■"•• The Dang er of : ~-rsta.. A major problem for the middle clae seeking solution he disadvantaged consumer' s problems is t.. e these proble different f rom those they are f ar with only in degree an in kind* It is true that the disadvantaged consumer's problems are many respects different only in degree: they have relat y Isss education, less income, larger families and so on. But their probler are different in kind in four significant ways: 1. Disadvantaged consumers have not just lover inco .riddle class but they have ii '.cat are very_ r rarely- faced by the Le class. Tl lack an essential ingr t for financial pis, classes have. This lack of informal eans, for example, t ihey often undertake debt they subsequently canr at the point of decision the action sec 2. Those who are black, Indd erican face racial discriminatio n -whicl le evidence that discrimination at lea*.:. . even advantaged who are e : 'cally rest-. scope, subjecting them ligher interest rates, and so 03 3. The disadvantaged live in ghettos defined by race s where the market opportunities are qualitatively different frorc the by the middle class. Research has now well documented the fact that market structures are domina" \x L, ran stocked, poo i *+. in many cases shopping goal s than considerate outlets and door- rs be . bring important social Lfications The critical point to be made here • at the. ive differences lead to mai ..ace behaviors wh hers applying, as Louise Richards has,^ their own concepts ; .3d financial planning view as "irrational, sunder* an extremely poor basic for social. The Dan ger c . Dcspi is rauc t strategy ii . . the pc del: behavior and : . : areas. The spec-: of suc v consumers worse not better c "ace, . 3 • T he Danger of Excessive Reliance on Legislation As noted in Figure 1, the problems be disadi roots in three g set. legislation to cv itati- to merchant middle class is often wont to do this ?x tripartite foundation of the proble; . ** • l"'he Danger of E xcessive Anti-b Reformers in social r'ting often see solutions as being facilitated through attacks on "the establishment". They fail to see that ime solution dimensions, the skills, money and time that can best be pro\ by ,: the establishment'* are essential. In the present instance, this is moi dramatically apparent when one considers the problems involved the market structure in disadvantaged areas. 5» The Danger of Overprotectiveness The haves usually believe they know wiv best for the have -nots or, not, they at least ends. Hove- ; diss participate a. as alrf. reallj loi b. the di^ -aged class; c. further, 3t ovi " be ing d. perhaps i - . Summary e taw - inherent u i ■ We 3* We not let excli i : / 1 i a : H 5 o i . . -.* 1. Philip . r and Planned Social Che pp. 3-12, 2. Philip KotL of Ma* Journal of Marketing , Vol, 33? 1> (• •• PP- 10-15* 3» William Lazer, "Marketing's Cha- s," J of Marketing , Vol* 33 » 1, (January k» David Caplovitz, The Poor Pay More, ( ?• i stallment C: and Retail Ss.. t of C Merchants (Washingt :'verni7ien- ; illiam Kanselraan, Poverty," ' 0. 7. See, for example, Warren G* of the Marke Davi [he Free Press j 9* A • June 10, '. 10. St.-e Magnuson an , 0£. 11. Alan R. Andreasen, The Disadvanl in press) , Aimer Federatio America, Poli cy He sol i Federc of America, July 21, I 13. Louise Education and W Ik, Alan R. Ar B&3H KW UNIVERSmc OF ILUNOIS-URBANA 3 0112 060296701 IHHbS BflESEfiBOIBBE !Hllm&B mm JB_ 1 mm JHi 111 H mi Rl «&» nan H BagftBffiBg HBHL