Corporations are looking for market expansion as an essential ingredient of strategy. Though consumerism is an element often considered in the external environment, the importance of consumerism is strategic success is often under estimated. Corporate negligence of consumerism can result in expensive repercussions and damage if not prevented in the early stages.
Corporate negligence of consumerism and underplaying it in the strategy comes out of either corporate fear of tackling the real problems of consumerism and the cost, or the perception that the consumerism is a passing phenomenon displayed by a few that seek public prominence. Sadly this type of thinking also leads to attempts to subdue the consumerism by buying out the fictitious consumer advocates and leaders who have intentions other than consumer welfare.
But consumerism is not a dying phenomenon. It is growing phenomenon and a necessary and essential element that strategists need to be alert about. The growth in consumerism is unavoidable in parallel with increasing expansion of Corporations into new markets as a part of global expansion. Increased information access, product literacy and community proximity and exchange enhanced by internet, all contribute to the growth in consumerism.
Further, in an increasingly competitive world the availability of numerous suppliers gives the consumer the advantage of hard bargaining and reduces the threshold of tolerance for defects in product or service.
In many countries the systems for handling consumerism inclusive of judicial and legislative processes are inadequate and slow. The compensations are meager and often the consumers get crushed by the corporate power and strength. Yet, in serious situations like industrial accidents any negligence in handling the damage and manipulation observed are not tolerated. Hushing consumerism is a short term plan and the problems are bound to sprout up again and again as the society at large resents the damage done to it by the corporate giant. The Bhopal Gas incident is still in the air. The BP oil spill is rain waves that will perhaps be there for some time.
Corporate attitude to consumerism thus has been apathetic, and reactive, that too trying to get away with minimal patching up rather than actively absorbing it into the blood stream of the corporate strategic process. Corporations failed to realize that consumerism can be an opportunity for the strong willed corporate bodies that intend to exploit and demonstrate that to the consumer. Exploited in a logical fashion it is tool for building the social image and build brands on a genuinely consumer oriented platform. It is not an exaggeration to say that many of the consumer appeals and brand damages could have been prevented in health care and auto industry if consumerism has been taken up proactively than reactively.
Prevention is better than cure they say. In a world that is increasingly health conscious preventive actions are needed not just in the short term and highly visible areas like environment but also in foods that can damage health in many ways. Reduced cholesterol or fortified foods to supply additional nutrients will not be differentiators in the health conscious world, but would be essential qualities and requirements for marketing a product.
Corporations must stop looking at these tactics as differentiators where they can make a powerful claim but must learn to see them as essential features and ingredients of a product.
An area of concern is obesity, a problem that confronts the adults and children as well. Honestly speaking, it would not be an exaggeration to suggest that the corporate enthusiasm in promoting the rich and fatty products contributed to a significant portion of the obesity in today's children. Through their persuasive advertisements and luring promotions they have contributed heavily to the motivation and habit building in consumers that consume fatty foods.
So what is the remedy? The good news is that there is some realization and social responsibility being demonstrated by the fast food producers and the beverage manufacturers in adapting a voluntary self regulation, at least with respect to children. They have now taken decisions to abstain from advertising to kids, and selling these products in the vicinity of schools. This is surely a welcome step in the right direction. We can look forward for a healthy society with healthy consumption pattern instead of excessive consumption.
Voluntary self regulation is something that the educators have been harping about for some years and the corporations have turned a deaf year to it. Rightly or wrongly, it was considered an additional burden on the companies financially and otherwise. This was a misconception at that time, but now, it would be a strategic error.
It is essential that it becomes an integral part of the planning process and the diversity of the laws coupled with the mindset of the global consumers with respect to the long term and short term damages it can cause must be seriously evaluated before getting into international markets.
Further, corporations that intend to sustain themselves in global markets in any product category must carefully examine the preventive and self regulatory policies they can adapt in the interest of the new consumer. It is unlikely that it will be additional cost as it would be compensated by a proportionate reduction in insurance and consumer complaints and compensations. The credibility and good will gained through the new governance that can flow into strategy can add substantially to the brand value.
An experienced business executive, educator and consultant. Many years of experience in industry, as consultant and professor and dean at Indian Institute of Management. Visits Management Institutes and lectures on diverse management issues. Writes on management, education, political and social issues. Active participant of social responsibility and social marketing programs.
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