Medieval Marketing
by NIH marketing correspondent, Bryce MallowMarketers who know no history are condemned to repeat it. Unfortunately, history does not seem to be on the curriculum of many business schools.
Consider some of today's major marketing initiatives. Book marketing, as St. Clair Carr's earlier article points out, is founded on increasing the number and cost of titles. Cable television marketing is founded on increasing the number and cost of channels, spreading content thinner and thinner. Banks, at least in Canada, are increasing the variety of services they offer, each with its own service charge.
The marketers in charge of these initiatives have forgotten the experience of the first transnational corporation. That corporation is the Roman Catholic church. You want a service from the Roman Catholic church, you pay for it. You pay to get baptized, you pay to get married, and after you're dead your survivors pay to have a prayer said for your soul.
It was this last practice that was the downfall of the Catholic church's corporate marketing. In the middle ages rich people decided that since every prayer said for your soul after you were dead reduced the time it spent in purgatory, they would endow orders of monks and nuns to pray for their souls after they were dead. Demonstrating a spirit of enterprise that would warm the hearts of the gang at The Economist, the church developed a market out of this practice. No longer was it necessary to endow your own order, the church would sell you prayers in bulk, in the form of an indulgence.
At this point consumer resistance set in. Incensed by the imposition of charges for a service that wasn't mentioned in the Bible, the Protestants split off from the Roman Catholic church and started their own operations offering a more basic set of no-frills service alternatives. Very soon a large part of the clientele of the Roman Catholic church was satisfying its spiritual needs at Protestant outlets.
In the book trade we have already had one Reformation. By the 1960s a wide range of serious titles was available in inexpensive editions. However, the trade is now going through a Counter-Reformation. In Canada, thanks to "convergence," bookselling is now dominated by one corporation. Its stores abound in lightweight material, and you pay through the nose for both it and the serious stuff. In the late 1960s, for example, many works whose copyright had expired were available in cheap editions costing about 65 cents. Today the cheapest editions of these books cost about 9 dollars, so their price has increased about three times as fast as inflation. The idea is that with only one source the consumer will have to pay the prices the source wants.
However, the bookstores have simply triggered a second Reformation. Serious readers are simply less likely to buy new books. As E. N. Beej pointed out in a recent article here, serious readers are shopping at used bookstores, where you can get a complete literary experience without the frills, without the tables of Oprah's picks, without the franchise coffee shop, without the CD department, without the gift shop, and with a selection of books made by someone with actual literary judgment. Or they are taking part in Project Gutenberg, which provides free electronic copies of books in the public domain. Or they are going to the public library. The big box stores have lost the literary crowd, and it's no wonder that the big box book business is on such a shaky footing these days.
The cable industry would seem to be better protected against a Reformation, since used television programs are not an option. However, declining television viewership is not a good omen for the cable industry. People are abandoning television because the cable industry has managed to spread product so thin over the new vast spectrum of cable channels that few people can afford to watch as much television as they used to. If you want to watch as many programs as you used to watch ten years ago, you have to pay a lot more than you did ten years ago. If you want to pay what you did ten years ago, then you get basic cable, with its exciting selection of weather updates, non-stop evangelists, and the Home Shopping Channel.
The internet, of course, is one of the things attracting people away from television. The selection is better, and you don't have to visit a website at the time some network bigwig tells you you can. If people are attracted away from television, they will be attracted away from cable.
Unfortunately, the cable industry is unlikely to be saved from itself, at least in Canada. The Canadian Radio and Telecommunications Commission readily approves every new self-destructive idea the cable industry comes up with, thus keeping the handcart accelerating in its descent to corporate hell.
As for the Canadian banks, the thin edge of the wedge has already been inserted, in the form of foreign competition. The aggressive, successful hard sell of ING and the spread of HSBC branches are merely the forerunners of what is to come. Overwhelmed by actual service, consumers will switch allegiance. Mired in medieval marketing, the Canadian banks will lose a large part of their natural market.
And it all could have been avoided if marketers had studied history. In fact, it all could have been avoided if any current marketer over the age of thirty had bothered to read a newspaper once in a while. Instead, they celebrated the inevitable collapse of the world's foremost command economy, the Soviet Union, by striving to institute command economies in their own industries.
Those who can't remember last week are condemned to repeat it. As of last week, the Roman Catholic church was still saying prayers for the dead.
Medieval Marketing © Coolth, 2003
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