Global Economic crisis:

Do marketers have the answer?

Nimal WIRASEKARA

MSLIM, MCIM, DipM(CIM UK) MASMI (Aus), HIMM(SA)

Executive Director Sri Lanka Institute of Marketing

Various disciplines have been involved in the field of modern business to ensure the success of these businesses. Finance, Operations, Production, Material, Human Resource, Information Technology, and Marketing are some of those major fields that have taken over the business of making a business a success.

However, economics have been playing a leading role in the larger area of covering and governing the businesses and this area is the national economy of a country. Most of the other management disciplines have used economics as a foundation for the growth of a specialized area of activity. This could be seen as several branches of the mother discipline 'economics'.

Central Banks of countries, national economic planning authorities, etc. are mostly managed by economists except for a few specialists who are not economists. Though most of the economic theories are based on Adam Smith's propositions and models, except for a few economists such as British economist E. F. Schumacher who authored Small is Beautiful and John Maynard Keynes who authored The General Theory of Employment, Interest and Money.

The second most powerful group in managing business success of organizations is the financial specialists. Historically they have been in existence for several decades as professionals, and for several centuries financial specialists have been conducting their activities in the form of a vocation.

This has been in the very basic form of book keeping in the early stages. Financial specialists have been using the audit system to analyze the success of organizations. In financial management one looks at the historical data of the organization's performance and tries to predict the future so as to minimize risk on management decision making.

However, due to the recent unsavoury happenings in western countries including the following global issues, auditing is now looked down as a suspect activity.

Operations Management and Production Management are quite recent compared to the finance management and economics. Alleged fraudster Allen Stanford of Stanford Financial Group, and proven fraudsters Bernard Madoff (Ponzi scheme,) and Ramalinga Raju of Satyam Computer Services have been smart enough to either get the auditors to support them or to hide frauds amounting to millions of dollars from the auditors.

Even in Sri Lanka similar events have taken place and in certain cases no Annual General Meeting has been held for several years.

Production, Operations and Human Resource Management usually do not have adequate authority to operationalize such fraudulent activities.

All these functions are within the organization and can only carry out a limited amount of activity to bring funds into an organization to make the organization successful in business.

Now one will notice that there is a major difference between marketing and the other functions of an organization. While all other functions except for Human Resource Management and Marketing look at issues logically, these two functions look at issues psychologically.

Economics is based on a rational human being. In the eyes of a marketeer, there are no rational human beings. Each human being is unique and changes with every situation. A person who is very polite may act in a harsh manner after having an argument with his wife at home. Thus, the marketer knows that there are latent demands for various products and services which may be invisible at the moment.

The present economic scenario was caused by changing of the people's attitude towards financial institutions, which later on spilt to other industries too causing a ripple effect.

As the financial establishments ignore the psychology factor of the customer they will find it difficult to understand why the customers are behaving in such an irrational manner.

The writer is the Executive Director of the Sri Lanka Institute of Marketing, and the Vice President of Family Planning Association of Sri Lanka, and is a member of the Marketing Advisory Panel of the Export Development Board, a Council Member of the Federation of Chambers of Commerce and Industry Sri Lanka, and represents Effies (Advertising Effectiveness) in Sri Lanka through SLIM. He is also a Past President of Rotary Club of Colombo Millennium City.

A marketeer using various techniques and models will be able to change the wants of a customer. This is how powerful marketing is. A marketeer can go to the extent of making an awful tasting drink taste wonderful and even make this drink the most valuable brand in the whole world.

In this sense we can take the example of Steve Jobs of Apple Computers. When he launched the I phone which was not the best mobile phone at the time became a hit with thousands of people waiting and queuing up to purchase the I phone.

However, as mentioned previously there were better mobile phones at cheaper prices.

It is the right time now for the excellent and innovative marketeers to come out and shine while the mediocre marketeers and other professionals will not dare to challenge the status quo.