Marketing in Large Ocean States: Theory, Practice, Problems, and Prospects

By Cristanna M. Cook

After spending many years working and living in the South Pacific and interacting with students in Fiji and the Cook Islands, it seemed necessary to write about the experiences of these students as they navigated the difficult landscape of the program requirements at the University of the South Pacific, Fiji Islands.

The University of the South Pacific is supported by twelve island states: Fiji, the Cook Islands, Tuvalu, Vanuatu, Niue, the Marshall Islands, Samoa, Kiribati, the Solomon Islands, Tonga, Nauru, and Tokelau. The main campus is in Fiji with other campuses located in the other eleven countries. These islands are small in land mass but large in square kilometers as they contain a large area of ocean.

• Language: English
• Publisher: Sentia Publishing
• Release date: Jun 1, 2016
• ISBN: 9780997582246

Book preview

Preface

After spending many years working and living in the South Pacific and interacting with students in Fiji and the Cook Islands, it seemed necessary to write about the experiences of these students as they navigated the difficult landscape of the program requirements at the University of the South Pacific, Fiji Islands.

The University of the South Pacific is supported by twelve island states: Fiji, the Cook Islands, Tuvalu, Vanuatu, Niue, the Marshall Islands, Samoa, Kiribati, the Solomon Islands, Tonga, Nauru, and Tokelau. The main campus is in Fiji with other campuses located in the other eleven countries. These islands are small in land mass but large in square kilometers as they contain a large area of ocean.

The University has many undergraduate and graduate programs. My experience has been with the Master of Business Administration program now located at the lower Laucala campus in Suva.

I say that the students have to navigate the difficult landscape of the program requirements at the University of the South Pacific because the courses taught are challenging and western in their orientation even though most instructors do their best to relate class material to the South Pacific experience. Criticisms leveled at the courses I have taught in the marketing area are specific to the need for the interpretation of the textbook concepts from the South Pacific perspective. Although some marketing concepts apply without the need for redefinition, others are less applicable and have to be redefined to make sense in the South Pacific context. No text available gives marketing examples from this area or points out the problems that marketing and movement toward a capitalist system brings in a society where profit has not been the major personal motivator.

This monograph is an attempt to do what the students want and need. Anyone interested in marketing in general can find the examples useful in pointing out differences between western and non-western marketing application. Although the South Pacific contains many island groups, the comments in this monograph are based upon knowledge gathered from several of the islands that are part of the University of the South Pacific’s reach.

The material in this text comes from research, personal experience, and the insights of students and friends in the South Pacific. Specific examples are often based on experiences relayed by students and friends. These examples are presented in the words of the person who provide the example and that person is cited as the owner of the idea or example. Sometimes students did not identify themselves. Where his has occurred, I give credit to the class. Examples have been edited to fit with the flow of presentation. Any unintentional misrepresentation of student ideas is my fault solely.

Table of Contents

Chapter 1: Historical Marketing & Anthropological Theory Relevant to the South Pacific 1

Chapter 2: The Environment 25

Chapter 3: The Countries 50

Chapter 4: The Marketing Definition and Related Concepts 64

Chapter 5: Understanding the Environment for Market Planning 75

Chapter 6: Marketing Research and Management Information 83

Chapter 7 Generating Customer Satisfaction and Loyalty 92

Chapter 8: Consumer Behavior and Organizational Markets 103

Chapter 9: Segmenting Markets with Positioning and Branding 119

Chapter 10: Products and Services 136

Chapter 11: Pricing 144

Chapter 12: Supply Chains 149

Chapter 13: Marketing Communications 157

Chapter 14 Combining Theory and Practice to Determine Problems 173

Works Cited 180

Chapter 1: Historical Marketing and Anthropological Theory Relevant to the South Pacific

The Value of Marketing

Living in a Western society, it is not possible to escape the daily exposure to marketing communications. This is especially true around election time. Signs at the entry points of shopping centers provide information and form expectations and probably make some kind of impact on our memory. The impact may be minimal due to the over stimulation of so much information using many different communication methods. The fact that politicians and political hopefuls use such marketing communications leads one to believe that these messages must have some kind of useful impact. We see the ads on TV and over the world-wide-web or hear them over the radio. We read the newspaper and magazines and see ads. The companies that pay for such advertising would not do it if they did not believe advertising does not work or at least keep up with the advertising of competitors.

Business schools have concentrations in marketing and marketing communications. Marketing courses include areas like marketing research, sales and sales management, international business, international marketing, advertising, international finance, supply chain management, retailing, sales promotion, social media, e-commerce, and publicity. So, the area must have value because the institutions of higher learning offer entire programs devoted to one or more aspects of marketing.

Even non-profit organizations and associations use marketing. In fact, university business programs often have courses in non-profit marketing. Offering marketing for non-profits is a testament to the importance of marketing principles to organizations that do not have the profit motive as their prime mover. I have spent a good deal of my professional live working for non-profits and engaging in marketing research for these non-profits. Evidently someone thinks marketing research is important as they elected to pay for it. If someone is willing to pay for something, then it must have value. We teach students to calculate the benefits and costs of any marketing activity and only engage in that activity if the benefits at least equal the costs. We encourage students to use net present value analysis as a way to value alternative investments.

Marketing is presented to students on the basis of it being the only functional area of a business that generates revenue. All other functional areas are cost centers. Without some kind of marketing, there would likely be limited revenue for the company. So marketing must provide value to the business or organization.

Companies themselves have sales training for the staff. The understanding of selling seems to be important to many companies. Even the Gemological Institute of America explains the selling process as it relates to the jewelry industry in their training materials. Understanding the selling process must have value.

Texts in retailing show the increasing employment opportunities in retailing. There are many changes in retailing including increasing size of operation and concentration in the hands of large companies such as Wal-Mart, the world’s largest retailer. Smaller companies can have trouble competing with such giants but there are acknowledged strategies that can be used to compete with the giants in the retailing industry. Again, the knowledge of marketing strategies can have value to the many independent retailers.

Most business operates in a global market. Increasingly, businesses are competing on their own domestic shores with foreign firms. Business is pressed to look for new markets abroad. Getting into the foreign market before one’s competitors conveys a first-mover advantage. A firm may need to escape severe import restrictions by entering foreign markets. Slumping domestic demand also is a motivator for entering foreign markets. Learning how to enter these markets requires extensive knowledge. This knowledge is taught in undergraduate and graduate marketing programs. Global marketing knowledge has value. In fact, South Pacific global marketing examples relate mostly to foreign companies located in that area.

Schools of Business often do not question the value that the knowledge of marketing has for students. If we have training in marketing concepts, from our own training, and daily experiencing the world around us, we see marketing principles at work. However, this experience and training we take for granted is not necessarily seen as of value elsewhere. I remember telling students the importance of marketing in a free-market economy. I was reminded by one female student that in the Fiji Islands, most land is owned in common and not all goods (i.e. land) can be sold on the open market. Her point was that marketing does not facilitate the exchange of all goods. She spoke with emotion. She believed that her way of life was far superior to the western way of life with their notion of land as a free market good. The village is home for many Fijians. They can come back to the village or koro. It is a place of refuge for family members. Several extended families make up the clan or mataqali. Individuals leave and go to the larger communities such as Suva to pursue education or job opportunities. The village members can contribute financial support of a promising student. It is interesting that the United Kingdom that controlled the Fiji Islands for 96 years kept the village system and refused the sale of land into private hands. Over 80% of all land is under the village system of land tenure although land can be leased and often is. Long lease periods are common (i.e. 99 year leases). The well-known resorts along the Coral Coast and on Denarau Island have long leases with the indigenous land owners.

Such interaction with South Pacific students have led me to re-assess the marketing concepts being taught in the South Pacific and in general elsewhere. It is not that these concepts have no value. In fact, in the western world, these concepts are very useful. However, they have to be reviewed and one should be careful when teaching such concepts in non-western environments. A friend of mine, who also teaches at the University of the South Pacific, is well aware that standard western concepts must be revised in the area of New Business Venture Creation. New business start-ups must conform to the culture, laws, and lifestyle of the South Pacific. I believe that the principles of marketing should conform as well if indeed changes need to be made in these principles. At least, we should make an effort to understand how marketing principles work in the South Pacific context.

The Discipline of Marketing

The early history of marketing divides the discipline into the history of theory and the history of marketing which presents the use of the practical application of marketing methods (Bartel, 1962). It may be more appropriate to speak about different schools of thought rather than different theories of marketing. The standards for the word, theory, as a scientific term, are high and not met by the different schools of thought in marketing. The theory in marking is not coherent or the result of a set of hypotheses that have been given credibility by scientific testing. This is not to say that the marketing concepts and applications are not useful in both developing and developed countries. But the testable marketing hypotheses have not provided generalizations that lead to the development of an overall theory. Nevertheless, marketing academicians do speak of marketing theory or theoretical viewpoints or sub-areas of marketing (Sheth, Gardner, & Garrett, 1988).

More recent work on marketing theory (Shaw & Jones, 2005) list 10 sub-areas: marketing functions, marketing commodities, marketing management, marketing institutions, interregional trade, marketing systems, consumer behavior, macro-marketing, exchange, and history of marketing. These categories are interconnected and overlap considerably.

Marketing function organizes marketing into functional areas such as accounting, productions, and promotion.

Marketing commodities identifies all the concepts and principles concerned with the provisions of goods to consumers and business.

Marketing institutions emphasizes the role of the players in the system of distribution such as middlemen and how these players are organized.

Interregional trade looks at where the marketing takes place and would include international exchanges.

Marketing management stresses the value of developing a marketing plan using the marketing mix idea oriented to specific market segments.

Marketing systems heavily overlap with marketing institutions which outlines the interrelationships between marketing and the larger society. This view is particularly important in large ocean states as these societies are often communal in nature and it is impossible to separate the marketing effort from the society at large.

The consumer behavior viewpoint accounts for why people buy and how these motivations can be understood for effective marketing.

The macro view of marketing which overlaps heavily with the institutional view indicates the importance of how marketing affects and is affected by the society and culture. This particular school of thought is also of importance to large ocean states as the cultures of these societies are not traditional marketing-oriented ones.

Exchange looks at who makes exchanges and how these exchanges come about through the division of labor.

The final area of marketing is the history of marketing itself and the development of different marketing areas and by whom.

These authors also identify others who have indicated that marketing involves more than the obvious trading of goods (Commons, 1924; Breyer, 1934, & Alderson, 1965). Marketing cannot be separated from other societal institutions. In large ocean states, these institutions are not always compatible with marketing tenants. People have roles, statuses, and norms as they are part of social institutions and these roles, statuses, and norms are do not necessarily fit with the motives of profitability and values that are monetary in nature. This point of view seems to counter the marginal analysis of managerial economics and theories such as the energy response function or ENR (Grant, 2010). One comment very true to South Pacific society mentioned by Grant is the possibility of many competing goals to those of the standard western work environment. The critical error with the ENR approach more so than a general marginal approach of managerial economics is the belief that these other competing goals are less important than completing the wishes of a manager trying to maximize profit. In societies where maximizing profit is not as relevant or accepted as the driving force for human behavior, the ENR approach has limited value. In fact, in the modern South Pacific, there is this conflict between the global economy which tends to support standard marginal analysis and the other which does not take part as much in the global economy and where local institutions reject the foreign impositions. Part of the reason for the inability of standard marginal analysis and profit maximization to take-over the South Pacific societies is the fact that land is not bought or sold. When one of the key inputs into the production process is not under the free market, then we have to look at the social relationships to explain why the ENR approach and marginal analysis has limitations. Those that support such western ideas must broaden their view and take into account the values, norms, roles, and statuses of the society. Thus there is a place for sociology, psychology, and anthropology especially the work of the economic anthropologists (Hann & Hart, 2011).

Marketing seems to be an extension of marginal analysis. The broader view applies as well to marketing. Because exchange relationships are socially proscribed by the roles, statuses, and norms of a society, it is most necessary to, as Shaw and Jones (2005) point out, broaden the notion of marketing/generic exchange. This means that marketers should draw from other disciplines such as sociology, psychology, and anthropology to understand institutions whose primary purpose is not direct economic profit such as political structure, religious organizations, and social or family systems (Shaw & Jones, 2005).

There have been several ways to categorize the marketing discipline and some of them seem to point out the need for an understanding of the social context in which production and marketing take place. Sheth, Gardner, and Garrett (1988) provide a way to distinguish marketing perspectives (schools) that are more appropriate for non-western cultures because of the importance of social interaction explaining human behavior. Marketing schools are divided into interactive vs. non-interactive and economic vs. non-economic. The commodity, functional, and regional schools are non-interactive economic. The institutional, functionalist (not the same as functional), and managerial are interactive economic. The buyer behavior, activist, and macro-marketing are non-interactive non-economic. The organizational dynamics, systems, and social exchange schools are interactive non-economic.

Some of the schools of marketing are more appropriate to South Pacific society than others.

Non-Interactive Economic Approaches:

The commodity school is concerned with the movement of goods from producers to consumers and the emphasis is on the products rather than the human interactions that move products to consumers from producers. The development of product classification systems was a key principle of this school. There were several different ways to classify goods offered. Melvin Copeland (1923) offered a classification that today is used in most marketing texts: convenience, shopping, and specialty goods. Classifications like this were thought to be helpful to marketing practitioners. However, although this classification system is in almost every marketing text, it is of limited use to identify management decisions that would help the marketing practitioner. Other classification systems include Edward Gardner (1945), Rhodes (1927), and Aspinwall (1958), Raymond and Assael (1974), Holbrook and Howard (1977), and Enis and Roering (1980). These classifications are not very helpful to understand marketing in the context of the South Pacific. In some areas of the South Pacific, retailing is a major part of the urban economy but not much of an influence in the rural sector. Even so, these classification systems are difficult to use in understanding South Pacific urban retailing to say anything meaningful. There are strategies that are associated with durable, non-durable goods, convenience, shopping, and specialty goods. However, these strategies would be immediately understood by marketers and there is not much need to point out these classification systems. Classifying the different retailing options can have some use to point out the major types of retailing formats. For example, off-price retailers as we understand this format in the western world does not exist in the South Pacific as overstocked branded merchandise is not often seen there and there is no reason to sell branded goods cheaply. The dollar store format is carried out by the existing small local Chinese and Indian shops.

The functional school divides marketing into activities that occur in a business. This approach is the forerunner of the 4 Ps of marketing popularized by McCarthy (1960). The 4 Ps are: product, price, place (distribution), and promotion. McGarry (1950) listed contractual, merchandising, pricing, propaganda, physical distribution, and termination functions. In order to