Buy a pack of "X" brand tea and win fabulous prizes of a TV, refrigerator & DVD. Send an empty wrapper/pack of "masala", along-with copy of your NIC and enter into a lucky draw to win cash prizes upto Rs 1 million.
Just turn on the TV and you will find running advertisements like these. Open the pages of any newspaper and read such promos.
As a result of these seductions, housewives are purchasing ten packets of tea instead of one and children are asking for more money to buy more candies, in search of these prizes and free gifts, which have never been won by me or you, my and your family/relatives, or by any person whom I or you know.
Who are those lucky fellows whose lives are turned around by their buying a single pack of tea or masala?
If some one is really winning these fabulous prizes then who is paying for this? The company offering it or us consumers?
Whether it is a national or multinational company, spending millions of rupees on advertisements, promos, sales promotion schemes and events, to persuade consumers to buy their products, regardless of whether they need it or not, the only objective is "to increase the users and uses" for the sake of profit and more profits.
Is not this overspending on marketing tactics, creating a trend of extravagancy in our society?
These marketing and persuasion techniques are making consumers spend more, more than the resources and capacity.
These marketing and selling expenses are added to the cost of the product by the companies.
Sometimes, these expenses are as high as 25% of the actual cost of production. Hence if the actual cost of the product is Rs 75/= per unit, these extra marketing and selling expenses brings the cost up to Rs 100/= per unit, making its selling price to be Rs 125/=, if the manufacturer decides to charge only 25% profit. But, still this is not the consumer's price, the consumer will have to pay additional marketing expenses in the shape of the distributors' margin of 10%, and the whole seller's margin of 5%, and the retailers' margin of 15%. These margins are calculated on a value addition basis.
That means, an effective increase is not 10+5+15=30%, but may be 35% (Approximately).
In other words, the price a consumer will pay is Rs 166/=. Whereas, it would have been only Rs 94/= including the 25% manufacturer's margin, if there were no marketing expenses, including advertisements, sales promotion schemes and additional margins of marketing intermediaries.
Therefore, marketing is certainly a monetary burden on the consumer's back as the consumer has to pay Rs 72/= more or a 77% higher price because of these marketing and selling activities.
Should we not stop these companies from more "marketing", as we are fed up of these "free prizes" and "lucky draws"?
We cannot afford to pay a 77% extra amount, for something we have never won and could never win. We can sure that our disposable income would automatically increase without any increase in our real income, if no "marketing & selling expenses" was burdened to the products we buy.
Hence a major portion of our income would be freed for saving and investment if "marketing" was removed.