Unfortunately, Professor Farmer died on February 28 before completing his
revision. .... U . S. children might be as a result of their productive efforts; what
they ...
Would You Want Your Granddaughter to Marry a Taiwanese Marketing Man? Farmer, Richard N. Journal of Marketing; Oct 1987; 51, 4; ABI/INFORM Global pg. 111
Richard N. Farmer
Would You Want Your Granddaughter to Marry a Taiwanese Marketing Man? The author explores, for the third time in 21 years, the ethical problems in marketing. This time, second order moral effects of new international marketing frameworks are examined, with somewhat surprising ethical conclusions from a recanting author.
E
VERY 11 years I seem to end up examining the ethics of marketing, whether the field needs it or not (Farmer 1967, 1977). Any discipline that is partially involved in behavior modification and change is likely to be criticized constantly for its ethical posture, and in the past 21 years nothing much has occurred to refute that observation. There are still plenty of defenders of the faith and there are large numbers of vociferous critics who see nothing good in a field that tries to figure out, among other things, how to influence lO-year-olds to demand something they probably do not need and cannot even use.
Still, things change. One major change around the world since 1967 has been the growing realization that much of marketing is absolutely critical if raising incomes is what a country wants. There is little or no debate about the ethics of channel theory, logistics, informational advertising (e. g., telling customers about the technical specifications of machine tools), and many other marketing subfields that have proven conclusively to be highly productive. Too many crops have rotted for lack of adequate storage and too many plants have closed for lack of useful information about machine tool specifications or spare parts availability for
Editor's Note: This article is the third and final installment of the "Would You Want ... " trilogy by Richard N. Farmer. It is preceded by "Would You Want Your Daughter to Marry a Marketing Man?" which was published in the January 1967 issue of the Journal of Marketing and 'Would You Want Your Son to Marry a Marketing Lady?" published in the January 1977 issue. Professor Farmer did not intend for this version of the article to be the final draft. Unfortunately, Professor Farmer died on February 28 before completing his revision. The reviewers of the original manuscript and the editor believe that the three "Would You Want ..." articles should be considered as three installments of a single work. Taken as such, they afford significant insights about both the maturation of the marketing discipline and the maturation of critics of marketing from outside the discipline, such as Professor Farmer. Professor Farmer was a 22-year member of the faculty of the Indiana University School of Business in the International Business Department. Though an infrequent contributor to the marketing literature, he was a prolific writer in the international area, producing more than 100 articles and two dozen books and monographs. The officers and members of the American Marketing Association join his colleagues at Indiana University and his friends in the international business area throughout the world in extending their appreciation for his many scholarly contributions. We also extend our sympathies to the surviving members of his immediate family, his wife Jean Farmer and sons Geoffrey Farmer and Daniel Farmer.
Journal of Marketing Vol. 51 (October 19871. 111-116.
Would You Want .. .? / 111
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these areas to be criticized. In a wide variety of countries with very diverse ethical and political beliefs, such marketing approaches are encouraged and used, if possible. The major critique of marketing is directed, as always, against the advertising and buyer behavior aspects. Pollay (1986) notes that marketing defenders use economic arguments to make their point, whereas critics stress negative social impacts. Intriguingly, there is little new in either argument. Twenty-one years ago, the same arguments were used and they had as little effect in converting the heathen as they do now. You either believe or you do not; perhaps marketing needs a theological base as well as a technical/scientific one. The entire argument for or against the ethics of marketing has long been provincial, in that the question of good or evil is focused on the country where the marketing occurs. All of the critics and defenders cited by Pollay (1986) argue about the effects of advertising and other marketing activities in the U.S. or other affluent countries. In a long-term historical perspective, this focus makes sense because until very recently the U.S. in particular was basically an insular economy. Whatever happened in marketing happened here, not in some far-off country that had nothing to do with U.S. problems. One important change that has occurred, largely as a result of very efficient marketing, has been the emergence of a group of newly industrialized countries (NICs) that are directly involved in U.S. marketing efforts. A relatively unnoted and fantastically successful economic development model was created around 1955 by marketers. It was exploited brilliantly by the NICs and led to a number of poor countries becoming relatively rich rather fast. Japan, the strange new superpower that seems able to sell anything anywhere, was the prototype. Ironically, its model was invented by a Grand Shogun American general who did not even like business. After all, the present Japanese constitution was drafted by U. S. Army officers under General MacArthur's directives. The Japanese (and the rest of us) have had to live with the results ever since. The model works like this: some major retailing chain in the U. S., such as Sears or L. S. Ayres, decides to promote some frivolous item like Barbie Dolls, aided by the firm that has developed this toy; because toy manufacture is labor intensive, it makes sense to buy the product in some country with cheap, disciplined labor that is willing to try to export; the Ayres' or the toy company's buyer goes to Taiwan, finds an eager and able manufacturer, and places a $20 million order. This particular pattern is not new; historically, Sears placed such orders in Mississippi or Arkansas. The new aspect is that now another country is involved. A point no one remembers is that this pattern
can occur only if the U. S. is willing to import without onerous restrictions and-thanks to GATT, the Cold War, and numerous other factors-it is (Farmer 1985). Since 1946, the general international trade control pattern for the U. S. has been a gradual relaxation of trade barriers for such items as toys and electronic components, interrupted periodically by new restrictions. The trend has been steadily in favor of such international trade. Our astute Taiwanese manufacturer, having solved his annual marketing problem with one huge order, now can concentrate on making the dolls right. The U . S. distributor can focus on selling the product. The usual results follow: TV ads that bother many people, efforts to manipulate the behavior of prepubescent girls, anguished screams of rage from advertising's critics, impassioned defenses of the ads by marketing'S apologists, and so on. Somehow no one seems to pay much attention to what is going on back in Taiwan. What happens in Taiwan is that incomes skyrocket even while the population soars. Taiwan has had a fivefold increase in per capita income since 1950 along with a threefold increase in population. In effect, the Taiwanese do what they are very good at and the Americans do what they are superb at, namely mass marketing. Ricardo long ago called this situation "comparative advantage," and it works. The Taiwanese could not care less what the moral effects on U . S. children might be as a result of their productive efforts; what they do care about is that they are getting rich quick, to the point where Taiwan is no longer a poor country. Hong Kong, South Korea, Singapore, and parts of Mexico and Brazil, among others, have joined the parade. Wherever this odd international total marketing approach has been tried seriously, the usual result has been rapidly rising incomes for local people. These countries are positively embarrassing for other, antimarketing, pro-Marxist countries that tried other development approaches. An unskilled Hong Kongian now makes about U.S. $2.00 per hour making the toys while a similar unskilled Chinese 10 miles away in the People's Republic of China (PRC) makes about 10 cents an hour. The Marxist gods have failed and (I hate to admit this!) it is all marketing'S fault! Efforts to apply this international marketing model have failed in some countries and examination of the failures suggests why. If a manufacturer is going to make Barbie Dolls for a major U.S. retailer (or Tshirts for Japanese department stores or transistor radios for a West German retail chain), the manufacturer must make world class products from day one. Quality must be right, delivery times must be right, and foreign safety and quality standards must be met. How does some shrewd Hong Kong or Taiwanese manufacturer do this? The answer is very simple, yet many countries have
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lost billions of dollars by failing to understand what is really necessary. First, a manufacturer must import in order to export properly. No one in Hong Kong makes the right kind of low lead paint for the doll faces. If a shoddy local product is used, the dolls will be unsalable. Therefore the manufacturer imports the right paint from the U.S., Japan, or Denmark, applies it, and re-exports it the next day. This activity requires scarce foreign exchange, so authorities are nervous. Note how few PRC or Indian goods are available in the local mall. These countries still have not grasped this notion, which means that they cannot sell in the U. S. market. Hong Kong gets 40% of something and India gets 100% of nothing. Second, the local manufacturer may need a lot of help on such matters as where the good foreign suppliers are, what kind of new machine tools to order, and the best techniques in quality control. Where does a small firm in Taiwan get such information? Often from the buyer, who is anxious to get a good product at a favorable price. The sophisticated retail firm can put a small local company in touch with bankers, consultants, and suppliers rather easily. Finally, this second point leads to a third, which ironically is the most important one of all. Any NIC trying to be world class needs world class information. Consequently censorship, travel restrictions, and anything else that blocks relevant information flows are deadly. If the machine tool technical salesperson can get into the country only after waiting two years for an entry visa or if all foreign language materials are banned for whatever reason, the system just will not work. All the NICs are relatively free systems as a result. They are not perfect, but try to get to Bulgaria to give technical advice, then try Taiwan, to see this point vividly. Now let us consider the second order effects of that ungodly advertising back in the U.S., Japan, or Western Europe. What do the Taiwanese and Hong Kongians do with all their extra income? Remember, it was those ghastly Saturday morning TV ads that generated it! The usual answer is that they do what every other culture does with new cash. They consume a lot more, but they also have a lot more to invest in temples, churches, medical care, and education. To do useful things, the first priority is to get some income, which is what the NICs did. Moreover, these countries tend to be very cosmopolitan in their new expenditures because open communication systems are amoral. That is, the same linkage with the U. S. that sends technical information about new paint for Barbie Dolls can also send new information about wonder drugs, the latest style in women's clothes, or pornography. In an open communication system all sorts of information is transmitted and authorities cannot interfere. If they do, the system collapses.
Taiwan is getting rich, and our astute entrepreneur, wealthy from exploiting young American girls, scans his world to see what to do with his two sons. One of course will take over the business eventually, but another goes to the U. S. , obtains a medical degree from a fine school, and returns home. Why? There is real money to be made in health care in Taiwan. Anyone familiar with the depressing overall mortality and infant mortality rates in poor countries knows that fantastic improvements are possible once the country acquires the funds and trained minds to create hospitals, surgical teams, and preventive medical corps. Now Taiwan has the funds. So 30 years of 10% plus real growth have gone by for the Taiwans and Hong Kongs of this world, and no one knows or cares. Hong Kong now has a world class medical system, however, that today is almost as good as the average U.S. state's system. Chu (1985) notes that when one compares causes of mortality between Hong Kong and Indiana, eight of the 10 top causes of death in Hong Kong are the same as those in Indiana. The causes of death are "rich men's causes," the two leaders in both places being cardiovascular failures and cancer. The babies do not die in either place the way they do in the poorer parts of the world and longevity in Hong Kong is close to that of Indiana. The fact that medical professionals take full advantage of communications nets created to sell Barbie Dolls really is not surprising when one considers that doctors in Singapore, Taiwan, and Hong Kong were largely trained in England and the U. S. It is important to get the paint right on the dolls, but it is more important to know that one's U.S. medical school has developed a new open heart surgical technique and that one can find out more about it by subscribing to Lancet or the New England Journal of Medicine, or perhaps by calling one's professor or possibly a classmate now practicing in Los Angeles. It is necessary to import the paint to get the dolls right, but the same container can include a few cases of the latest wonder drug from aboard. A peculiar second order effect of this new marketing system is that hospitals and doctors in the NICs have access to just about every drug known in the rich countries and they also know how to use them. The NICs are now major importers of high technology health care equipment, computers, and drugs. Marketers in advanced countries, noting sharply rising incomes in such places, can apply all the modem marketing techniques they know so well to push their own products abroad. Some people seem to think that countries only sell, but when they have money, they also buy. The NICs have very rapidly increasing supplies of foreign currency, growing at 10 to 15% a year more, a point not unnoted by astute marketers of so-
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phisticated products of use in those countries. Modern marketing works everywhere, in ways undreamed of by its early practitioners. I have friends who have gotten sick in closed systems, such as the U.S.S.R., and others who have gotten sick in Hong Kong. If your health is frail, stick to the NICs (how's that for a catchy advertising slogan?!). A closed system may have four or five basic antibiotics available and its doctors may have learned from texts of the 1930s. Your English-speaking Singaporean doctor probably went to the University of Chicago Medical School and is as up to date on techniques as any European or American. Moreover, his hospital is world class because its administrators and experts also have access to world class information and education and are able to import the latest in medical technology. The end results? Life expectancy in Taiwan, Hong Kong, and Singapore is rapidly approaching that in the U.S. and Japan, whereas male life expectancy in the U.S.S.R. actually is dropping. It figures, and it is all marketing's fault! Chu (1987) compared various quality of life indicators in such closed systems as Albania and Burma with those in open, totally marketing-oriented systems such as Hong Kong. There is a strong positive correlation (difficult to find, given the problem of obtaining data from closed systems) between open market systems and quality of life. The more open the system, the better educated the people, the more consumer goods they have, the longer they live, and the more information they can obtain. I should add that there seems to be a high positive correlation between a country's quality of advertising and its openness: the more open the country, the worse the advertising. If you think U.S. TV ads are terrible, visit Taiwan! So it comes to this: in a quite provable sense, marketing saves lives. Ideologues who close off their country to save its culture from the Great Satan in the long run are killing people. Chu (1987) notes that virtually all of our humanistic comparisons are very short term. We observe misery in the U.S. today and demand immediate action to solve the problem. Over two or three decades, however, today's serious problem may disappear completely in a fast growth economy, as rapidly rising incomes provide the resources necessary to solve it. Hunger was a severe problem in Japan in 1946; by 1950, that problem had disappeared. High infant mortality rates were a major problem for Hong Kong in 1960; 25 years of rapid economic growth, coupled with free information channels and easy imports, resolved the problem without much direct attention being paid to it. If a country's income doubles every six or seven years, many serious problems will seem trivial before another decade has passed. How do we double income every six years? Join the world, find a billion dollar buyer like Sears, pan-
der to the depressing tastes of U .S. or Japanese teenagers with unnecessary, probably immoral products. One sure way not to succeed is to become an Albania, where no one gets in or out, nothing much is imported or exported, all information is totally censored, and you die young, perhaps in the glorious knowledge that your cause has triumphed. The really incredible success of places like Japan, Hong Kong, and South Korea has restructured the world, at least in an intellectual sense. When I wrote the first piece in this series in 1967, one could argue plausibly that non-market-oriented places like the PRC and Poland had a chance of doing better, economically and socially, than the Hong Kongs. Now it is widely agreed (and bitterly, too) by most knowledgeable observers that if a country acts like Iran, Burma, or Albania, the sure result will be economic stagnation, decay, and even excess deaths. There is no high technology medical care in Iran's dreams, but one presumably gets to heaven faster in such a place. If Nicaragua goes communist it may attain many virtues, but low infant mortality rates and rapid economic growth will not be among them. This point is confused in the short run by the fact that for a few years a Nicaragua may do very well, as it forces its people to adopt modern sanitation and sewers and gives everyone shots for the more virulent and preventable diseases. The believers then point with pride to the glories and successes of the system-but wait 10 or 15 years. The easy things will have been done and dedicated doctors will not be able to communicate with outsiders. How long will it be before stagnation and decline set in? The Albanians know, but they are not talking. Dammit, you marketers end up winning for all the wrong reasons! There is one more thing you marketing people inadvertently gave the world. It is intimately connected with all of the points raised here. People doing business at a rapidly increasing rate do not fight. One really big surprise of the postwar era has been that historic enemies, such as West Germany and France, or Japan and the U. S., have not had the remotest threat of war since 1945. Why should they? Anything Japan has that we want we can buy, and on very easy credit terms, so why fight for it? Why should Japan fight the U. S. and lose all those profitable markets? France and West Germany, linked intimately through marketing and the European Community, are now each other's largest trading partners. Closed systems build huge armies and waste their substance on guns and troops; open countries spend the money on new machine tools to crank out Barbie Dolls or some such trivia. Their bright young people figure out how to tool the machines, not how to fire the latest missile. For some reason they not only get rich fast, but also lose interest in military adventures. Hong Kong has become so valuable be-
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cause of its manufacturing software (e.g., the knowledge in the minds of its able people) that the PRC cannot take it over, even though it has a legal right to the place. Japan, that peculiar superpower without superguns, confounds everyone, simply because no one has ever seen a major world power that got that way by selling you to death, not shooting you to death. In short, if you trade a lot with someone, why fight? The logical answer, you don't, is perhaps the best news mankind has had in millennia. The potency of the total marketing approach as applied to poorer countries has had the effect of making many countries reconsider their strategies. The PRC, eyeing Hong Kong and Taiwan, now has trade zones with rules similar to the ones in those countries. It also has dramatically liberalized its marketing internally, mainly in agriculture, with the result that for the past few years it has had a 10% real GNP growth per year. India relaxed some of its more onerous internal controls starting in 1981 and since then has doubled its growth rate from 3% to 6%. Both of these countries, incidentally, have experienced worse ads, more mindless consumerism, and all the other manifestations of decadent consumer behavior found in rich countries, which makes them nervous. In the end, however, more beats less every time, even at the cost of vulgar billboard ads and mindless rock music. All over the world, exotic countries are playing with the idea of setting up totally export-oriented industries for the rich countries, following the model described before. Those countries that have stuck to the Marxist, antimarketing ideology are in bad shape and getting worse. The low incomes and dullness are less bothersome than the human welfare results, which disturb serious and moral people. If a country closes off marketing channels, it also closes off medical information channels and people die. Of course, if the leader gets sick, he flies to England or the U. S. for treatment . . . one wonders where the morality really is. In 1967, the world was rotten to the core. In 1987, it still is. Yet, somehow, millions live who would have died back then. The savage world wars that ravaged the first half of this century have vanished, to be replaced by petty affairs between Third World closed systems, full of sound and fury, but signifying nothing. The real action in the 1980s ends up, ironically, in some small factory in Taiwan, where dark Chinese girls carefully assemble blonde Barbie Dolls to be enjoyed by occidental girls they will never meet. A long time ago, the U.S. set in motion an international economic order (Farmer 1985) that somehow evolved into a world marketing system, involving such improbable participants as South Korea and Taiwan, to say nothing of West Germany, Haiti, and the Cayman Islands. Somehow world population has more than doubled
since 1950 and average per capita incomes also have more than doubled. Most of the gains went to those improbable and immoral places that insisted on doing what foreign consumers wanted, not what their own glorious traditions and cultures wanted. All they did was get rich-and live. Everyone is probably just as unhappy as they were back in 1967, but you, as an American, now have eight to 10 additional years of misery to suffer as a result of medical advances. The Taiwanese have more than 20 extra years of life expectancy each to bemoan their fate and wish that they lived in the right kind of world, the one that used to be. The years roll inexorably by, and now your granddaughter comes home from college with her newfound friend, David Chen. He is a bright Taiwanese marketing student, planning to go home to help the family firm in its U.S. marketing. The firm now has $100 million per year in sales, up from $1 million or so 20 years ago, and Papa Chen is annoyed that U.S. merchandisers are taking all the distribution profits. He thinks that if Toyota and Sony can do it in the U.S., so can he, so young Mr. Chen will be trying to figure out downstream proprietary marketing channels for the 1990s. Granddaughters are so much more fun than daughters-you have all of the pleasure and none of the responsibilities. So, when your charming granddaughter suggests, oh so delicately, that David Chen might be Mr. Right, what do you say? You think back across those many years, vaguely recalling that Taiwan was liberated from the Japanese only in 1945; you recall the racial stereotypes of your youth; you remember when U.S. stores were full of U.S.-produced, low quality, high priced clothes, electronic products, and toys; and you sigh. Verily, this new world is not the one you remember! You recall watching, as a young soldier in the Army of Occupation in Japan, desperate people eating out of your garbage cans. How could such persons design and build that fantastic Toyota you have in your driveway? Being a marketing person, you may even understand. In the end, and how I hate to admit it, marketing may well be the most moral field gf all. What other discipline not only saves lives, but minimizes wars? And the beauty of the whole game is that no one even knows this, or why it is demonstrably true. Your liberal nextdoor neighbor wants to ban Saturday morning commercials and he cites those endless and ancient moral arguments that you have heard for 40 years or more. Somehow those arguments never seem to include what happens to that young, not very bright or well educated Chinese girl, carefully hand painting the lips on those damn Barbie Dolls for $2.00 an hour, up from 20 cents an hour just a decade ago. Somehow those eloquent arguments never ponder the might-have-beens, such as an India that could have
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played marketing and got rich instead of being moral and staying pretty poor. Besides, how many other young men do you know who will inherit a $100-million-a-year, going on $200-million, business?
So you sigh, and take a walk with your granddaughter, and you say, "Honey, you see, it's this way. "
REFERENCES Chu, David K. W. (1985), "Cost Effectiveness of General Hospitals Under Two Different Hospital Reimbursement Systems: An International Study of Hong Kong and Indiana," unpublished doctoral dissertation, Graduate School of Business, Indiana University, 71. - - - (1987), "Welfare Management in Free Enterprise and Socialist Economic Systems: A Study of Six Countries," in Advances in International Comparative Management, Vol. Ill, Richard N. Farmer, ed. Greenwich, CT: JAI Press. Farmer, Richard N. (1967), "Would You Want Your Daughter
to Marry a Marketing Man?", Journal of Marketing, 31 (January), 1-3. - - - (1977), "Would You Want Your Son to Marry a Marketing Lady?", Journal of Marketing, 41 (January), 1518. - - - (1985), "Hong Kong or Albania: Which Trade Strategy Should the U.S. Adopt?", Business Horizons (November-December), 2-8. Pollay, Richard W. (1986), "The Distorted Mirror: Reflections of the Unintended Consequences of Advertising," Journal of Marketing, 50 (April), 18-36.
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