Andreasen, Alan R.

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Faculty Working Papers
SOCIAL MARKETING IN THE GHETTO
Alan R. Andreasen
#241
College of Commerce and Business Administration
University of Illinois at Urbana-Champaign

FACULTY WORKING PAPERS
College of Commerce and Business Administration
University of Illinois at Urbana-Champaign
April 3, 1975
SOCIAL MARKETING IN THE GHETTO
Alan R. Andrea 8en
#241
Paper to be presented to First International Social Marketing
Congress, Brussels, Belgium, June 6, 1975
•
' •
-l
SOCIAL MARKETING IN THE GHETTO
Alan R. Andre asen
Professor of Business Administration
University of Illinois
In recent discussions of ''social marketing' 1 in the United States,
two distinct definitions of the concept, have emerged. The first, most
closely identified with Philip Kotler is that social marketing is the
application of marketing tools to social issues.*" This definition aligns
the concept with the broader development of marketing applications in a
o
wide range of non-profit settings. An alternative definition often
•a
found in the work of William LazerJ is that social marketing is the
evaluation of marketing's impact on society in its traditional non-profit
business environment. It is not the purpose of this paper to debate
the "correctness" of either definition but to suggest that there are
clearly instances in which the two definitions intersect. One of those
intersections is the concern of this paper.
Marketing in the Ghetto
For several years, I and a of scholars in tfc i States
have been concernea with a p .ng systems.
This problem is that, despite ext 3 Lag affluence st
sectors of the U. S. economy, there remain sij Leant numbers of consum
who by virtue of their low income, old age and/or minority racial status
systemically obtain much less value in the urban market place foi their
consumer dollars than the rest of our society. Beginning with David
Caplovitz's provocatively titled book The Poor Pay More published in
-l963, a broad array of studies have demonstrated that at least in the
United States those whom I have chosen to call "the disadvantaged
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consumers" regularly pay higher prices for the same merchandl
purchased by the non-disadvantaged," -my higher credit rates and are
more often charged credit extras, " more c ire c
into "buying items they don't, need or merchandise more expensive than
they can afford," and find that the results of this market involvement
all too often lead thee, to the courts and to bankruptcy. As I have
theorized elsewhere," the sources of these difficulties are threefold
as suggested in Figure 1:
1. First, the socio-economic characteristics and attitudes he
disadvantaged are themselves a major source of difficulty. The dis-
advantaged have low arid unstable incomes which means they must see
higher cost credit sources and can less often buy items in lai
sizes or when they are on sale. The disadvantaged are often members of
racial minorities which means that even if they are not poor they must
live in ghetto areas where, as noted below, the market is competitively
weak, It means they will be discriminated against or feel they will be
discriminated against and this wil3 t 'strict their market all
And, of course, man;, of the are elderly and re
often physically and n Lnhibi :ope. Finally,
all of these socio-economic characteristics are associated with
and values such as a sense of powerlessness, a lack or faith in government
institutions that further immobilize the disadvantaged.
Figure 1 about here
2. Second, as noted above, the disadvantaged typically live in poor
areas where the marketplace is excessively atomistic: overstored, under-
capitalized, and poorly managed. This, in turn, means that costs of

operation are higher, stores smaller, ass< nts dr
physical and economic pli it. nt extev
movement of the affluent t : suburbs a to b« iramatically
worsening this situation.
3. Finally, in addition and often responding to, the two afore-
mentioned sets of inhibiting factors — the characteristics, attitudes
and values of the disadvantaged consumers themselves and the market
structure they face — the final source of difficulty and the o
often emphasized in the popular press is the exploitative behavi(
the merchants whom they mast patronize. Accounts of how these merchants
practice the "bait-and-seitch", the "fear-sell", the "turnover" and the
blank contract to bilk the unsuspecting consumer abound in both the popular
and scholarly literature in the U. S.^ A distressing feature of these
accounts is how frequently and how successfully the exploitative raerchai
are able to achieve their ends through the use of the legal system.
Clearly, of course, these three sets of forces interact. Indeed,
this interaction often produces a cyclical effect which I have elsewhere
I ;
termed "the cycle of consumer disadvant hat is, for example, the
consumer's lack of Income, unstable
induces the ghetto merchant to exploit himj overcharging 3dvl underservi
him. This, inturn, often overburdens the disadvantaged cc
to default on his debt. This default, directly or indirectly, may affect the
consumer's job status, thus, in a final turn of the cycle lowering his incc
making his job record even more unstable and further increasing his sense of
powerlessness. What may have begun as an attempt to marginally escape poverty
through material acquisition only serves to drive the disadvantaged consume

more deeply into h:
It is clear that
.
' Lar
segment of tl
other hard t he existence «
problem is relatively widely understood. So this r>r or
goal of the consumerism movement, at least as those
12
by the Consumer Federation of America. It is these attempts a
that, In fact, constitute social marketing in the ?:otlerian at
these attempts have been relatively unsuccessful in the United S1 Is
now generally well accepted. It is to an evaluation of this Lacfc of succ«
that we now turn, paying particular attention to ways in which consumer: «
approach to social marketing in the ghetto is . for pro*
faced by social marketing in other domair
Con
In the '- . -
consumer] ... - .
been that the
.) are to be helped <
out, is a phenomenon c ives tryii
the lot of tne have-nots. It is i ationsl ...
of which have manifested the \ . • ed at t'c
• g
:
a. the danger of misunderstanding

b. the danger of haste
c. the danger of
d. the danger o
e. the dangei
"•• The Danger of : ~-rsta..
A major problem for the middle clae seeking solution he
disadvantaged consumer' s problems is t.. e these proble
different from those they are f ar with only in degree an in
kind* It is true that the disadvantaged consumer's problems are
many respects different only in degree: they have relat y Isss
education, less income, larger families and so on. But their probler
are different in kind in four significant ways:
1. Disadvantaged consumers have not just lover inco
.riddle class but they have ii '.cat are very_ r
rarely- faced by the Le class. Tl
lack an essential ingr t for financial pis,
classes have. This lack of informal eans, for example, t ihey
often undertake debt they subsequently canr
at the point of decision the action sec
2. Those who are black, Indd erican face racial
discrimination -whicl le evidence that
discrimination at lea*.:. . even
advantaged who are e : 'cally rest-.
scope, subjecting them ligher interest rates, and so 03
3. The disadvantaged live in ghettos defined by race s
where the market opportunities are qualitatively different frorc the
by the middle class. Research has now well documented the fact that

market structures are domina" \x L, ran
stocked, poo i
*+. in many cases
shopping goal s than
considerate
outlets and door- rs be .
bring important social Lfications
The critical point to be made here • at the. ive
differences lead to mai ..ace behaviors wh
hers applying, as Louise Richards has,^ their own concepts ; .3d
financial planning view as "irrational, sunder*
an extremely poor basic for social.
The Danger c .
Dcspi
is rauc t
strategy ii . .
the pc
del:
behavior and :. :
areas. The spec-:
of suc v
consumers worse not better c "ace, .
3 • The Danger of Excessive Reliance on Legislation
As noted in Figure 1, the problems be disadi

roots in three g set.
legislation to cv itati- to merchant
middle class is often wont to do this ?x tripartite
foundation of the proble; .
**
• l"'he Danger of Excessive Anti-b
Reformers in social r'ting often see solutions as being facilitated
through attacks on "the establishment". They fail to see that ime
solution dimensions, the skills, money and time that can best be pro\
by ,:the establishment'* are essential. In the present instance, this is moi
dramatically apparent when one considers the problems involved
the market structure in disadvantaged areas.
5» The Danger of Overprotectiveness
The haves usually believe they know wiv best for the have -nots or,
not, they at least
ends. Hove-
; diss
participate
a. as alrf. reallj
loi
b. the di^ -aged
class;
c. further, 3t ovi "
be ing
d. perhaps i

- .
Summary e
taw
-
inherent u
i
We
3* We not let
excli
i
:

/1
i
a :
H 5
o
i
. . -.*

1. Philip . r and
Planned Social Che
pp. 3-12,
2. Philip KotL of Ma*
Journal of Marketing
,
Vol, 33? 1> (• •• PP- 10-15*
3» William Lazer, "Marketing's Cha- s," J
of Marketing , Vol* 33 » 1, (January
k» David Caplovitz, The Poor Pay More, (
?• i
stallment C: and Retail Ss.. t of C
Merchants (Washingt :'verni7ien- ;
illiam Kanselraan,
Poverty," ' 0.
7. See, for example, Warren G*
of the Marke
Davi [he Free Press
j
9* A
•
June 10, '.
10. St.-e Magnuson an , 0£.
11. Alan R. Andreasen, The Disadvanl
in press)
,
Aimer Federatio America, Policy Hesoli
Federc of America, July 21, I

13. Louise
Education and W
Ik, Alan R. Ar


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Social marketing in the ghetto / 241

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Social marketing in the ghetto / 241

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