Business Times

Behavioural Economics or Social Marketing? The Latter!

By Philip Kotler

When it comes to efforts to influence the behaviour of other people - such as smoking, drink driving, drug abuse, obesity, wasting water, wearing seat belts - we have the whole sciences of psychology, social psychology, sociology and anthropology to guide us. We expect these sciences to shed light on the underlying “causes” of different behaviours, and this presumably will help us arrive at better “cures.”

Philip Kotler

The latest science to claim answers comes from economics, strangely, in the idea of “behavioural economics.” President Barrack Obama is described as being guided by behavioural economists in planning his many reforms. Behavioural economics is a radical challenge to classical economists’ assumption that persons are highly rational in their decision making. Through dozens of laboratory experiments, Dan Ariely and other researchers have shown that most people do not make the “rational” choice that would best serve their interest.

These findings were enough for the Committee of the Nobel Prize in Economic Sciences to award the 2002 prize to Daniel Kahneman and Vernon L. Smith for their research and laboratory experiments concerning human judgment and decision-making under uncertainty.

Suddenly “do gooders” began to see behavioural economics as mankind’s answer to improving human behaviour. Thaler and Sunshein published a popular 2009 book called Nudge: Improving Decisions About Health, Wealth, and Happiness. Other books followed.

There is only one catch. Behavioural economics does not come with a rich tool box for influencing individual and group behaviour. Aside from recommending “nudging” and “reframing” as influence strategies, it has little more to offer. Behavioural economics is mainly interested in demonstrating the irrationality of human decision making, not finding a more comprehensive system to influence individual and group behaviour.

Kotler in Sri Lanka
Philip Kotler, globally regarded as the godfather of marketing, is presenting two forums for the marketing fratenity and CEOs on June 6 at the Waters Edge organised by the Sri Lanka Institute of Marketing with the Sunday Times being one of its media partners.

In fact, behavioural economics (or “behaviour decision theory” – BDT) is actually a branch of marketing, much to the chagrin of classic economists. Classic economists have never admitted “marketing” into their search for truth. The role of advertising, distribution, and promotion in influencing individual behaviour has never been modeled by classic economists where their preference is to explain all behaviour as a response to price. Human decision-making is largely viewed as an exercise in calculating the financial benefits and costs of one behaviour versus another.

Now that this foundation for classic economics is undermined, economists have no alternative than to turn to marketing and consumer behaviour theory to understand the marketplace. “Behavioural economics” is simply another word for “consumer behaviour theory” as used by marketers.
Of more interest to the question of influencing social behaviour is the branch of marketing known for the last 40 years as “social marketing.”

Social marketing is a process that applies marketing principles and techniques to create, communicate, and deliver value in order to influence target audience behaviours that benefit society (public health, safety, the environment, and communities) as well as the target audience.

Social marketers not only use downstream measures to influence a person’s behaviour but also upstream measures to influence new legislation and cross-stream measures to influence other peers in the person’s circle of influence. Social marketers use a 10-point process to guide the planning of every behavioural change campaign.

Social marketing has been used and recognized by governmental and non-profit agencies, including USAID, Centre for Disease Control (CDC), World Bank, and many other organizations and countries (Sweden, Australia, etc.) and U.S. States. It has yielded successful results in such areas as:

  • Reducing tobacco use
  • Encouraging more physical activity
  • Reducing tuberculosis
  • Reducing obesity
  • Reducing malaria
  • Increasing contraceptive use
  • Reducing drink driving

So the bottom line is that those who want to influence social behaviour for the good of the individual and the society need to apply social marketing thinking, a much larger system than “behavioural economics.” President Obama is taken with the idea of behavioural economics partly because it came out of his home base in Chicago and offered a way to support his various initiatives in health care, environmental protection, and so on. Now it is time for him to recognize a worldwide fraternity of social marketers who have been creating success stories for 40 years to discourage smoking, drug abuse, overeating, and so on.

Given that commercial marketing has been so powerful to influence our choice of products and brands, why not turn to social marketing for effective answers to our current social problems. Michele, we would love to help you defeat the problem of child obesity.

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