Episode 81
Marketing is BIG business and it’s EVERYWHERE!  Whether you’re checking your media feed, doing your online banking, or driving down the street, you’re being influenced by marketing.  On this episode of GMR well share ways marketing pushes you to spend beyond what’s good for you and what you can do to overcome their influence.

SHOW NOTES
 

We are more connected today than ever before.  We can talk to anyone from across the globe, even have a face to face conversation and share what’s happening in our lives in an instant.  Social media platforms have made it extremely easy to stay connected to EVERYBODY. And advertisers know this. So, they are using those places where we hang out to entice us to buy their products.

We must shift America from the needs to a desires culture, people must be trained to desire, to want new things even before the old have been entirely consumed. We must shape a new mentality in America, man’s desires must overshadow his needs.”
— Paul Mazur (Lehman Brothers)
“It is generally understood in our industry that we aren’t fulfilling wants and needs – we are creating them. A new product first needs to create a market for itself, before it can be sold into it.”
— Ad Agency Executive
“The biggest companies know people buy feelings, not things”.
— Tony Robbins

2019 Modern Wealth Survey

 

According to the survey:

  • Three in five Americans pay more attention to how their friends spend compared to how they save.

  • An equal number saying they’re at a loss to understand how their friends are able to afford the expensive vacations and trendy restaurant meals they portray on social media.

  • The pressure to spend as a result of social media envy and the desire to not be left out of friends’ experiences is particularly acute among Generation Z and millennials.

Financial decisions are influenced by friends’ showy social media feeds

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Marketing Strategies that companies use:

  1. Anchoring or Instant Markdowns 

    • "Retail price $139.99. Our price $49.99."  

    • "In Denmark, you can't advertise a 'before' price if it hasn't been sold for that price in your own shop for at least two weeks," the user wrote. "If you keep selling the product as this discounted price, then this price is considered the before price if you advertise that product again."

  2. Expensive Decoys

    • The most expensive item on the menu that no one actually every buys.

    • Makes everything else feel cheaper in comparison, people think “at least I didn’t spend that amount”... and I shop at a high quality place.

    • $5, $6, $9 | Small, Medium, Large.

  3. The Loss Leader with Long Isles

    • Marketing a single product for super cheap, even to where the company loses money on that product, but then people wonder the isle of the store and end up buying a bunch of other over-priced products.

    • This pairs well with confusing architectural layout of malls or shopping areas… architect Victor Gruen, started making malls with layouts that disorient visitors, slowing them down with the goal of increasing their impulse purchases. 

    • Did you know that larger shopping carts, cause people to spend as much as 40% more. Grab a hand basket, instead of a shopping cart, it will make a difference on your bill.

 

Remedies – How to be Prepared to not fall prey to marketing

  1. Limit your exposure - Social Media, internet browsing, TV watching.

  2. Go on a TV fast.

  3. Pay for Commercial Free Services (might actually be cheaper in the long-run).

  4. Unsubscribe from useless e-mail lists. Use “Unroll.me” 

  5. Clean up your mailbox. Are you getting coupons and other magazines you don’t need sent to your mailbox every week? Use DMAchoice.

  6. Save your browser. Use Adblock Plus. You’ll get to surf the web without all those annoying ads.

  7. Be “Self Aware”

    • If you buy something you weren’t planning on buying only because of a discount, you’ve been fooled. And since the average American Household debt is $5,700 — a lot of people have been fooled.

    • All we have to do is look at how the average person’s garage, attic, or basement is running out of space. It’s full of times people have been fooled (they try to make up for it with “garage sales”, but by then it’s too late).

    • Don’t be fooled.

If something cost $100, and it is on sale for $75, and then you decide to buy it, you did not save $25. You spend $75.
— Mark Cuban

8. Make a plan (budget) and stick to it

  • Make a list before you go shopping

  • Make a list of people you need to shop for, then only buy for people on the list.

  • Ask yourself, is this a need or a want?

  • If it’s a want, then wait at least one day to purchase it. Most of the time the desire to purchase will fade in just one day.


Schwab’s survey shows that more than 60 percent of Americans who have a written financial plan feel financially stable, while only a third of those without a plan feel that same level of comfort. Those with a plan also maintain healthier money habits when it comes to saving:

Saving habits of planners vs. non-planners

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Investing habits of planners vs. non-planners:

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Despite the benefits of planning, Schwab’s survey shows that only 28 percent of Americans have a financial plan in writing. And among those without one, nearly half (46 percent) say it’s because they don’t think they have enough money to merit a formal plan, 18 percent say it’s too complicated, and 13 percent say they don’t have enough time to develop one.

Resources

Budgeting and Debt Elimination Tools
Jesus on Money by David Thompson - stewardshippastors.com
GMR 2: Creating A Financial Plan for Your Life Part 1
GMR 3: Creating A Financial Plan for Your Life Part 2
GMR 6: Breaking Down Budget Categories - Housing
GMR 7: Breaking Down Budget Categories - Food & Transportation
GMR 8: Breaking Down Budget Categories - Debt, Miscellaneous & Recreation
GMR 9: Breaking Down Budget Categories - Child Expenses, Personal, Saving & Giving