Editorial—Does Good Marketing Cause Bad Unemployment?

Abstract

Questionable methods for increasing nominal wages reduce real wages (i.e., buying power) by creating inflation, shortages, lower quality, and long-term unemployment. To increase real wages (i.e., the ability to buy more), economic principles prescribe increasing productivity (i.e., greater output from less input). In contrast, marketing principles prescribes increasing the value of output (i.e., greater customer benefits) through innovation. Beyond increasing real wages, innovation spawns new occupations better matching individuals with skills and providing greater nonmonetary benefits (i.e., job satisfaction). Unfortunately, threatened entrenched incumbents often solicit protectionist legislation claiming negative externalities (e.g., short-term unemployment, lower wages, and burdens on society). Innovation does require labor to move from inferior to superior organizations (i.e., unemployment). However, protectionism only delays and dramatically aggravates the inevitable trauma associated with progress, as worker skills, firm practices, and buyer welfare fall further behind. Recent attacks demonizing Wal-Mart (e.g., the dubious Vlasic pickle claim) epitomize this situation—they are archaic vanilla protectionism, menacing both imperiled consumers and every consumer-driven business.

How does product program innovativeness affect customer satisfaction? A comparison of goods and services

“…The similarities of goods and services in terms of the fulfillment of basic utilities repeatedly have been addressed in services marketing literature (e.g., Alam 2006;Ali et al 1995;Shugan 2007).…”

Commentary—Relevancy Is Robust Prediction, Not Alleged Realism

“…Forty to 55 million rural people starved to death because of Chinese military and political leader Mao Zedong's Great Leap Forward program (Thaxton 2008, p. 2), which tragically replaced a market-driven agricultural economy with a centrally planned economy (Bachman 1991, p. 2;Smil 1999). As noted by numerous empirical researchers (most notably, Amartya Sen), similar efforts including the seemingly innocuous regulations on food production caused similar disastrous consequences in other countries (Sen 1981, Shugan 2007c. Remarkably, the intention of the Mao's Great Leap Forward program seemed very noble.…”

Findings—Innovations' Origins: When, By Whom, and How Are Radical Innovations Developed?

“…Innovation is a primary determinant of company success and consumer welfare (Shugan 2007, Solow 1957. Thus, companies devote billions of dollars each year to researching and developing new products.…”