About twenty years ago, I hosted a
Chinese engineer who was visiting the United States on a work swap program. He
had been sent here to learn about auto manufacturing at GM plants and to take
what he learned back to China where GM was establishing a manufacturing
presence. It was the first time I had interacted with someone who had grown up
in a socialist economy and the first time he had experienced capitalism at
work. One of the things I remember about his month-long visit was his
fascination with the amount of choices that Americans had. He flipped through
channels on the TV just to count all of the cable channels. He went to the
store just to marvel at the number of items that were for sale like he was
walking through the Smithsonian. He ate every day at a Perkins restaurant, even
though there were many other choices nearby. Perkins offered more food choices
than he had ever seen in his life. I think he eventually ordered everything they
had on the menu.
Over the past two decades since his
visit, China has eased back on hard line socialism and moved closer to a
free-market society. Their people are given more choices now than at any time
during Communist rule. In fact, since 2010, GM China has sold more vehicles
than its U.S. counterpart1. Who would have guessed two decades ago
that there would be more new Chevrolets on the roads of Shanghai than there
would be in Detroit. It is estimated that GM China will continue to increase
production and is projected to sell over five million vehicles by 2015 – twice
what is projected to sell in the U.S.
Back in the days when my Chinese
visitor was staying with me, I heard someone say that China would slowly grow
more capitalistic and the U.S. would grow more socialistic. I would not have
believed it then, but look at where we are now. Our economy is having a hard
time getting up off the mat, in large part because socialist ideals that have
become attached to our society like barnacles clinging to the bow of a ship.
Listen to what is happening at protests on both sides of the political
spectrum. There are political rallies calling for the end of borrowing and
spending more than we are taking into the U.S. Treasury. On the other side,
there are demonstrations for big business to pay more taxes to pay for school
loans and universal health care. It is the polarizing debate that has fueled
wars and trade embargoes: Capitalism versus Socialism.
Where does marketing fit into all of
this? When people are given a choice, marketing becomes the key to surviving
and thriving in a capitalistic, free marketplace. It is the fuel that keeps
your product in front of consumers and makes customers of them. Capitalism lets
the market decide who the winners and losers should be. It drives competition,
motivates companies to develop new and better products and services, and pushes
customer service to make sure the client is happy with their purchases.
Socialism takes choices away from the consumer and leaves it in the hands of a
centralized, controlling group - typically the ruling party in government. If
your business finds yourself on the outs with the centralized agency, you are
out of business. As those choices are narrowed, business growth is hampered.
Who would research and develop a new product or service if the government will
limit its production or determine that it is unacceptable? When choice is
limited or mandated by the government, it squelches the impact of marketing. As
an example of this, U.S. sales of GM vehicles fell over 25% from 2008-20101.
What happened at GM during this time? The federal government took over the
struggling automaker, did away with several of their model offerings, and
pushed the production of fuel-efficient cars which was not driven by market
forces but by a political agenda. At the same time, GM China was increasing
sales, which rose 214% from 2008-20101.
Communist China’s leadership did not
become more capitalistic because they had a sudden altruistic moment and felt
the need to empower their people – far from it. They are still a totalitarian
regime that suppresses free speech, religious freedom and public assembly2.
They turned to capitalism to survive. They saw the demise of the Soviet Union
as it crumbled under a socialist economy that had left it bankrupt. China
realized it had to change or face the same fate. What companies like GM saw in
China was a massive market. There are 1.3 billion Chinese – four times the size
of the U.S. population. They account for 18% of the world’s population. And
this was a market that was hungry for something they had not had before: a
choice. When there are free-market choices, marketing works to help your
business excel.
If the U.S. continues to slide
toward socialism, marketing will not work. So what do you do about it as we
turn the page to 2012? First of all, become active in voting for pro-capitalist
politicians and hold their feet to the fire. It has been too easy for our
elected representatives to sell our future off in trillion dollar increments. Secondly,
become aware of the creeping impact socialism is having on your own bottom
line. You are seeing it from higher prices of consumable goods to hidden taxes
in what you pay for daily. Thirdly, educate those around you. It baffles me
when I talk to people who expect the government to do everything for them. Help
people take pride in moving ahead in life by their own hard work. Realize there
is a day of reckoning on the horizon and we must decide if we are going to move
ahead or be taken over by the darkness.
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1. General Motors http://en.wikipedia.org/wiki/General_Motors
2. Voice of the Martyrs,
http://www.persecution.com
The World Bank,
http://data.worldbank.org
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