Olalekan U. Asikhia
Keywords: Marketing activities; resource-use efficiency; wealth creation, quality of life
Marketing includes all activities from the conception of the product to the point of arrival of the conceived product at the door steps of the consumer. Marketing encompasses efficient allocation of resources to create wealth, and promises economic growth and development through enhancing the general welfare of the society. Marketing, through exchange processes, improve the distribution of income between sectors of the economy as well as maintain some stability of supply and demand for marketed goods. Investment in improved distribution networks of goods and services has the potential to create time and place utilities and hence create wealth and enhance perceived life quality. A high standard of living could not be delivered without a large retailing component in the marketing system (Hollander, 1987). Elements of marketing promotions have been found to have positive effect through increased information in the marketplace (Zinkhan, 1994). However, there may also be negative effects in terms of repetitive or irritating nature of advertising. When organizations use deceptive means to stimulate patronages through increase in demand, they reinforce certain negative stereotypes, and create dysfunctional cultural values; marketing communications could conflict with the attainment of high living standards that national development represents in this light (Samli, Sirgy, and Meadow, 1987).
Despite the importance and relevance of marketing to national development, empirical relationship between marketing activities and national development is largely unexplored, nor has any study examined the interrelations among development correlates in a multivariate setting. This research fills this void by testing a model that incorporates marketing and quality of life (as a variable for national development). Most importantly, this research is to discover if marketing activities can explain something beyond what traditional explanatory variables can contribute.
The purpose of the study is twofold. First, model of standard of living that includes major quality of life research item is tested. Second, the effect of marketing variables in bivariate (i.e.
correlation) and multivariate (i.e. structural modeling) context is investigated. Specifically, the extent to which marketing intensifies or relates to quality of life is explored.
Conceptual framework and hypothesis development
Kotler (2006) sees marketing as a process of exchange between individuals and or organizations that brings satisfaction to the two parties in terms of attainments of goals and objectives in the case of one and fulfillment of needs and aspirations in the case of the other. Marketing encourages encapsulations of ideas packaged in form of products by one individual and sold to another who has a need that this product would fill. In other words, there are groups of individuals whose needs are waiting to be fulfilled. This group of individuals is known as the market. In the presence of a market, an individual can specialize in one activity and sell his/her surpluses in order to purchase other needed goods. The individual is likely to specialize on the basis of a comparative advantage, in that activity for which he or she has some special resources (as provided by the country) or ability, as naturally endowed. A comparative advantage exists when an individual or region can produce, for example a food cheaply relative to the price of other foods, or more cheaply than other individuals from other regions. A nation is able to specialize and produce goods in areas of comparative advantage because individuals within the nation had done so. When there is exchange of goods across borders of nations, this is actually occurring between individuals who had specialized in the production of these items or nations which composed of individuals.
H1: Marketing activities relate positively with comparative advantage.
Marketing through the process of exchange is considered as a strategic factor in the economic structure of any society. This is because it directly allocates resources and has a great impact on other aspects of economic and social life (Abbott, 2003). As markets and economies develop, surpluses occur more frequently in profitable activities creating new wealth, while products are moved greater distances than before,precipitationg into enhanced resource-use efficiency and trade. It is thus hypothesized that;
H2: Marketing activities relate positively with resource-use efficiency and trade, and also
H3: Marketing activities relate positively with wealth creation.
Marketing creates satisfaction by facilitating the delivery of products and services, and hence has a positive impact on society as a whole. Sirgy (1991) notes that marketing delivers goods and services that can satisfy unmet needs in such a way as to enhance life quality. Advertising has been used for promoting desirable social aims (e.g. savings and investing, family planning, technological change, innovation and knowledge) disseminating information (MacBride 1980), promoting optimistic perception of life, and stimulating economic activity (Samli, Sirgy and Meadow, 1987).
A wide retail network grants the consumer convenient access to goods and services. So marketing can be channeled towards influencing social objects (e.g. products, services, ideas) that enhances standard of living. Morris and Lewis(1991) summed it up that the functional effects of business activities on standard of living include greater economic vitality (e.g. better quality of life) as a result of increases in Gross National Product (GNP) and job creation. Marketing activities such as fair pricing, product innovation and development fitted to satisfy consumers needs better, distribution network that makes the product to be available to consumers in their areas of convenience, as well as effective marketing communications will likely produce improved quality of life and hence higher
standard of living for the society. It is therefore hypothesized that:
H4 : Marketing activities are positively related to national development.
profile shows higher growth and higher inflation, but less income per capita.
Capitalism, industrialization and modern marketing have emerged in Nigeria especially with the democratization process that has facilitated foreign investment and participation in the economy.
Table 1: Comparative statistics for the US and Nigeria-2004
Source: World Development Indicators (2006)
Gaski and Etzel’s (1986) Index of Consumer Sentiments towards Marketing (ICSM), used to measure evaluation of marketing practices by the citizens and the marketing linkage to comparative advantage, resource-use efficiency and trade and wealth creation was developed. The ICSM was used because it offered researchers a widely acceptable and readily understood approach to gauge citizen experiences as a society. The ICSM is a composite of four multi-item Likert-type scales each corresponding to one of the four elements of marketing practice such as product, price, promotion and place. Wilkie (2006) used a large-scale sampling with a response rate of 53.8 percent, he collected the ICSM data in order to establish an understanding for the effectiveness of businesses in a society’s aggregated marketing system (AGMS).
The work of Lee et al (2002) showed an empirical support for quality of life being an important consequence of citizen’s standard of living which is a direct measure of national development. Multi-item measures of subjective
quality of life have been used with success in international research. For instance, Diener et al. (1985)’s satisfaction with life scale (SWLS) has been widely employed in psychological research and has consistently displayed good reliability and validity (Burroughs and Rindfheisch, 2002). It has also been used in other nations of world like China, Australia, Turkey and the United States (Diener and Suh, 1999).
The SWLS is a five-item measure that is intended to measure cognitive aspects of well being and includes such item as “ In most ways my life is close to my ideal: and “ so far I have gotten the important things I want in life”. All items in the study were measured using five-point Likert-type scales. There were 39 items in all. Prior to survey administration, the research instrument was pretested with fifteen undergraduates’ at Covenant University; Ota, Nigeria, and adjustments were made to improve clarity of the wording of some questions. The survey was administered at several locations in major cities of the country. Quota sampling based on age was used. A judgmental sampling procedure was used by field workers to fill the quotas that would ensure a broad cross section of Nigerians.
Table 2: Demographic characteristics of the sample (N = 254)
Common factor analysis was conducted with a pooled set of thirty –nine items, which included all the items measuring Marketing activities, Comparative advantage, Resource-use efficiency and trade, Wealth creation and Quality of life. The common factor analysis result for Comparative advantage, Resource-use efficiency and trade, and wealth creation was used to ascertain the degree of reliability and validity of the research instruments since the research items were newly introduced for this study. Four criteria for satisfactory results in construct identification and theory testing were employed as follows: (i) Reliability (Cronbach’s & 0.7), (ii) Validity (Factor loading >0.4, with a simple structure amongst the factors) (iii) Overall model fit (CIF, TLI, GFI >0.9, RMSEA, SRMR < .08), and support for hypotheses (P< .05).
Covariance analysis using AMOS 5.0 was then used to evaluate the factor structure of the twenty MAC items and to estimate the CAD, RUET, WECRE, and QOL constructs in a confirmatory factor analysis model. AMOS 5.0 minimizes a fit function between the actual covariance matrix and a covariance matrix implied by the estimated parameters from a series of structural equations for the confirmatory factor analysis model. These incremental fit indices compare the proposed model to a baseline or null model. The comparative fit index (CFI) (Bentler, 1990) and the Tucker – Lewis Index (Hair, Anderson, and Tatham 1991) suggested that the comparative model fit is excellent with a CFI of 0.97 and a Tucker-Lewis Index of 0.96, following Steenkamp’s protocol, the GFI statistics (0.94) and the RMSEA (.043) and the SRMR (.081) were evaluated. Each of these indicators suggested that a good model had been identified. The loadings of manifest indicators on their respective latent constructs are shown in figure 1 and all exceeded Steenkamp’s criteria of 0.4 for factor loadings. All coefficients in the confirmatory factor analysis model were statistically significant at P= 0.05. Figure 1 shows the results of the modeling along with the correlation of MAC, CAD, RUET, WECRE with QOL. All revealed path coefficients are statistically significant at P= 0.05.
Table 3: Reliabilities for the constructs in the final model
Marketing Activities (MAC) Cronbach’s a=.89
appropriate goods for my needs.
performance or needs mismatch is low.
Promotion Cronbach’s a =.77
satisfaction with a number of producers.
Comparative advantage (CAD) Cronbach’s a =.71
Resource-use efficiency and trade. (RUET) Cronbach’s a =.73
Is less than its benefit in Nigeria.
Wealth creation (WECRE) Cronbach’s a =.75
National development (Quality of life) (QOL) Cronbach’s a =.84
Table 4: Correlation of items for marketing activities, comparative advantage, resource-use efficiency and trade, Wealth Creation and quality of life
The first research question of this study focused on the relationship between comparative advantage (CAD), resource-use efficiency and Trade (RUET), wealth creation (WECRE), and marketing activities (MAC). This is answered by reviewing figure 1. As shown in the figure CAD, RUET and WECRE relates differently with marketing activities. For example, WECRE receives important contributions from MAC dimensions with strongest standardized path coefficients of ( β = 0.64) and it relates with QOL with ( β =0.352 ), and MAC contributes to RUET with( β =0.61), and then to CAD with ( β = 0.18), and finally general marketing activities has ( β =0.73) contribution to QOL. In this way, the first research question is answered. As noted from figure 1, there is a simple structure among the items with each construct measured by its own set of items.
The simple structure gives evidence for both convergent validity and discriminant validity as the proposed items for each construct load on the respective constructs and do not load on the other constructs (Bagozzi, Yi, and Phillips, 1991). The confirmatory factor analysis model suggest convergent validity of the items included in the model because the items of the same constructs share relatively high degree of the variance of
their respective underlying constructs, as indicated by the factor loading being statistically significant at P = .05, the internal consistency of each construct is also evidenced by the face validity or conceptual relatedness of the items. In all, these results suggest compelling evidence for the underlying structure of the relationship of MAC with CAD, RUET and WECRE. The second research question focused on the relationship between marketing activities (MAC) and National Development measured in terms of quality of life (QOL). Discriminant Validity for each constructs in the final model is suggested by the items for each construct having factor loadings which are not statistically significant at P=.05, with conceptually similar, but distinct constructs (Bagozzi, Yi, and Phillips, 1991). In other words, the items representing one construct do not also represent another construct to a high degree. Therefore research question two is answered in affirmative as the second order factor MAC and the QOL construct manifest the same discriminant validity for each other as they do for product, place, promotion and price. One can thus say that, MAC and QOL have a strong and positive relationship. This is a major contribution of this study.
Table 5: Result of the hypothetical relationships.
It shows that that the weakest relationship exists between the marketing activities and comparative advantage with a standardized path coefficient β =0.18 and that a strong and significant relationship exists between marketing activities and quality of life of the citizens. Resource-use efficiency and wealth creation also relate well with marketing. These with the model in figure 1.0 further show that comparative advantage (CAD), resource-use efficiency (RUET), and wealth creation (WECRE) are good intervening variables of marketing – national development relationship; this is another contribution of this study to the body of knowledge.
The positive and strong relationship between marketing activities and quality of life concurs with the opinion of Sirgy (1991) that marketing actually delivers goods and services that can satisfy unmet needs in such a way as to enhance life quality and Samli, Sirgy and Meadow (1987) who established that as marketplace experiences improve or expand, quality of life increases. And also Lee and Sirgy (2004) assert that from a macro level perspective, marketing activities can be designed to deliver quality of life and they called for a new approach to identify healthy marketing practices that contribute to life satisfaction, with efforts being made to
minimize the extent of negative influences of marketing practices, as identified by Pollay(1986) as; promises that shape consumers’ life outlook which are not real, promotion of false materialism, repetitive exposures of adverts, telemarketing’s intrusion in to people’s leisure time.
future theory development efforts of MAC, CAD, RUET, WECRE and QOL. The nomological network for the constructs of this study can be better understood within the context of the full structural equation model where certain constructs would be posited to be casually antecedent to other dependent constructs – these may be a study for future research.
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