Five years have passed since the release of “Marketing 4.0,” which also triggered the birth of transcosmos’ (hereafter referred to as “our company”) “5A Loyalty Diagnosis” service. The latest book in the series, “Marketing 5.0,” was released in Japanese on April 20, 2022. Marketing 5.0 discusses generational and social challenges in the digital society and new tactics for utilizing marketing technology. In this series of articles, we will provide a chapter-by-chapter overview in an easy-to-understand manner.
In Part 3, we summarize the “wealth polarization”.
According to the World Inequality Report 2022 published by the World Inequality Institute, the wealth owned by the world’s top 10% of richest families accounts for 75.6% of all wealth, while the wealth owned by the bottom 50% of poorest families is only 2% of all wealth. One of the world’s most challenging problems is this widening wealth gap. Today, the use of technology for Marketing 5.0 to work is too concentrated on the wealthiest, the top tier, and this needs to change. This presentation will explain the nature of this challenge of social polarization and what companies can do about it.
Polarized society arising in all aspects
“Marketing 5.0” notes that one of the main challenges facing marketers is extreme polarization in everything from employment to ideology, lifestyle, and markets. First, in terms of employment polarization, both high-value, high-wage jobs and low-value, low-wage jobs are increasing, while the middle class is shrinking. Furthermore, as the new corona epidemic drags on, the employment environment is worsening for lower-wage workers, and wealth is concentrated in the hands of the wealthy, who are the beneficiaries of high stock prices, a phenomenon that is spreading worldwide. Next, in terms of ideology, political polarization is accelerating, as in the two-party system represented by the United States, where people’s lifestyles and interests are influenced by their party affiliation. And in terms of lifestyle, what is pointed out is the polarization in consumption. One is income, and the other can be described as a difference in values that clearly distinguishes between things to save and things to spend money on. This consumption behavior is also said to be greatly influenced by the Corona Disaster, and Japanese tidying consultant Marie Kondo’s name is introduced in “Marketing 5.0” as a representative of the minimalist approach. Finally, accompanying the polarization of lifestyles is the polarization in the marketplace, which is beginning to split into two extremes. As with employment, the in-between segment is disappearing, and people are reportedly shifting toward either thrifty products or more upscale and luxurious goods.
All this polarization, in addition to the income inequality that has developed over the last decade, has been further accelerated by the corona disaster that has spread around the world since 2019.
Sustainable Development Goals and Company Strategies
The role of corporations is crucial in halting the widening wealth gap and improving society. In addition to the issues raised in this chapter, humankind faces numerous other problems such as conflicts, climate change, and infectious diseases. The Sustainable Development Goals (SDGs) are specific goals to be achieved by 2030, proposed to promote coordinated action around the world. The SDGs can be seen as a global collaborative platform that brings together governments, civil society, and businesses.
While the tenth goal of the SDGs is to “Reduced Inequalities within and among countries,” corporations are partially responsible for the unequal distribution of wealth. The market expects companies to be actors in solving the problem of the gap between rich and poor through a more inclusive and sustainable approach to the pursuit of growth. The role of companies in this vision is clear, and they can help integrate these goals seamlessly into the lives of their customers by incorporating the SDGs into their marketing and other business activities.
When looking at the 17 goals of the SDGs, people tend to be a bit overwhelmed, especially when it comes to the more lofty goals. Companies need to take the lead in making these less familiar goals commonplace in the lives of their customers. For example, financial services firms could target poorly addressed markets and use financial technology (fintech) models to promote financial inclusion. At the same time, they should be able to support and promote sustainable investments by financing renewable energy development and avoiding investments in projects that degrade the environment. Manufacturing companies would contribute to sustainability by adopting circular economy models that emphasize reducing, reusing, and recycling production materials. They can also contribute to economic inclusion by recruiting minorities and involving small businesses in their supply chains.
Marketing consistently with the SDGs will help address the problem of social polarization through better distribution of wealth. This means that companies will be able to create an economy where the middle class is revived. In other words, companies need to work to restore society to its original shape by playing a role in the economic model that will revive the middle class. Consider which of the target categories are relevant to your business and can be incorporated into your marketing efforts.