Last Updated: November 23, 2020
Most business is organized around two parties—buyers and sellers.
The two sides meet in the marketplace to engage in free exchange; when the comparative advantage of the transaction is good for both parties, an exchange is made, leaving both parties better off than before.
This is all considered a success… until a third party enters the mix and changes the rules.
What is Megamarketing?
Megamarketing is the expansion of marketing beyond the buyer to third parties that influence (or block) transactions. These third parties include labor unions, cultural institutions, reform groups, banks, and—most significantly—governments.
It is particularly important in terms of international commerce, where national governments may enforce protectionist economic policies that block foreign companies from entering their markets. Such government policy represents a “third party” blocking business between buyers and sellers; therefore that party must be appeased (“sold”) in order for the desired business to take place. (See also International Marketing)
Although the term was coined in 1986 by the marketing academic Philip Kotler, marketing via politics is a far older practice. For as long as countries have established protectionist trade tariffs, powerful businesses and groups of businesses have lobbied for legislation that favor them. Today, however, most megamarketing literature is devoted to lobbying government to remove tariffs (and other barriers to trade).
However, a government tariff may represent only one of several barriers, or “gates,” that need to be opened, making megamarketing a much more extensive multi-party activity. For example, after persuading a government to lift a tariff, a company must next secure support from the unions who sought it in the first place.
For what kinds of customers is megamarketing effective?
The Candlemakers Petition
Satirizing protectionist tariffs in the 19th century, French economist Frederic Bastiat circulated a petition to protect candlemakers from the “unfair competition” of a foreign power—namely, the sun.
Although the satire was meant to expose the foolishness of protectionist tariffs, such tariffs continue to be lobbied for by industries today.
Megamarketing is directed not at the primary customers, but at the third parties that impact customers’ perceptions and ability to buy a company’s products. These include politicians, civil servants, regulatory agencies, special interest groups, national media, and opinion leaders.
In a potential market, there are some groups opposed to a business, some which support it, and many other which are uninterested. The megamarketing campaign aims to appease or persuade the opposition, rally supporters, and turn uninterested but potential supporters into allies.
Who implements megamarketing?
Influencing governments is no simple matter, and can easily cost more than a medium-sized company is even worth—megabucks, if you will. Consequently, megamarketing is primarily a tool for large firms with international operations, or for coalitions of firms that can jointly summon the political power necessary to make their case.
PepsiCo represents a textbook example of megamarketing in India (a market Coca-Cola had been pushed out of in 1977). In the 1980s Pepsi began a campaign directed at multiple levels of the Indian government, which had a variety of regulations and outright barriers that blocked made it difficult for foreign companies to enter or invest in the Indian market. Their first proposal to India involved facilitating the export of Indian drinks in exchange for the right to import Pepsi. After this was rejected in 1985, PepsiCo offered additional incentives to promote India’s economic growth. After three years of campaigning (including some 20 Parliamentary debates, 15 committee reviews, and 5,000 articles in the press), they finally obtained access to the Indian market.
PepsiCo’s megamarketing efforts did not there, however. In 1990, it actually lobbied for India against proposed trade restrictions in the United States. The U.S. backed off, and PepsiCo gained further goodwill with the Indian government. The company also continued to invest in establishing wells and other clean-water drinking sources throughout India.
However, the Indian government did not represent the only barrier to success. Just as recently as 2010, a political activist began a campaign attacking PepsiCo, claiming that the company served Indians poisoned drinks that they would never sell in other countries. Megamarketing efforts continue—involving now not only the government, but the Indian media and opinion leaders—in an effort to counter such attacks.
How is a megamarketing campaign developed?
Many tools are available to a megamarketing campaign, and employ use some combination or all of the following:
Barriers to Trade
- protectionist tariffs
- government regulations designed to favor incumbent businesses against new ones
- additional regulations that limit the number of options acceptable to both buyers and sellers
- non-party groups (such as reform organizations, labor unions, and activist groups) that reject the new business
- popular lack of understanding of benefits to potential buyers
- Lobbyists are specialists at representing a company’s interests to the appropriate government officials and agencies that affect that company’s business. Like lawyers who specialize in specific aspects of law, lobbyists are experts at knowing where in the government to monitor and message for greatest results. They may represent the interests of individual firms, or entire industries.
- Public relations refer to marketing that seeks to change the perceptions and opinions of the larger public—particularly in a democratic country, where such opinion is expected to influence government policy. However, it generally has less return on investment than direct lobbying. An example of this component of megamarketing would be oil companies’ advertising their environmental stewardship efforts or the jobs they create, aiming to counter some politicians’ narrative that oil companies are all greedy environment-destroying agencies that need to be increasingly taxed. (See also Public Relations Executive)
- Relationships with government agencies can be especially profitable in highly regulated areas, as it may enable companies to partner with agencies in the development, testing, and implementation of new regulations. For example, U.S. automakers worked closely with the Environmental Protection Agency to determine annual Corporate Average Fuel Economy (CAFE) regulations and set a schedule for implementation.
- Inducements and/or bribes. In countries with corrupt governments, market access may require both initial and ongoing bribes, which must be factored into the cost of doing business there. In free countries, direct bribes are more likely to hurt a business; however, inducements—such as an offer to develop a particular area, or the promise of jobs that will be created—may do much to influence the decisions of politicians seeking re-election.
- Political industry alliances can increase the overall power of a group of companies in order to open markets (or keep them closed for their protection); the benefits of this activity will be divided among all participants. Thus, it may be effective for preventing a loss of market share to a new competitor; but is not likely to be effective at increasing market share against other competitors.
- Political contributions significantly impact politicians’ decisions, but also carry some risk of backlash from a public that decries their use in politics. However, the public’s perception of both who is making and who is receiving contributions is often very different from reality. A marketing manager must know the relevant political environment much more accurately, in order to allocate funds where they will get the greatest return on investment.
What career titles work with megamarketing strategies?
Marketing Managers work with a company’s marketing mix, including product, placement, pricing, promotion, public relations, and political power.
What do they do?
What type of salary should I expect?
- Marketing Manager
Median annual pay: $116,010
Top 10%: $187,199+
- Public Relations Specialist
Median annual pay: $53,190
Top 10%: $96,880
- Market Research Analyst
Median annual pay: $60,250
Top 10%: $112,560
Source: U.S. Bureau of Labor and Statistics
- identify all third parties that may have a stake in the business enterprise
- communicate to company executives the nature of the barriers to trade
- choose strategies for marketing to these parties, and allocate funds accordingly
- coordinate the efforts and messaging of lobbyists, public relations, and traditional marketing teams
Education and Skills
Marketing managers typically have at least a bachelor’s degree in marketing or business management, accompanied by several years’ experience managing teams in sales, advertising, or related fields. Marketing managers who engage in megamarketing campaigns also need some background in political science and lobbying. Education preparing them for this career includes classes in the legislative process, as well as in marketing, market research, and business management.
Public Relations Specialists, Communications Managers, and Lobbyists
Public Relations Specialists, Communications Managers, and Lobbyists work to inform their target audience about the benefits of their business operations.
What do they do?
- handle media relations, issuing press releases, responding to negative press, and arranging for coverage of their company’s positive contributions to society
- develop official statements, question-and-answer documents, background materials, positioning messages, and other communications materials
- develop educational (promotional) materials informing about their industry, and provide these to legislative staff and journalists
- meet with legislators to advocate measures promoting or protecting their company
Education and Skills
Public relations specialists and communication managers need to have at least a bachelor’s degree, usually in public relations or communications, and are served well by having at least a minor in political science. Successful lobbyists may come from the political ranks, or from the ranks of marketers, buyers, and managers; such jobs also require at least a bachelor’s degree, typically in marketing and political science.
Market Research Analysts
Market Research Analysts gather data about new markets, and market barriers.
What do they do?
- use a variety of methods to identify potential markets, estimate the demands there, and make predictions on what kind of sales a company may generate there
- research both attitudinal and structural barriers in a potential market, and estimate the impacts of these barriers upon market demand
- use data and statistical analysis to make predictions regarding the return on investment for megamarketing strategies
- use data to recommend messaging strategies for channels and content of market communications
Education and Skills
Market research analysts need at least a bachelor’s degree in market research (or related field, such as statistics or computer science); they may also have a minor in business organization and management. A cultural anthropology background is helpful for those engaged in research of markets in other countries. Analysts may gain experience in a number of data collection and analysis jobs, including for government agencies or for geographic information systems.
How can a marketing school help you succeed?
Our Recommended Schools
Effective megamarketing requires all the traditional skills of a marketer, as well as additional skill in political science and lobbying. A marketing program equips you with the fundamentals needed to begin a career in the field. (See also Traditional Marketing)
Education will train you to better understand your market environment, including customers, competition, and non-market actors. Economics courses will teach you about identifying and responding to supply and demand, and the role of governments in economic development, while courses in market research will teach you how to segment consumers and identify market opportunities in both domestic and international markets. Research in consumer behavior will train you to predict how customers will respond to different strategies and communications.
A marketing program will also teach about aspects of business organization and management, including product development, distribution, pricing, and promotion. You’ll learn the basic leadership skills required to coordinate and manage teams, and how to align their goals with the larger goals of the company. Coupled with the analytical skills honed in other classes, you’ll learn where to invest money and other resources in order to gain the best returns.
Additionally, any marketing school will emphasize the development of communications skills. In addition to taking specific classes on various communication environments (including mass communication and organizational communication), a marketing school will require you to practice and develop your communications and presentation skills in all of your classes. Additionally, you’ll learn how to prepare communications to fit the needs of different audiences, from consumers to journalists to legislators.
To learn more about what a marketing school can do for you, request information from schools with degrees in marketing, and take the first step toward a megacareer in the marketing world.