Jan 23, 2024 7 min read

The Year Business Made the World Hate It

I’m Umair Haque, and this is The Issue: an independent, nonpartisan, subscriber-supported publication. Our job is to give you the freshest, deepest, no-holds-barred insight about the issues that matter most.

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Shrinkflation, skimpflation, greedflation, stagnation. The four words that sum up the year. The year business made the world more or less hate it. What do I mean?

"We no longer sell this brand due to unacceptable price increases.” That’s what signs says on shelves where Pepsico’s products once used to be. Uh oh. Welcome to…

There you were, on a sunny day, trapped in a lecture hall. Your Very First Marketing Lesson. A voice intoned: “Product, Place, Price, Promotion.” The holy 4 P’s. It wasn’t God—just your marketing professor. Don’t worry, if you didn’t take a marketing class—we’re about to discuss how business made the world hate it, by abusing it’s power and privileges.

Fast forward to today. What do you see? Here’s what I see: marketing’s lost its way. It’s lost contact with its own touchstones, the holy 4 P’s. And it needs to come down to earth again, and kiss the ground—before even more damage, sorry, I mean self-destruction, is done.

Take the example of Pepsi and Carrefour. Carrefour, one of the world’s largest retailers, dropped Pepsi’s brands, from Pepsi itself, to Doritos, Lay’s, and Quaker. Why? “The French supermarket chain Carrefour has said it will stop selling PepsiCo products in stores in four European countries because the global food company has put its prices up by too much.”

Crr-ack—bang. Did you hear that? That was a warning shot, fired across the world. One of the world’s largest retailers didn’t just drop Pepsi’s brands—it replaced them with a sign about “unacceptable price increases.” Imagine for a moment just how much brand damage that does. Sure, one day, those products might return to shelves, and probably will—but people will never look at them the same way again. That’s “scarring”—a permanent loss in brand equity, which in this case, has taken decades to build, lost in days. And now that Carrefour’s taken this step, a flood is sure to follow, a dam breaking.

What’s marketing been doing for the last few years? It’s been making mistake after mistake. And the biggest mistake of all that it’s been making is this. It’s been allowing price increases, to absurd, stratospheric levels. In a certain, lethal context. A ruinous economy for the average person.

How bad is it out there for the average person? The average American is now “cashflow negative.” Think about that for a moment—that’s an invisible depression by any other name. In China, young people are the “lying flat generation.” In the West, young people report being “numb,” “completely overwhelmed,” and “unable to function.” Retirement, savings, stability—all these are increasingly out of reach for masses upon masses, fueling sociopolitical upheaval and discontent. 80% of people in the West, Asia, and beyond feel profoundly pessimistic about the future.

This is the worst economy in decades—and yet there companies are, not just raising prices, but doing something more like pumping them up to titanic proportions. So why have boardrooms done this? It’s a way of injecting adrenaline into the bottom line, of course.

But now the bill is coming due.

You can’t jack up prices in a ruinous economy forever, and just whistle and walk away. One day, you’re going to have pay your own price, and that day, for more and more companies, is today. Pepsi just did incalculable damage to its own brands—and I’m sure that Carrefour negotiated with them, or attempted to, for months. Meanwhile, from tech to media to luxury to finance & insurance, “market corrections” are racing across industries. That’s because people are rejecting this approach, vehemently, angrily, and furiously.

Why has all this happened? It’s not that marketing’s been the one raising prices, per se. Rather, it’s that marketing lost control of the holy 4 P’s. Who sets prices in most organizations? It’s not marketing usually, anymore, and marketing often barely has any say over the process. Today? Prices are set by consultants, beancounters, junior strategy execs, or private equity androids. And that’s a very bad thing.

Marketing ceded control over the 4 P’s, and now everyone’s paying the price—consumers, companies, shareholders, the economy.

What’s the point of the 4 P’s? Do you remember? If you had a good marketing prof, the answer was: “to build a brand.” If you had a poor one, or maybe if you didn’t have one, the answer—and it’s the wrong one—was: “to maximize profits this nanosecond.” The 4 P’s are there for a reason. Not to sell the most stuff this instant, day, or even quarter. But to, over years and decades, to build this magical, mysterious thing called “brand equity.” Brand equity is a tough thing to express well, so let’s just call it the soul of an organization, or maybe it’s heartbeat, for now. It’s intimately related to vision, mission, culture, the very philosophical being-of-an-organization.

The point of the 4 P’s is to build brands that endure, matter, last, and grow.

But we can abuse the 4 P’s, too. Misuse them. When we do foolish things like jack up prices to astronomical levels, while people are struggling, terribly, barely making ends meet, and the global economy is going into convulsions—we’re abusing the 4 P’s. We’re not using them properly, well, thoughtfully, carefully. Towards their intended, proper, justified and righteous purpose. And like all things we abuse, it’s going to backfire on us. Like it is for so many companies now, from Pepsi to Farfetch to Peloton to Facebook and beyond.

Don’t abuse the 4 P’s. That’s the first lesson of marketing these days, in the 21st century. You see, this really is a different era. We now live in a world of a) stagflationary economies where b) people are right on the brink, financially and economically, which is causing c) geopolitical tension and social discontent that d) is so serious that democracy itself is in steep, sharp decline. This set of macro-trends is incredibly serious, and decision-makers aren’t paying enough attention to them. They’re taking the word of not-so-thoughtful people, who tell them that “the economy’s great!,” and “people are happy!”, yet meanwhile, people’s stress and anxiety and despair have exploded off the charts, and money is concern number one (while “there might not be a future” is a close number two.)

In this context? What do we do? Do we abuse the 4 P’s? Isn’t that, in its own way—forgive me for saying it—abusing people, who are our customers, too? When we say to people, “we’re going to raise these prices to seriously irrational levels, and you’re going to bear the cost,” is that fair? It should be obvious to see that masses upon masses feel this is all a very raw deal, and…

The relationship between people and institutions was already in dire shape. People distrust “brands” and institutions of all kinds. But now? After years of being treated like wallets, not human beings, the relationship is even worse. People are ready to punish brands, often vehemently, for the tiniest missteps—I don’t even have to give you examples, just think of endless social media rage.

We cannot go on abusing people this way. Not if we want to have proper, authentic, lasting, enduring relationships with them. How do people feel these days, about organizations? They feel exploited. Hence, the explosion, in despair, rage, and the turn to conspiracy theory and demagoguery. Exploited: those systems don’t care about me, they just want to use me for their own benefit and gain.

Go ahead and tell me how you build a brand that way. How many people have positive feelings, for, say, Big Oil, or Big Pharma? Maybe you see my point. That level of reputational risk is what all brands are risking now. That’s a Big Risk. An Existential Risk. And it’s also a painfully stupid risk to incur.

You cannot build a brand by abusing the 4 P’s. Which is abusing people, too, exploiting them. Good marketing is about…a lot of things. Synchronicity, the feeling of being seen and understood, a heartbeat of meaning and truth and worth. Above all, it’s about creating genuinely better lives for people—not just slapping logos and slogans on stuff. All that? It’s being lost today, because marketing’s now abusing the 4 P’s, not using them with care, discretion, thoughtfulness, respect. All of which we could use a word for, “strategically,” but even that comes up short.

This is bad strategy. Abusing the 4 P’s? Jacking up prices, when people are already at breaking point, and the economy’s entered a long-run stagflationary phase so severe it’s destabilizing the globe’s democracy? There are Big Mistakes in strategy. Picking the wrong battles is one. Fighting the wrong wars is even worse. This is like those, but perhaps even more severe. Turning your own allies, or in this case, customers, into disillusioned, bitter enemies? There’s no mistake greater than that, in commerce, war, or life.

This is bad strategy, but even that understates it: this is an era where marketing has lost its way. It’s forgotten what good strategy is anymore. Sorry, marketers, you’re going to have do much, much better than this, if you want to matter again. Carrefour’s action will be the first of a series of dominoes, and other retailers are all but sure to follow—because the world is at breaking point. Good strategy. In this day and age? We’ll talk more about it, but for now? It’s about respecting the 4 P’s, and using them with respect, for people, the world, the future, democracy, the planet. About genuinely elevating and expanding possibilities, not leaving people feeling betrayed, abandoned, and exploited. Like I said: good luck building a brand that way, versus the opposite of a brand.

What’s that, by the way? A void. Just like the one of Carrefour’s shelves, where Pepsi’s stuff used to be.

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