Unfair to put blame on marketing tactics

As a marketer, I feel that the negative reports on the marketing efforts of formula milk manufacturers are unfair (Don't pass rising marketing costs to consumers, mums say; May 11).

Brands - from banks to condominium developers, hotels and airlines - use so-called premium images to sell an idealised vision of desirable outcomes derived from their products.

They wish to get consumers to form a specific perception about the brand, to buy the product or service, and hopefully entrench the consumer's loyalty to the brand.

This is the point of marketing.

Parents pay high prices for products that they perceive to have better quality and provide the best nutritional supplement for their children.

It is the same as drivers who pay more for a continental car than an Asian one - they feel that they are getting a better product.

Singling out marketing tactics for the rising prices of milk formula is unfair.

Will advertising for private kindergartens, tuition agencies and assessment books come under scrutiny next?

In its report, the Competition Commission of Singapore (CCS) did not give a conclusive breakdown of the cost components that make up a tin of formula milk's final recommended retail price.

Highlighting the 42.4 per cent increase in marketing costs as a standalone figure can mislead consumers into believing that marketing costs are to blame for the bulk of the price tag.

It should not be a surprise to anyone that marketing costs are factored into the retail price of a product, together with the cost of research and development, raw materials, manufacturing, packaging, transportation, testing, distribution, labour and rent.

The CCS report states also that parallel imports of milk formula could have helped mitigate price increases, but none of the supermarkets did so because it was too much work to go through the import process.

Perhaps retailers should also shoulder some responsibility in this matter.

It is important that all facts and figures are understood before measures are taken to intervene in open market economics.

Gurmit Singh Kullar

A version of this article appeared in the print edition of The Straits Times on May 17, 2017, with the headline 'Unfair to put blame on marketing tactics'. Print Edition | Subscribe