Return To Institutionalism


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A discussion on Institutionalism relating to the South African Market – created: 2007

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Return To Institutionalism

  1. 1. Return to institutionalism Introduction This discussion is based around the current social situation within South Africa, more specifically the so-called emerging “black diamonds”, and relates specifically to how marketing, communication and brands are able to leverage this phenomenon. As our political, economic, social, and international environment evolves it brings individual and group changes that effect how this group generally views the world, although only communication, marketing, branding and general consumer behavioral effects will be looked at. Institutionalism has various fields of study, which may change depending on the geographic region; it has also changed over time to what we know today, and although they have specific themes, these themes do not specifically relate to the topic of return to institutionalism. A brief overview on these definitions will be discussed along with relevant case studies. The mindset of the individuals and more broadly the groups concerned is changing, and it is therefore important from any business, particularly in communications, point of view how to interact with them and develop products and services to meet their needs. Changes There have been significant changes in South Africa’s social, economic and political system, which is changing the way consumers interact amongst themselves and with the products that they buy and use. It is evident that changes are happening is society, this can be mainly attributed to the so called “Black Diamonds” and although this term may be daunting it is just a name given to a group of every-day black South African that have moved into the middle class status.
  2. 2. The biggest change is the amount of spending power that this group has when compared to the rest of South Africa, they have already exceeded the buying power of white South Africans and are set to be a major market and influence in many arenas. There are now many ways for these new black diamonds to spend their money and opportunities and offerings are becoming more abundant and personalized. Institutionalism The way we make decisions and see the world around us is different depending on the worldview we predominantly find ourselves in. We can also change depending on our situations, for example at work a person would be in a different worldview to that when he is at home with a family. There are five worldviews, Affiliative where the person has a need to belong and connects with traditional and custom group knowledge. Egocentric worldview which is individualistic, people are power driven and require personal recognition of their achievements. Autonomous worldview is individualistic and people are entrepreneurial driven and thrive on materialistic, exploitative and elitist positions. Humanistic view is group based and involves having a consensual approach being driven to have a harmony with all living things. Finally the Institutional worldview is group based and is about an ordered affiliation, it is order driven, which means people are interested in following the correct and proper ways in doing things. They have strict morals and believe in sacrificing their present situation for rewards at a later stage. The Institutional worldview can be placed on the following axis, sitting in where the standard middle class would sit, with the majority having a group affiliation and a more inner and mature sense.
  3. 3. Looking at the way people move through the phases of being black diamonds, we can correlate it to how people move into an institutional worldview and ultimately see what kind of products and services they will buy and use. Research Consumer Model These new consumers have more money than ever before and wish to spend it on objects to make their lives better, this is happening because of the previous situations where they may not have had the opportunity or been held back. It is evident they are well educated and have the understanding and access to purchase, a sophistication of purchase. Exclusive brands such as Mercedes would now appeal to them when buying a car. There are new media publications such as The Afropolitan, which is facilitating these relationships and buying purchases. Research Black diamonds Changes These people are however not keeping their purchases as they grow through the black diamond “life cycle”. It is important for them to have what their parents did not and therefore other things become more important. This means investing money in property for themselves and secondly as an investment would be more important than having to pay off a vehicle. There is a greater need for something more permanent, secure and stable than a vehicle, which will be old in a few years and with a lower value. The new National Credit Act is also posing some restrictions on consumers to help benefit people without a good financial knowledge, this is helping a large portion of the population to live in a stable manner and looking at it broadly has some element of institutionalism. There are more systems being put into place and it is to secure and stabilize the future.
  4. 4. Not only are these people putting systems into place to benefit them in the future they are also trying to help their own communities by spending money on other black owned and run businesses which benefit their own and their communities needs. Research Black Money What has happened is that these people have found that money does not buy them what they want in the long term, something more firm to validate who they are, this includes a house, strong family base and to be able to contribute to a system that works. Case Studies In Soweto there is a new taxi rank, which follows very institutional and structured architecture, which is a large change from many current older and potentially informal taxi ranks. The structure is based Additional Thoughts • What is return to institutionalism?  Although there are various paradigms of institutionalism, the themes of each will not be discussed, only the general theme of supporting a form of social organisation and the structure put in place in society to reduce uncertainty  Where the idea came from – South Africa is changing and the evolution of consumers is happening at a faster rate not only nationally but internationally.  People have much greater and easier access to information than before and have the knowledge and resources to act and ultimately change the environment in which they work, play, and ultimately live in.
  5. 5.  Looking at the trend of black diamonds from UCT Unilever institute we can propose that they are closely related and have a close pattern and effects.  Institutionalism involves a type of person or group of people that are concerned for their lives and are taking what they are building in their lives and standing up for it to ensure it will be there in the future.  Return to Institutionalism is about people  Disruptions and “loopholes” in the so-called system of society either have not been effectively established to an optimal level.  These people feel secure and happy about rules and regulations in society to help protect their lives with something to fall back on if there are problems.  They are not rebellious. • Industrial & French revolution – similarities ♦ Industrial revolution, people were emancipated by increasing distributed power and access greater access to the products and services that only the rich could previously afford ♦ The same is true of the current markets only the markets are putting themselves in a position to increase their standard of living • Trends ♦ Political  Since the end of Apartheid and substantially into a somewhat solid democratic system, people are starting to get involved with local politics.  Issues surrounding political leaders are discussed more and more and it is no longer a fight for freedom anymore. ♦ Economic
  6. 6.  As people are becoming more financially aware and earning more, they want to ensure they have an equal opportunity and that their money and investments are properly, efficiently and securely handled.  Financial institutions and the NCA are making it easier to understand and transact while protecting consumers from falling into traps where they don’t have enough money. ♦ Social  The biggest place to see social interactions worldwide is on the internet, with new social interactions happening everyday. Although the internet is an evolution of previous technological developments, it has had the biggest effect.  There are not many local social facilitations on the internet, but it is growing as telecommunications gets cheaper and easier to access. • Case studies ♦ Soweto taxi rank. Taxi ranks in South Africa have always been known to be quite chaotic and unstructured. The new taxi rank in Soweto is an example of the return to institutionalism, with ordered queuing facilities and easily understandable architecture. ♦ Jabulani Mall in Soweto is easily comparable to any other mall in northern suburbs in Johannesburg. Instead of random shops lining the streets, there is now an easier, cleaner and overall more accessible way to shop. Many retailers are tailoring their offerings to this market, one such example is Ginger Mary, which sells ethnic clothing and is a division of Truworths. • Influences ♦ Media – look at magazines like the afropolitan which was recently launched, aimed at black diamonds, and talks about everything an
  7. 7. “afropolitan” may need to know. Including politics around the ANC, Affirmative action and even the scenarios around living in a township and moving to the “suburbs” ♦ Crime and Strikes are big talking points in South Africa, in the past the current black diamonds would have supported a teachers strike, now this is not an option to help build South Africa, they would now condem this action. ♦ By-laws? ♦ Generations – The next generation that is graduating from high school and ♦ Mindsets are changing and this affects what products and services these consumers use, people are thinking more in the long term. They would rather buy and pay off a house than have an expensive vehicle and not be able to have a house. ♦ Get opinions from State, Churches, media etc. that correlate. ♦ Globally businesses are trying to become responsible in many areas including charity and especially more recently the environment. While this trend follows a similar pattern to RTI, and involves regaining control it, RTI in this sense is very different and is gaining momentum from the bottom and working up, generally with organisations following. • So what? ♦ This affects how advertisers speak to consumers, are they looking for more conservative, founded approach ♦ Many South Africans are still unable to even see “how the other half live” ♦ Brand choices are changing as people move, they are also becoming more of an integrated community and are buying and
  8. 8. acting with the “group”. This means that status will not necessarily come first when buying.