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LAMB HAIR McDANIEL BOIVIN GAUDET SHEARER FOURTH CANADIAN EDITION
MKTG
MK
ACTIVATE
MKTG
4CE
TODAY!
LAMB HAIR McDANIEL BOIVIN GAUDET SHEARER

1 PRINCIPLES
Open the Access Card OF MARKETING
TG
included with this text.
2
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3
Study.
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ISBN-13: 978-0-17-672368-2
ISBN-10: 0-17-672368-4
9 780176 723682
3 Strategic Planning for
Competitive Advantage 34
4-3b Economic and Technological
Development 53
4-3c The Global Economy 54
4-3d Political Structure and Actions 54
3-1 The Importance of Strategic Planning 34
4-3e Demographic Makeup 59
3-2 Corporate Planning—Defining the Business
Mission 36 4-3f Natural Resources 59
3-3 Strategic Directions—Designing the Business 4-4 Global Marketing by the Individual Firm 60
Portfolio 37 4-4a Exporting 60
3-3a Conducting a SWOT Analysis 37 4-4b Licensing and Franchising 61
3-3b Strategic Alternatives—Linking SWOT to 4-4c Contract Manufacturing 61
Growth Strategies 38 4-4d Joint Venture 61
3-4 Business Planning for Competitive Advantage 39 4-4e Direct Investment 62
3-4a Competitive Advantage 39 4-5 The Global Marketing Mix 62
3-4b Cost Competitive Advantage 39 4-5a Product Decisions 62
3-4c Product Differentiation Competitive 4-5b Promotion Adaptation 63
Advantage 40 4-5c Place (Distribution) 64
3-4d Niche Competitive Advantage 41 4-5d Pricing 64
3-4e Building Sustainable Competitive Advantage 41 4-6 The Impact of the Internet 65
3-5 Marketing Planning—Setting the Objectives and 4-6a Social Media and Global Marketing 66
Identifying the Target Market 42 Side Launch Brewing Company Continuing Case:
3-5a Setting Marketing Plan Objectives 42 The Globalized Beer Drinker 67
3-5b Target Market Strategy 42

3-6 The Marketing Mix 43
Part 1 Case: From Analysis to
3-6a Product Strategies 44
Action 69
3-6b Pricing Strategies 44
3-6c Place (Distribution) Strategies 44
3-6d Promotion Strategies 44 Part 2
3-7 Marketing Plan Implementation, Evaluation, and
Control 44
Analyzing Marketing
3-7a Implementation 44 Opportunities
3-7b Evaluation and Control 45
3-8 Effective Strategic Planning 45
Kaspars Grinvalds/Shutterstock.com
Side Launch Brewing Company Continuing Case:

Born to Grow 46
4 Developing
Vision 48
a Global
4-1 Rewards of Global Marketing 48

4-1a Importance of Global Marketing to Canada 50
4-2 Multinational Firms 51
4-2a Global Marketing Standardization 52 5 Marketing Research 72
4-3 External Environment Facing Global 5-1 The Role of Marketing Research 72
Marketers 52 5-2 The Marketing Research Process 73
4-3a Culture 52 5-2a Step 1: Identify the Problem 73
NEL CONTENTS v
Copyright 2019 Nelson Education Ltd. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content
may be suppressed from the eBook and/or eChapter(s). Nelson Education reserves the right to remove additional content at any time if subsequent rights restrictions require it.
5-2b Step 2: Design the Research 74 6-6 Individual Influences on Consumer Buying
5-2c Step 3: Collect the Data 75 Decisions 106
5-2d Step 4: Analyze the Data 85 6-6a Gender 106
5-2e Step 5: Present the Report 85 6-6b Age and Family Life-Cycle Stage 106
5-2f Step 6: Provide Follow-Up 86 6-6c Personality, Self-Concept, and

Lifestyle 107
5-3 The Impact of Technology on Marketing
Research 86 6-7 Psychological Influences on Consumer Buying
Decisions 108
5-3a Online Surveys 87
6-7a Perception 108
5-3b Online Research Panels 87
6-7b Motivation 109
5-3c Online Focus Groups 88
6-7c Learning 110
5-3d Mobile Marketing Research 88
6-7d Beliefs and Attitudes 111
5-3e Social Media Marketing Research 89
6-7e Consumer Behaviour Elements—Working
5-3f The Rise of Big Data 89 Together 112
5-4 When to Conduct Marketing Research 90 Side Launch Brewing Company Continuing Case:
Side Launch Brewing Company Continuing Case: Looks Matter 113
Data in Absentia 92
6 Consumer Decision
7 Business Marketing 116
7-1 What Is Business Marketing? 116
Making 94 7-2 Business versus Consumer Marketing 117
6-1 The Importance of Understanding Consumer 7-3 The Network and Relationships Approach to
Behaviour 94 Business Marketing 118
6-2 The Consumer Decision-Making Process 95 7-3a Relationships in Business Marketing 118
6-2a Need Recognition 96 7-3b Interaction in Business Marketing 118
6-2b Information Search 96 7-3c Networks in Business Marketing 119
6-2c Evaluation of Alternatives and Purchase 97 7-4 Fundamental Aspects of Business Marketing 121
6-2d Postpurchase Behaviour 98 7-4a Types of Demand 121
6-3 Types of Consumer Buying Decisions and Consumer 7-4b Number of Customers 122
Involvement 99
7-4c Location of Buyers 122
6-3a Factors Determining the Level of Consumer
Involvement 99 7-4d Type of Negotiations 122
6-3b Marketing Implications of Involvement 100 7-4e Use of Reciprocity 123
6-3c Factors Influencing Consumer Buying 7-4f Use of Leasing 123

Decisions 101 7-4g Types of Business Products 123
6-4 Cultural Influences on Consumer Buying 7-5 Classifying Business Customers 124
Decisions 101 7-5a Major Categories of Business
6-4a Culture and Values 101 Customers 124
6-4b Understanding Culture Differences 102 7-5b Classification by Industry 126
6-4c Subculture 103 7-6 Business Buying Behaviour 127
6-4d Social Class 103 7-6a Buying Centres 127
6-5 Social Influences on Consumer Buying Decisions 104 7-6b Buying Situations 127
6-5a Reference Groups 104 7-6c Evaluative Criteria for Business Buyers 129
6-5b Opinion Leaders 105 7-7 Business Marketing Online 129
6-5c Family 105 7-7a Trends in B2B Online Marketing 130
vi CONTENTS NEL
Side Launch Brewing Company Continuing Case: 9-4c Capture Customer Data 159
The Forbidden Fruit of Craft Brewers 132 9-4d Store and Integrate Customer Data 161
8 Segmenting,
9-4e Identifying the Best Customers 162
Targeting, and 9-5 The CRM Cycle—Stage 3 (Customer
Positioning 134 Feedback) 164
9-5a Leverage Customer Information 164
8-1 Market Segmentation 134
9-6 Privacy Concerns and CRM 168
8-2 The Importance of Market Segmentation 135
9-7 The Future of CRM 169
8-3 Bases for Segmenting Consumer Markets 135
8-3a Geographic Segmentation 136
CSR in on Board 170
8-3b Demographic Segmentation 136
8-3c Psychographic Segmentation 140
Part 2 Case: Marketing Concept
8-3d Benefit Segmentation 141 Review 172
8-3e Usage-Rate Segmentation 141
8-4 Criteria for Successful Segmentation 142
8-5 Bases for Segmenting Business Markets
8-5a Company Characteristics 142
142
Part 3
8-5b Buying Processes 143 Product Decisions
8-6 Steps in Segmenting a Market 143
8-7 Strategies for Selecting Target Markets 144
8-7a Undifferentiated Targeting 144
8-7b Concentrated Targeting 145
8-7c Multisegment Targeting 145
8-7d One-to-One Marketing 146
Courtesy of Tylko
8-8 Positioning 147

8-8a Perceptual Mapping 148
8-8b Positioning Bases 148
8-8c Repositioning 149
8-8d Developing a Positioning Statement 149
Side Launch Brewing Company Continuing Case: 10 Product Concepts 176
Hipsterville Calling 150 10-1 What Is a Product? 176
10-2 Types of Consumer Products 177
9 Customer Relationship
Management (CRM) 152
10-2a Convenience Products 178
10-2b Shopping Products 178
9-1 What Is Customer Relationship Management? 152 10-2c Specialty Products 179
9-1a The Other CRM 153 10-2d Unsought Products 179
9-2 The CRM Cycle 154 10-3 Product Items, Lines, and Mixes 179
9-3 The CRM Cycle—Stage 1 (Marketing Research) 155 10-3a Adjustments to Product Items, Lines,
and Mixes 180
9-4 The CRM Cycle—Stage 2 (Business
Development) 155 10-4 Branding 182
9-4a Identify Customer Relationships 157 10-4a Benefits of Branding 183
9-4b Understand Interactions of the Current 10-4b Branding Strategies 183
Customer Base 158 10-4c Trademarks 186
NEL CONTENTS vii
10-5 Packaging 187 12-2c Inconsistency 214
10-5a Packaging Functions 187 12-2d Inventory 214
10-5b Labelling 188 12-3 Service Quality 215
10-5c Universal Product Codes (UPCs) 188 12-3a The Gap Model of Service Quality 215
10-6 Global Issues in Branding and Packaging 189 12-4 Marketing Mixes for Services 217
10-7 Product Warranties 190 12-4a Product (Service) Strategy 218
Side Launch Brewing Company Continuing Case: 12-4b Process Strategy 219
The Art of Craft 191 12-4c People Strategy 219
11 Developing and Managing

Products 194
12-4d Place (Distribution) Strategy
12-4e Physical Evidence Strategy 220
219
12-4f Promotion Strategy 220

11-1 The Importance of New Products 194 12-4g Price Strategy 221
11-1a Categories of New Products 195 12-4h Productivity Strategy 221
11-2 The New-Product Development Process 196 12-5 Relationship Marketing in Services 221
11-2a New-Product Strategy 197 12-6 Internal Marketing in Service Firms 222
11-2b Idea Generation 197 12-7 Nonprofit Organization Marketing 223
11-2c Idea Screening 199 12-7a What Is Nonprofit Organization
11-2d Business Analysis 199 Marketing? 223
11-2e Development 199 12-7b Unique Aspects of Nonprofit Organization
Marketing Strategies 224
11-2f Test Marketing 201
11-2g Commercialization 202
Take Care of Your Back Yard 227
11-3 Global Issues in New-Product Development 204
11-4 The Spread of New Products 204 Part 3 Case: Product Decisions 229
11-4a Diffusion of Innovation 204
11-4b Product Characteristics and the Rate
of Adoption 205
11-4c Marketing Implications of the Adoption
Part 4
Process 206
11-5 Product Life Cycles 206
Pricing Decisions
11-5a Introductory Stage 207
11-5b Growth Stage 208
Torontonian/Alamy Stock Photo
11-5c Maturity Stage 208

11-5d Decline Stage 208
11-5e Implications for Marketing Management 209
Balancing a Beer Portfolio 210
12 Services and Nonprofit

Organization Marketing
12-1 The Importance of Services 212
212 13 Setting the Right Price 232
13-1 The Importance of Price 232
12-2 How Services Differ from Goods 213 13-1a What Is Price? 232
12-2a Intangibility 213 13-1b The Importance of Price to Marketing
12-2b Inseparability 214 Managers 232
viii CONTENTS NEL
13-2 The Four-Step Pricing Process 233 14-2 Channel Intermediaries and their Functions 259
13-2a Step 1—Establish Pricing Objectives 234 14-2a Channel Functions Performed
13-2b Step 2—Estimate Demand, Costs, and Profits 236 by Intermediaries 259
13-2c Step 3—Choose a Price Strategy 239 14-3 Types of Marketing Channels 260
13-2d Step 4—Use a Price Tactic 241 14-3a Channels for Consumer Products 260
13-3 The Legality and Ethics of Setting a Price 247 14-3b Channels for Business and Industrial
Products 261
13-3a Bait Pricing 247
14-3c Alternative Channel Arrangements 262
13-3b Deceptive Pricing 247
14-4 Making Channel Strategy Decisions 263
13-3c Price Fixing 247
14-4a Factors Affecting Channel Choice 263
13-3d Predatory Pricing 248
14-4b Levels of Distribution Intensity 264
13-3e Resale Price Maintenance 248
14-5 Handling Channel Relationships 265
13-3f Price Discrimination 248
14-5a Channel Power, Control, and Leadership 265
Side Launch Brewing Company Continuing Case: An
Accessible Price 249 14-5b Channel Conflict 266
14-5c Channel Partnering 266
14-6 Managing the Supply Chain 267
Part 4 Case: Pricing Decisions 251
14-6a Benefits of Supply Chain Management 267
14-6b Managing Logistics in the Supply Chain 268
Part 5 14-6c Sourcing and Procurement

14-6d Production Scheduling 268
268
Distributing 14-6e Order Processing 269
Decisions
14-6f Inventory Control 270
14-7 Distribution Challenges in World Markets 270
14-7a Developing Global Marketing
Channels 270
14-7b Global Logistics and Supply Chain
Management 271
monkeybusinessimages/iStock/Thinkstock

Getting Beer into Hands 272
15 Retailing 274
15-1 The Role of Retailing 274
15-2 Classification of Retail Operations 275
15-2a Ownership 276
15-2b Level of Service 276
14 Marketing Channels
and Supply Chain
15-2c Product Assortment
15-2d Price 276
276
Management 254 15-3 Major Types of Retail Operations 276
14-1 The Nature of Marketing Channels 254 15-4 The Rise of Nonstore Retailing 280
14-1a A Plea for Place—The Forgotten P 254 15-5 Franchising 282
14-1b The Marketing Channel and Intermediaries 15-6 Retail Marketing Strategy 283
Defined 256 15-6a Defining a Target Market 283
14-1c How Intermediaries Help the Supply Chain 256 15-6b Choosing the Retailing Mix 284
NEL CONTENTS ix
15-7 Addressing Retail Product/Service Failures 288 16-4g The Communication Process and the
15-8 Retailer and Retail Consumer Trends and Promotional Mix 305
Advancements 288 16-5 Promotional Goals and the AIDA Concept 307
Side Launch Brewing Company Continuing Case: 16-5a AIDA and the Promotional Mix 308
Dealing in a Duopoly 291 16-6 Integrated Marketing Communications 309
16-7 Factors Affecting the Promotional Mix 310
Part 5 Case: Distribution 16-7a Nature of the Product 310
Decisions 293 16-7b Stage in the Product Life Cycle 311
16-7c Target Market Characteristics 312
Part 6 16-7d Type of Buying Decision 312

16-7e Available Funds 312
Promotion Decisions 16-7f Push and Pull Strategies 313

On-Message Is More Than Words 314
17 Advertising, Public Relations,

and Direct Response 316
Lightspring/Shutterstock.com
17-1 What Is Advertising? 316

17-1a Advertising and Market Share 317
17-1b The Effects of Advertising on
Consumers 317
17-2 Major Types of Advertising 318
17-2a Institutional Advertising 318
17-2b Product Advertising 319
16 Marketing
Communications 296
17-3 Creative Decisions in Advertising 320
17-3a Identifying Product Benefits 320
17-3b Developing and Evaluating Advertising
16-1 The Role of Promotion in the Marketing Mix 296 Appeals 320
16-2 Marketing Communication 297 17-3c Executing the Message 321
16-2a The Communication Process 298 17-3d Postcampaign Evaluation 322
16-3 The Goals of Promotion 300 17-4 Media Decisions in Advertising 323
16-3a Informing 301 17-4a Media Types 323
16-3b Persuading 301 17-4b Media Selection Considerations 327
16-3c Reminding 302 17-4c Media Scheduling 329
16-3d Connecting 302 17-4d Media Buying 329
16-4 The Promotional Mix 302 17-5 Public Relations 330
16-4a Advertising 302 17-5a Major Public Relations Tools 330
16-4b Publicity 303 17-5b Managing Unfavourable Publicity 333
16-4c Sales Promotion 303 17-6 Direct-Response Communication 333
16-4d Personal Selling 304 17-6a The Tools of Direct-Response
16-4e Direct-Response Communication 304 Communication 333
16-4f Online Marketing, Content Marketing, and Side Launch Brewing Company Continuing Case:
Social Media 305 Reaching the Right Audience 335
x CONTENTS NEL
18 Sales Promotion and Personal
Selling 338
19-2 Creating and Leveraging a Social Media
Campaign 357
19-2a The Listening System 359
18-1 What Is Sales Promotion? 338 19-2b Social Media Strategies 360
18-1a The Sales Promotion Target 339 19-3 Evaluation and Measurement of Social Media 360
18-1b The Objectives of Sales Promotion 339 19-4 Consumer Behaviour on Social Media 361
18-2 Tools for Consumer Sales Promotion 340 19-5 Social Media Tools: Consumer- and Corporate-
Generated Content 362
18-2a Coupons 341
19-5a Blogs 363
18-2b Rebates 341
19-5b Microblogs 363
18-2c Premiums 341
19-5c Social Networks 364
18-2d Loyalty Marketing Programs 342
19-5d Media-Sharing Sites 364
18-2e Contests and Sweepstakes 343
19-5e Social News Sites 365
18-2f Sampling 343
19-5f Location-Based Social Networking Sites 365
18-2g Shopper Marketing 343
19-5g Review Sites 366
18-3 Tools for Trade Sales Promotion 344
19-5h Virtual Worlds and Online Gaming 366
18-4 Personal Selling 344
19-6 Social Media and Mobile Technology 366
18-5 Relationship Selling 345
19-6a Mobile and Smartphone Technology 367
18-6 The Selling Process 346
19-6b Applications and Widgets 367
18-6a Some Key Issues in Each Step of the Selling
Process 347 19-7 The Social Media Plan 368
18-6b Personal Selling in a Global Marketplace 350 19-7a The Changing World of Social Media 368
18-6c The Impact of Technology on Personal Side Launch Brewing Company Continuing Case:
Selling 350 Engagement by Listening 370
From Hard Work Come Good Things 352
Part 6 Case: Promotion
Decisions 372
19 Social Media Strategies 354 Glossary
Endnotes 389
375
19-1 What Is Social Media’s Role in Integrated Marketing
Communications? 354 Index 397
19-1a How Canadians Use Social Media 356 Tear-out cards
NEL CONTENTS xi
1 An Introduction
to Marketing
LEARNING Outcomes
1-1 Define marketing
1-2 Describe the evolution of marketing
My Life Graphic/Shutterstock.com
1-3 Define key marketing terms
1-4 Explain why marketing matters
“Marketing is dead.”
—Kevin Roberts, CEO of Saatchi & Saatchi (top advertising agency)1
1-1 What Is Marketing? marketing to identify a customer to create revenues and

profit, there is no need for an accounting department or
manufacturing facility.
Marketing is a word that elicits much opinion and dis-
So it has become a marketer’s job to understand the
cussion. It is often defined by what it is not rather than
customer, and in doing so, transition marketing from
by what it actually is. Marketing is one of the most mis-
something that used to be considered an afterthought
used words in business today. It is often reduced to a few
to a key component in an organization. Being able to
words that are attached to the activities of marketing:
bring an external customer-based approach, marketing
sales, advertising, and promotion.
can inform other parts of the organization to focus on
Sometimes marketing is seemingly written off
the needs of customers when undertaking any action
entirely, as can be seen by the quote at start of this
or decision. Marketing is far from dead and, in fact, has
chapter from Kevin Roberts of Saatchi & Saatchi, a
never been so alive.
global communications and advertising company. Could
this be true? Do we not need to worry about marketing
anymore? Far from it. Without marketing, there is
1-1a What Is Marketing?
no customer. Most departments in a firm—whether Marketing is about understanding the needs of the
accounting or finance or customer. No other aspect of business has this focus.
operations—are internally Marketing helps to shape the products and services of a
marketing the activities that focused on achieving goals firm, based on an understanding of what the customer is
develop an offering in order to
satisfy a customer need related to their functional looking for. Marketing is about engaging in a conversa-
area. Marketing’s sole tion with that customer and guiding the delivery of what
need a state of being where we
focus is on the customer is required to satisfy those needs.
desire something that we do not
possess but yearn to acquire and understanding what The goal of marketing is summarized nicely by the
makes them tick. Without marketing concept. At its core, the marketing concept
2 PART 1: Marketing—Let’s Get Started NEL
is about offering the customer what they are looking Kevin Roberts was in fact not speaking of the demise
for. It includes the following: of marketing in the provocative quote, but rather its
●● Focusing on customer wants and needs so that the rebirth. He implored marketing practitioners to change
organization can distinguish its offerings from those the way in which marketing is applied. He tasked his
of its competitors. audience with seeing marketing differently and moving
marketing from “interruption to interaction.”2
●● Integrating all the organization’s activities, including Marketing is becoming a conversation with the
production, to satisfy customers’ wants. customer rather than a distraction. Companies are
●● Achieving long-term goals for the organization by finding innovative ways in which to lead this conversation,
satisfying customers’ wants and needs legally and and with access to more tools (Instagram, SnapChat),
responsibly. consumers are now, more than ever, able to talk back.
Source: DILBERT © 2010 Scott Adams. Used By permission of ANDREWS MCMEEL SYNDICATION. All rights reserved.
NEL CHAPTER 1: An Introduction to Marketing 3
Marketing is not dead. Marketing is constantly
changing, along with the customer it continually strives
to better understand. We are heading into a new era of
marketing—one that is reflective of the digital, online,
and engaged world around us. Without marketing, there
is no understanding this world.
1-2 The Evolution of Marketing
Stocksearch/Alamy Stock Photo

The misconceptions surrounding marketing come from
the evolution of how marketing has been used in firms
for more than a century. In their seminal article in the
Journal of Public Policy and Marketing, renowned
researchers William Wilkie and Elizabeth Moore
described how today’s marketing has resulted from
many shifts in both the field of marketing and society. Henry Ford of the Ford Motor Company
The authors note that the past century of marketing once stated, “Any customer can have a
thought “has experienced periodic shifts in dominance car painted any colour that he wants, so
of prevailing modes of thinking.”3 Numerous terms and long as it is black.” Ford was describing the
ideologies are used to describe these shifts in thinking, line of Model T cars that were available to
and below are a few of the orientations in marketing that the customer. His perspective is a great
have been part of these periodic shifts. It is important example of the production orientation way
to investigate some prior perspectives on marketing to of thinking.
provide a better understanding of how marketing is per-
ceived today and why there is so much confusion around
what truly constitutes marketing.
no longer simply produce a product and expect willing
customers to be waiting to buy whatever they are
1-2a The Production Orientation
selling. Sales techniques were established and evolved
The production orientation focuses on marketing as to convince consumers to buy, giving consumers choice
a messenger. Marketing is seen as a way to let customers and ensuring companies focused on creating market
know about products and assumes that those customers share and building sales volume in a highly competitive
will beat a path to the producer’s door. environment.
This perspective can best be described as the “field Sales pitches are encouraged under this orient-
of dreams” orientation, thanks to the movie of the same ation, in which savvy salespeople use their under-
name in which a character states, “If you build it, they will standing of human nature to convince customers to
come.” The production orientation focuses on products purchase their products. Answer the door at home to a
because of a lack of product options in the marketplace. company using the sales orientation, and you may see a
Companies are free to create whatever products they well-dressed person attempting to sell vacuum cleaners
deem appropriate, and or encyclopedias.
customers have to accept The need to coax the customer is paramount in the
production orientation a
focus on manufacturing and
what is offered. sales orientation. Behind this belief, companies place
production quantity in which resources, specifically sales materials (brochures, print
customers are meant to choose ads, etc.) that are used in great quantities to encourage
based on what is most abundantly
1-2b The Sales
sales of their products. Companies respond to a
available Orientation marketplace with more competition by overwhelming
sales orientation hard The sales orientation customers with promotional activities that focus on the
selling to the customer, who has
is highlighted by the hard sell.
greater choice thanks to more
competition in the marketplace increased power of cus- Today, some companies still believe in the import-
tomer choice. Companies ance of hard selling to customers. Companies are still
linking the needs of customers with the competencies of
an organization seeking to meet those needs.
In bringing the elements of the marketing company
orientation together, it becomes clear that marketing
and persuasion are intermixed. Marketing professionals
focus on how to be shrewder about convincing cus-
tomers to buy. Emotions are tied to basic-need products,
higher-order benefits are attached to everyday products,
and the customer is as much of a target of focus as the
Old Visuals/Alamy Stock Photo
product.
However, this stage in the marketing orientation
process is not devoid of any counteraction from the
customer. Consumers are becoming shrewd them-
selves, as they begin to ask for more from the com-
panies providing them products and services. While
consumers are focused on aspects of value and ser-
using aggressive sales tactics to entice customers, which vice, they begin to seek out new ways to satisfy their
is why consumers associate marketing with selling and needs. As seen by the prominence of the sharing phe-
why marketing is often considered intrusive. nomenon, through companies like Uber and Airbnb,
The majority of companies and marketers do not consumers flock towards new offerings that satisfy
subscribe to a marketing approach heavy only on selling. their needs in ways not considered before. Companies
While sales makes up an important part of the marketing can no linger simply focus on persuasion to a passive
offering, it is only one part of the promotional tools customer. The customer begins to demand more from
available to today’s marketer. Management thinker and the companies that serve them, both for them and for
innovator Peter Drucker put it best: “There will always, society at large.
one can assume, be a need for some selling. But the aim
of marketing is to make selling superfluous. The aim of 1-2d Societal Marketing Orientation
marketing is to know and understand the customer so
It is apparent when we distill the marketing concept
well that the product or service fits him and sells itself.
down to a basic idea (give customers what they want) that
Ideally, marketing should result in a customer who is
its pursuit can have potentially unsavoury consequences
ready to buy.”4
(what if what they want isn’t good for them?). Dealing
with this challenge created the societal marketing
1-2c The Marketing Company Orientation orientation, where looking at not only what the cus-
The marketing company orientation is highlighted tomer wants but also what society wants becomes a dual
by the coordination of marketing activities—advertising, emphasis.
sales, and public relations—into one department in an Societal marketing examines the longer-term
organization. Much of how a marketing department is impacts on the customer and the environment when
organized is based on the need to include those ele- customers seek to satisfy
ments. The job of this department is to better under- needs. New movements, marketing company
stand the customer rather than just trying to sell to them. such as recycling and waste orientation a strong
As society evolves and consumers become more emphasis on the marketing
reduction, sought out com-
concept and development of a
sophisticated, products and services previously seen as panies’ solutions to deal more comprehensive approach to
exclusive and out of reach are now seen as possible with greater consumerism. understanding the customer
purchases. In this orientation, customers are grouped Health issues relating to
societal marketing
into market segments, with marketing professionals product use are at the fore- orientation looking not only
tasked with understanding their customer before front of this orientation, at the customer but expanding
making their move. with greater awareness of marketing efforts to include aspects
A term that is important in many orientations, and from the external environment
the safety and dietary issues
that go beyond a firm’s customers,
very much so in a marketing company orientation, is the attached to products. This suppliers, and competitors
marketing concept. The marketing concept focuses on orientation brings a greater
free replacement toy, yogurt tube, or apple slices as a
replacement—no french fries or Chicken McNuggets
to solve this problem.
1-2e Relationship Marketing Orientation

Today, the relationship marketing orientation is about
developing a real and sustainable relationship with the
EXImages/Alamy Stock Photo

customer. As Kevin Roberts (he of the “marketing is dead”
proclamation) said, marketing has to go from “interrup-
tion to interaction.”6 This phrase means that marketing
can no longer look for a one-off sale; marketing has to
focus on taking steps to truly engage with the customer.
Engagement is the focus of this orientation, aided by the
government involvement in consumer needs and wants. use of two essential customer-based strategies: customer
Thanks to better customer education and extremely strict satisfaction and relationship marketing.
promotional restrictions, sales of products like cigarettes
Customer Satisfaction Customer satis-
have dropped drastically. Industries and companies are
faction is the customer’s evaluation of a good or ser-
placing an emphasis on self-regulation before more strict
vice in terms of whether that good or service has met
government involvement created bottom-line and public
the customer’s needs and expectations. Failure to meet
relations issues.
a customer’s needs and expectations results in the cus-
A signpost for change in societal marketing was the
tomer’s dissatisfaction with the good or service.7 Keep-
Happy Meal. McDonald’s signature meal has long been
ing current customers satisfied is just as important as
a target for critics who argue that the fast-food giant has
attracting new customers—and a lot less expensive.
used it to attract young customers. In 2011, the Happy
One study showed that reducing customer attrition by
Meal began to offer more nutritious options, such as
just 5 to 10 percent could increase annual profits by
yogurt and a “mini” size of fries (31 grams). In 2012,
as much as 75 percent.8 A 2 percent increase in cus-
apple slices were offered as a replacement for french
tomer retention has the same effect on profits as cut-
fries. In 2013, McDonald’s announced it would provide
ting costs by 10 percent.9 Firms that have a reputation
health information on the Happy Meal boxes that touts
for delivering high levels of customer satisfaction tend
healthier food choices.
to do things differently from their competitors. When
In 2016, McDonald’s offered a rather unusual toy
top management is obsessed with customer satisfaction,
in its Happy Meals. In conjunction with the 2016 Rio
employees throughout the organization are more likely
Olympics, McDonald’s offered a “Step-iT,” a fitness
to understand the link between how they perform their
tracker for kids. The device was in the form of a watch
job and the satisfaction of customers. The culture of
that children could wear to monitor the steps they take
such an organization focuses on delighting customers
each day. This offer was clearly aimed at responding
rather than on selling products.
to concerns over the types of toys on offer at the food
retailer. A recent study by the Robert John Wood Relationship Marketing Relationship
Foundation showed that McDonald’s most often tar- marketing is a strategy that focuses on keeping and
geted children with toys and movie tie-ins, rather than improving relationships with current customers. This
food. The Step-iT was an attempt to allay these con- strategy assumes that many consumers and business cus-
cerns; however, the resulting fallout from the Step-iT tomers prefer to keep an ongoing relationship with one
distracted from any focus organization rather than to switch continually among
customer satisfaction on the health of this new providers in their search for value. Disney is a good ex-
customers’ evaluation of a good or toy. The plastic wrist- ample of an organization focused on building long-term
service in terms of whether it has band on the Step-iT was relationships with its customers. Disney managers un-
met their needs and expectations
found to cause rashes derstand that their company creates products and expe-
relationship marking a and other skin irritations. riences that become an important part of people’s lives
strategy that focuses on keeping
This forced McDonald’s and memories. This understanding has made Disney a
and improving relationships with
current customers to recall 3.9 million units.5 leader in doing “right by the customer”—starting with
The company offered a the front-line cast members who interact directly with
the public and encompassing all employees in all de-
partments, who assess each decision based on how it
will affect the customers and their relationship with the
CONDITIONS OF EXCHANGE
Disney brand.
An exchange can take place only if the following
Customer Relationship Management five conditions exist:
An important result of the relationship marketing ori- 1. At least two parties are involved.
entation has been the concept of customer relation-
2. Each party has something that may be of
ship management (CRM). While born as a data-mining
value to the other party.
system to help marketers understand each customer
on an individual level, CRM best serves the ultimate 3. Each party is capable of communication and
goal of meeting the needs of customers and building delivery.
relationships. 4. Each party is free to accept or reject the
A key aspect of relationships—and any CRM exchange offer.
system—is trust. To build trust, companies have to be
5. Each party believes it is appropriate or
willing to share their stories with customers and listen
desirable to deal with the other party.
to and act on what customers desire. Doing this has not
Source: Philip Kotler, Marketing Management, 11th ed. (Upper Saddle River, NJ:
always been possible when companies use data mining Prentice-Hall, 2003), 12.
from various sources, but it is possible with social and
mobile marketing.
Creating a 24/7/365 relationship with customers is
now possible, if companies are willing to plug in to the the goods and services we want. Exchange does not,
online world, an arena not only for exchange but also for however, require money. Two people may barter or trade
true communication. such items as baseball cards or oil paintings.
In the days of Henry Ford, door-to-door salesmen,
Customer Value Customer value is the rela-
and real-life Mad Men, there was never the opportunity
tionship between benefits and the sacrifice necessary to
to understand and target individual customers. However,
obtain those benefits. Customer value is not simply a mat-
this goal is now possible. Just head to a popular social
ter of high quality. A high-quality product that is available
media site, and you will find an interactive world with
only at a high price will not be perceived as good value,
endless potential.
nor will bare-bones service or low-quality goods selling
An important chapter in this text (Chapter 9) is all
for a low price. Instead, customers value goods and ser-
about CRM and will pull all the pieces together and
vices that are of the quality they expect and are sold at
show the possibility of truly evolving from “interruption
prices they are willing to pay. Value can be used to sell
to interaction.”
both a Mercedes-Benz and a $3 frozen dinner.
Market Segments Market segments are groups
1-3 Key Marketing Terms of individuals, families, or companies that are placed
together because it is believed that they share similar
Now that we have seen the past and given an indication needs. As we saw in the discussion of the evolution of
of the future of marketing, it is important to cover some marketing earlier in this chapter, segmentation has gone
of the fundamental aspects of marketing that every from not being done at all to being done at an almost
student of marketing should know. These ideas will individual level. Market segments form the core of mar-
form the basis of all remaining chapters and will provide keting efforts because they represent the source of cus-
you with the necessary tools to discuss and learn about tomer needs.
marketing. To target specific
market segments, much exchange people giving up one
thing to receive another thing they
has to be done to research
1-3a Exchange the lives, trends, and needs
would rather have
One desired outcome of marketing is an exchange— of a particular group. Later customer value the
relationship between benefits and
people giving up one thing to receive another thing they in the book, we will look at the sacrifice necessary to obtain
would rather have. Normally, we think of money as the how marketing research those benefits
medium of exchange. We “give up” money to “receive” (Chapter 5), consumer
The Force is with Disney
A recent example of Disney’s relationship mar-
keting was the case of an eight-year-old boy with
autism who visited Disney World’s Hollywood
Studios theme park in Florida in June 2013. The
boy, Josiah, had been looking forward to particip-
ating in the Jedi Training Academy—and just as he
was to enter the stage to “fight” Darth Vader, the
Florida skies opened up, and the rest of the event
was rained out. Josiah was crestfallen, and his
mother was worried he would retreat into his own
world. The mother, Sharon Edwards, rushed over to
Courtesy of Sharon Edwards and David Piggott

the Disney employee playing the “Jedi Master” and
explained the situation. The actor, David Piggott,
told her in a hushed voice to meet him at the side
of the building.
David, still in character as the Jedi Master,
handed Josiah a lightsabre signed by Darth Vader.
Josiah was ecstatic; he had gone from devastation
to elation in minutes thanks to a kind act by this
Disney employee.
Sharon decided she had to share this of thousands of views. As word spread, new media
experience, so she wrote a post in her blog called began to get involved, and the story travelled
“The Most Beautiful Ruined Moment,” describing around the world. Sharon had been worried
their encounter with an employee who went that the publicity from this incident might get
beyond his duty to make a memorable moment David Piggott (the Jedi Master) in trouble for not
for her son. Soon, the blog was being passed following protocol. Instead, Disney responded
around social media and on autism family support by saying that it will be using this incident as an
websites, and within days her blog had hundreds example of “good customer relations.”
Sources: John I. Carney, “A Jedi Master and the Blog Side of the Force,” Times-Gazette, June 19, 2013, www.t-g.com/story/1979291.html (accessed September 2013); and
Sharon Edwards, “The Most Beautiful Ruined Moment,” June 13, 2013, http://writeshesays.wordpress.com/2013/06/13/the-most-beautiful-ruined-moment/ (accessed
September 2013).
decision making (Chapter 6), and business marketing addresses two of the three possibilities and indirectly
(Chapter 7) help provide the necessary tools to develop addresses the other.
strong market segments (Chapter 8).
Building Relationships Attracting new cus- The Marketing Mix The marketing mix—also
tomers to a business is only the beginning. The best com- known as the 4Ps of marketing—refers to product, price,
panies view new-customer attraction as the launching place, and promotion. Each of the 4Ps must be studied
point for developing and enhancing a long-term relation- and developed to create a proper strategy to go after a
ship. Companies can expand their market share in three market segment:
ways: attracting new customers, increasing business with ●● Product relates to the tangible and intangible as-
existing customers, and retaining current customers. pects of a company’s offering. A product could be a
Building relationships with existing customers directly can of soup or a virtuoso ballet performance; both
Research In Motion—A Cautionary
Tale
In the early 2000s, Research In Motion (RIM) was with this really cool
touted as an unbelievable success story. BlackBerrys technology about
Used with permission of Bloomberg L.P. Copyright © 2017.

were omnipresent and seen in the hands of world the hinge. Look at
leaders (Barack Obama) and celebrities (Kim Kar- how this works.’
dashian). With a security system beyond reproach There is probably
and a messaging system that was as simple as still a warehouse full
it was addicting, the Blackberry and Research In of them.” In the end,
Motion had arrived. So what went wrong? Look at customers stopped
the magazine photo below that shows a BlackBerry buying BlackBerrys,
All rights reserved.

beside ancient relics, showing it as a relic. and app makers
Among the many things that went wrong was stopped producing
RIM’s lack of interest in researching and under- applications for
standing customer needs. The BlackBerry was BlackBerry devices.
created to provide security and messaging—but Research In Motion focused too
what did consumers want? In 2007, research was much on its platform and security
showing that consumers were looking for “candy features and forgot about the
bar phones” that would have a simple user interface customer. The makers of the
and a single touch screen. What did BlackBerry BlackBerry failed to see that con-
put out to market? The Pearl Flip, a flip phone sumers, not businesses, would lead
that consumers were no longer inter- the smartphone market in the future.
ested in. A member of RIM’s customer Consumers were looking for touch screens
base management team noted the and a fully interactive communication device.
interaction between the sales RIM gave consumers keyboards and security
o
ot
Ph
team that wanted the candy features they did not ask for. There was never an
ck
to
yS
bar phone and the company’s attempt to evolve with customers and their chan-
am
Al
rt/
development team: “All the sales ging needs. Blackberry suffered from the “Field of
o
Tw
ew
guys were like…we asked you for Dreams” belief—if you build it, they will come. Soon
dr
An
big screens, touchscreens, more of these candy bar customers might have to visit a museum to see what
styles. And they were like ‘Yeah, but we came up a BlackBerry looks like.
Source: Felix Gillette, Diane Brady, and Caroline Winter, “The Rise and Fall of BlackBerry: An Oral History,” BusinessWeek, December 5, 2013, www.businessweek.com/articles/
2013-12-05/the-rise-and-fall-of-blackberry-an-oral-history (accessed August 4, 2014).
companies will need to look at what needs are being ●● Place relates to much of the behind-the-scenes ac-
satisfied and how to best package all the aspects of the tivities of making an offering available to the custom-
offering so that the consumer will be satisfied. er. This is the world of channels and logistics, where
●● Price relates to the quantifying of a value in exchange decisions made on how to get a company’s product
for a company’s offering. Competition is a significant to market could be more important than the product
issue here, as are customer perception and economic itself.
factors. Setting the right price is all about taking those ●● Promotion relates to what most people believe mar-
factors into consideration and making the best deci- keting to be about. These are the most visible activi-
sion that satisfies the bottom line and the customer. ties of marketing, the ones that get into the news and
1-4b Marketing Is a Rewarding Career
CUSTOMER VALUE Marketing can provide both financial and personal
rewards. Marketing graduates have the flexibility of
Marketers interested in customer value seeking employment in any industry, profit or nonprofit,
public or private. This is because there is an inherent need
●● offer products that perform
for marketing in any organization that has a customer—
●● earn trust through loyalty programs whether final consumers or businesses’ customers.
●● avoid unrealistic pricing by communicating Careers in marketing are varied and offer many
clearly opportunities to those looking for a constantly evolving
and changing marketplace. There are entry level
●● give consumers the facts and the opportunity
positions like marketing coordinators and marketing
to learn more
analysts; these positions offer an opportunity for aspiring
●● offer an organization-wide commitment to marketers to learn the skill set necessary to be successful
service and after-sales support in marketing. These are often challenging roles that are
●● partner with consumers to co-create rewarded with greater opportunity and responsibility.
experiences that consumers want As you become versed in the world of marketing, more
senior level positions become available. Job titles like
marketing manager, project manager, and vice president
the faces of customers. Trying to find the right bal- of marketing all display the importance of leadership and
ance of what techniques to use (including advertis- management while still applying the basic concepts of
ing) is a constant challenge, as is keeping a consistent marketing along with advance techniques of analysis and
feel and look. strategy.
A great advantage to a career in marketing lies in
the variety of industries in which marketing jobs are
1-4 Why Marketing Matters present. Although there are many jobs in the areas
of advertising, product management, and marketing
research, there are also many opportunities to apply the
Given that this chapter started out by proclaiming
concepts of marketing to various situations. Numerous
the death of marketing, the question that needs to be
marketing opportunities can be found in government
asked is Why does marketing matter? Here are a few
(at the municipal level especially), but also in sports,
compelling reasons.
the arts, and nonprofit worlds. There is no shortage of
opportunity in the field of marketing—finding the right
1-4a Marketing Is Part of Every Company opening often comes down to how well students can
No matter what discipline in business you choose to learn the material (like reading a textbook like this) and
pursue, you will have customers. If you do not concern combine that with skills that are invaluable in creating a
yourself with the customer, you will cease to have any career in marketing.
(just ask BlackBerry). To excel and advance in the field of marketing, strong
All companies, from multinationals to independent communication and analytical skills are essential. Now
consultants, need to be customer focused. We know now that we know that marketing forms a fundamental part
that marketing provides this customer focus; therefore, of any organization, a good marketer will understand the
understanding marketing means understanding your importance of working with other departments to ensure
customer. customer needs are met. As well, managers in marketing
Successful companies have a strong understanding will deal constantly with uncertainty, so being able to
of the importance of marketing. Apple, the incredibly analyze diverse and often divergent information will be
successful technology firm, created a three-point key in becoming a successful marketing professional.
marketing philosophy when it was founded in 1977.
The first point of that philosophy is the most telling: 1-4c Marketing Provides an Important
“Empathy—we will truly understand [the customer’s]
needs better than any company.” This fundamental
Skill Set
belief lies at the core of many successful organizations, Even if your career aspirations are not in the field of
including Apple.10 marketing, you will still need to sell yourself to a future
employer. Skills developed when learning marketing—
how to understand needs, research trends, create an
offering, and communicate benefits—all relate back to
a person’s job search.
Brett Wilson, who is quoted on his views of mar-
keting in the picture on this page, is a successful
Canadian entrepreneur and former panellist on the
television show Dragons’ Den. He has noted the
importance of marketing as part of the skill set of any
aspiring businessperson. When asked about his best
business advice, Wilson stated, “Study marketing,
entrepreneurship, and philanthropy. The incredible
relevance of these courses merits mention. You cannot
over-study these life-enhancing courses at any stage in
your career.” 11
1-4d Marketing Is Part of Everyday Life
Malcolm Taylor/Getty Images

The tasks in marketing, as we have seen in this chapter,
go well beyond a simple advertisement or sales call.
Marketing includes important tasks that may not always
be associated with marketing—such as distribution—
that ensure that the products are on store shelves or
delivered from a favourite website.
Being informed about marketing means being Marketing, in my mind, is invaluable and
an informed consumer. Most Canadians’ lives are full underrated by most people.12—Brett Wilson
of activities and tasks that will have them confronting
marketing messages from numerous organizations. By
learning about marketing, you will be better able to You now have the necessary background and
discern a good message from a bad one and hold those understanding of marketing. Turn the page to start
companies that are targeting you to a higher standard. learning about what marketing has to offer.
Study Tools
IN THE BOOK, YOU CAN:
✔ Rip out the Chapter in Review card at the back of the book.
ONLINE, YOU CAN:

✔ Stay organized and efficient with a single online destination with all the course material and study aids you need to succeed.
Go to nelson.com/student to access the digital resources.
315
Side Launch
B r e w i n g C o m pa n y
3
Continuing Case
Beer Is Everywhere People Are
“Find out where people are going—and buy
land before they get there.” This quotation
attributed to American Cherokee leader and
Confederate Colonel William Penn Adair is
from more than 150 years ago. Perhaps never,
though, has a more poignant mantra for mar-
keting been captured in one phrase.
For Side Launch Brewing Company,
g Com pan y
110
the award-winning craft brewery based in
Sid e Lau nch Bre win

Collingwood, Ontario, being the best beer
where people are going is a parallel philo-
sophy. If marketing is about the discovery
and satisfaction of customer needs, Side Launch, as
founder Garnet Pratt suggests, wants to be the beer companion that marks
these occasions, both good and bad, that accompany people through the
milestones of their life. “When you think about the journey of your adult life,
beer is just there, humbly being a part of it. Weddings, funerals, graduations,
and birthdays. It’s there even in your more routine activities. It’s also waiting
for you after you’ve mowed the lawn or had a hard day at work. It’s there
when you’re among
95 friends, or alone, it’s just there. If you’re a beer drinker,
why wouldn’t you want that beer to be the best beer?”
Marketing is accomplished when value is exchanged. Value is the solution
to a need. But needs, as we’ll discuss throughout the book, are not always
obvious, nor do we even always know we have them. They sometimes knock
us over the head with a direct and vivid message: “I’m hungry—feed me.” But
sometimes those needs will be encrypted in feelings that are less obvious: “I’m
vulnerable—comfort me.”
The latter is one of an infinite number of reasons for the rapid growth
in popularity of craft beer. “The beer market has changed,” asserts Chuck
Galea, VP Sales and Marketing, “primarily because beer drinkers have
changed. They are more sophisticated and know what really good beer
tastes like. People now choose a beer to go along with a season, or an oc-
casion, or even a food group. It’s the new wine, you know, where there are
beer tastings and beer food pairings. And Side Launch is right there now.
We’re getting in people’s hands, they’re trying us, they’re liking us, and
they’re helping to tell our story.”
Founding brewer Michael Hancock refers to his beers as “accessible.”
181 73
“My tagline for our Dark Lager is that it’s the dark beer for people who
don’t think they like dark beer. Our Wheat Beer often appeals to people
275
202
384
400
who may not even like beer; you know, it was called ‘ba-
nana beer’ when it first came out as it had a totally different
364 flavour profile due to the low level of hops.” Michael knows
of what he speaks—being one of the true pioneers of wheat
beer brewing in all of North America. “Michael is the keeper of
quality,” adds Dave Sands, VP Operations, who has a pedigree
304
of beer industry expertise, stemming from a formal postsecond-
ary brewing education and over 12 years working with the two
biggest beer conglomerates in the world (Anheuser-Busch InBev
and Molson-Coors). “We start with the basis of a quality culture,
which sets a level of expectation among the basic things. You find 364
the best ingredients from the best suppliers and mix them with the
highest standards of production—it’s like cooking—you’re going to end
up with a fundamentally better product.”
You’ll be reading about Side Launch in a continuing case study
throughout this book, as we view each chapter concept through the lens of
304
Side Launch Brewing Company. You’ll learn how, as Garnet puts it, Side Launch
makes a product that is “approachable and drinkable” but is also “made well,
and packaged well, delivered well, and sold well.” But don’t just take her word
for it. Witness the wild 300 percent growth over its first three years, tuck in a
handful of nationally sought-after beer awards, and mix in a healthy dose of
consistently high beer reviews among the most influential ratings sites, and
344
you’ll soon see that the story of Side Launch is a story in marketing.
Questions
What is the “need” being satisfied through the sale of beer?
1. 274
2. Is there anything different about the product (beer) that the Side Launch
Brewing Company makes that pursues a more specific need?
3. What are some of the initial things you might consider to be a part of
the Side Launch value proposition?
204
275
264
70 256
g Com pan y
Sid e Lau nch Bre win
276
NEL 120 CHAPTER 1: An Introduction to Marketing 13
2 The Marketing
Environment, Social
Responsibility,
and Ethics
LEARNING Outcomes
AustralianCamera/Shutterstock.com
2-1 Discuss the external environment of marketing, and explain how it affects a firm
2-2 Describe the competitive factors that affect marketing
2-3 Describe the regulatory factors that affect marketing
2-4 Describe the economic factors that affect marketing
2-5 Describe social factors that affect marketing
2-6 Explain the importance to marketing managers of current demographic trends
2-7 Describe technological factors that affect marketing
2-8 Discuss corporate social responsibility
2-9 Describe the role of ethics and ethical decisions in business
“Nothing is more important than preparation.”

—Simon Sinek1
2-1 The External Marketing of potential buyers—the target market. A target

market is a defined group of potential customers that
Environment managers feel is most likely to buy a firm’s product.
Over time, firms adjust the marketing mix to
One of the most important roles of marketing managers reflect the changing needs and composition of the
is overseeing the development of the marketing mix. target market, brought on by the changes in the envir-
Recall from Chapter 1 that a marketing mix is the unique onment in which consumers live, work, and make pur-
combination of product, place (distri bution), promo- chasing decisions. Also, as markets mature, some new
tion, and price strategies. consumers become part of the target market; others
target market a group (The marketing mix is also drop out. Those who remain may have different tastes,
of people or organizations for addressed in Chap ter 3.) needs, incomes, lifestyles, and buying habits than the
which an organization designs,
implements, and maintains a The mar keting mix is, of original target consumers. They, along with their beha-
marketing mix intended to meet course, under the firm’s viours, will also be affected by fluctuations in the eco-
the needs of that group, resulting control and is designed to nomy and changes in socio-political and technological
in mutually satisfying exchanges appeal to a specific group events, as well as offerings from other competitors.
Controllable and uncontrollable variables affect The factors within the external environment that
the target market, whether it consists of consumers or are important to marketing managers can be classified as
business purchasers. Although companies can control competitive, regulatory, economic, social, and technolo-
the marketing mix, as well as other internal activities of gical factors. Often referred to as the CREST model, this
the business such as operations and finance, they cannot scanning tool is shown in Exhibit 2.1.
control elements in the external environment that con-
tinually evolve, thus moulding and reshaping the target
market. Marketing managers can only shape and reshape Exhibit 2.1 The CREST Model
the marketing mix to react to the external environment,
in an attempt to influence the target market. However,
they may not be as much at the mercy of the external Competitive
environment as first perceived.
2-1a Understanding the External

Environment
Technological Regulatory
By understanding the external environment, marketing
managers and the firms they work for can intelligently plan Your
for the future. However, the environment neither rests Company
nor takes time off. It is in constant motion—sometimes
wreaking havoc like a hurricane, resulting in threats to a
firm. At other times, it brings sunshine and blue sky as far
as the eye can see, giving firms valuable opportunities. But
it is possible to foresee most of these external forces. Many Social Economic
organizations assemble a team of specialists to continu-
ally collect and evaluate environmental information—a
process called environmental scanning.
NEL CHAPTER 2: The Marketing Environment, Social Responsibility, and Ethics 15
slows, costs rise, available resources tighten, and firms
2-2 Competitive Factors must work harder to maintain both their profits and their
market share, regardless of the form of the competitive
The competitive environment encompasses the com- market. Firms are turning more and more to innovation
petitors a firm must face, both directly and indirectly, across all parts of the marketing mix to chisel out some
the relative size of the competitors, and the degree of kind of advantage.
interdependence within the industry. Management has This creates a double-edged sword for companies
little control over the competitive environment con- in gathering information on any form of competition.
fronting a firm. In the 1979 Harvard Business Review Their competitors are leveraging the power of big data,
article “How Competitive Forces Shape Strategy,” analytics, and social media to gather information about
business guru Michael Porter identified the five forces their customers—and then relate to them across a host
of competition2 (see Exhibit 2.2) to assist in planning of different platforms, most of which are open for public
defence against such competition: viewing. The problem is that when the company gathers
intelligence on its competitors, it is also being viewed
●● Direct competitors: Competitors most closely mat
by its competitors, creating an obvious dilemma. Firms
ching a firm’s product offering.
must use social media to tell their story and build com-
●● Substitutes: Competitors whose products can satisfy munity, but in doing so they leave themselves wide open
the same need, but in different ways. to being viewed by competitors.
●● New entrants: Competitors who might emerge due
●●
to entry barriers present in the industry.
Suppliers: Business partners, such as materials pro-
2-3 Regulatory Factors
ducers, competing for profit margins from the firm Every aspect of the marketing mix is subject to laws
and thus motivated to charge the highest price for and restrictions created by regulators. It is the duty of
goods or services provided. marketing managers and their legal counsel not only to
●● Buyers: Business partners, such as retailers, com- understand these laws and conform to them today, but
peting for profit margins from the firm and thus mo- also to track and predict the shaping and reshaping of
tivated to pay less for goods or services purchased laws. Failure to comply with regulations can have major
from the firm. consequences for a firm. Sometimes just sensing trends
The five forces of competition demonstrate how and taking corrective action before a government agency
competition is not always for market share, as it is acts can help avoid the negative effects of regulation.
between two competing companies targeting the same Marketers must balance caution with risk. It is all
market. It is also about competition over dollars, as seen too easy for a marketing manager—or sometimes a
in Exhibit 2.2, between a company and its suppliers lawyer—to say no to a marketing innovation that actually
and buyers. Either way, as Canadian population growth entails little risk. For example, an overly cautious lawyer
could hold up sales of a desirable new product
by warning that the package design could
Exhibit 2.2 FORCES OF COMPETITION prompt a copyright infringement suit. Thus
marketers need a thorough understanding of
the laws established by the various levels of
New
Entrants
government and regulatory agencies to govern
marketing-related issues.
Substitute Suppliers It is also important to note that regulations
don’t just fall from the sky unexpectedly. They
are, in fact, shaped by human beings who
respond to events that affect them personally.
Distracted driving laws, for instance, would
never have come into place if innocent people
Direct Company Buyers
weren’t being seriously harmed. The fact
that injury and death were resulting from
distracted driving gave way to public outcry
and eventually to distracted driving laws.
Exhibit 2.3 SPECIALIZED FEDERAL LEGISLATION AFFECTING BUSINESS
Legislation Major Provisions
Competition Act Promotes the efficiency and adaptability of the Canadian economy. Expands opportunities for Canadian participation in world
markets, while at the same time recognizing the role of foreign competition in Canada. Ensures that small and medium-sized
enterprises have an equitable opportunity to participate in the Canadian economy. Provides consumers with competitive prices
and product choices.
Consumer Packaging and Labelling Act Requires prepackaged consumer products to bear accurate and meaningful labelling information to help consumers make
informed purchasing decisions. It prohibits false or misleading representations and sets out specifications for mandatory label
information.
Trade-marks Act Regulates and protects trade names and trademarks.
Textile Labelling Act Requires that textile articles bear accurate and meaningful labelling information to help consumers make informed purchasing
decisions. It prohibits false or misleading representations and sets out specifications for mandatory label information.
Health Canada’s Food and Drugs Act & Establishes standards for the safety and nutritional quality of all foods sold in Canada.
Regulations
Motor Vehicle Safety Act Regulates the safely standards for the manufacture and importation of motor vehicles.
Personal Information Protection and Supports and promotes electronic commerce by protecting personal information that is collected, used, or disclosed in certain
Electronic Documents Act circumstances, by providing for the use of electronic means to communicate or record information or transactions.
Privacy Act Governs the personal information handling practices of federal government institutions. Applies to all the personal information
the federal government collects, uses, and discloses—whether about individuals or federal employees.
Source: Zikmund/D’Amico/Browne/Anthony/Monk/Donville. Effective Marketing, 1E. © 2008 Nelson Education Ltd. Reproduced by permission. www.cengage.com/permissions;
Competition Bureau (https://www.competitionbureau.gc.ca; accessed January 17, 2017); Health Canada (https://www.canada.ca/en/health-canada.html; accessed January 17,
2017); Justice Laws Website (https://www.laws-lois.justice.gc.ca; accessed January 17, 2017); Office of the Privacy Commissioner of Canada (https://www.priv.gc.ca (accessed
January 17, 2017).
2-3a Federal Legislation managers, especially those working for national com-
panies, must be aware of the differences in each
The federal legislation affecting how business is con-
province’s and territory’s legal environment, and they
ducted in Canada is administered by the Competition
also need a sound understanding of federal legislation
Bureau, an independent agency of Industry Canada. that affects their industry.
This bureau encompasses several branches and is
responsible for enforcing laws covering such areas
as bankruptcy, trade practices, competition, credit, 2-3c Self-Regulation
labelling and packaging, copyrights, hazardous
Instead of facing explicit legislation from either the pro-
products, patents, and trademarks.3 Some of the spe-
vincial, territorial, or federal governments, many business
cialized federal legislation that affects businesses and
groups in Canada have formed associations that police
business dealings is listed in Exhibit 2.3.
themselves. This arrangement is called self-regulation.
One such association is Advertising Standards Canada
2-3b Provincial and Territorial Laws (ASC), established by Canada’s advertising industry to
In Canada, our constitution divides legal jurisdictions monitor honesty and fairness in advertising. Advertising is
between the provincial or territorial legislatures and the a very visible form of communication strategy, and some
federal government, thus allowing each level of govern- firms come under fire from consumer groups regarding
ment to legislate in the areas for which it has been given deception in their advertising. The ASC provides clear
responsibility. For example, Québec’s Bill 101 restricts ethical guidelines to both advertisers and advertising
the use of the English language in certain advertising agencies in its document
and promotion material. A national company, such as “The Canadian Code Competition Bureau the
Tim Hortons, may have to alter its advertising and store of Advertising Stand- federal department charged with
signage in Québec to be in compliance. Alberta allows ards.”4 Another group, the administering most marketplace
laws
the sale of alcoholic beverages by retailers, whereas Canadian Association of
Ontario has provincially run Liquor Control Board of Broad casters (CAB), has self-regulation programs
Ontario (LCBO) outlets. Airlines, on the other hand, are established a code of ethics voluntarily adopted by business
groups to regulate the activities of
under federal jurisdiction, and the provinces do not have for its member television their members
direct powers to regulate airline companies. Marketing and radio stations. The
Canadian Marketing Association (CMA) has made great means half of all Canadian households earned less than
strides in developing guidelines and ethical practices for and the other half earned more than that amount.5
its thousands of member marketing firms. Education is the primary determinant of a person’s
earning potential. According to Human Resources and
Consumer Privacy A marketing manager must
Skills Development Canada, the benefits of higher edu-
also be aware of the increasingly important area of con-
cation include higher earnings, greater savings and assets,
sumer privacy, especially because of the vast amounts of
higher growth in earnings, and higher income during
data that almost any firm can collect and store by using
retirement. In addition, higher education reduces the risk
the latest cloud technology. Everything from customer
of experiencing low income and unemployment. The bene-
information to survey data is valuable to companies, but
fits of higher education are consistent across all provinces.6
privacy issues need to be addressed. Firms should be
Along with willingness to buy, or ability to buy,
able to justify the type of information they have and
income is a key determinant of target markets. The mar-
how it is to be used. Other issues of note are the secu-
keter who knows where the money is knows where the
rity of information storage and the sale or transfer of
markets are. If you are seeking a location for a new Louis
information to others. Increasingly, and largely as a re-
Vuitton retail store, a brand that caters to high-income–
sult of pressure from consumers’ groups, governments
earning consumers, you would probably concentrate on
are looking at developing, or have already developed,
areas where residents have incomes that are significantly
privacy legislation.
higher than the median.
Canada’s federal government, like the governments
In Canada, 25.2 percent of households spend
of many other countries, already has legislation relating
more than 30 percent of their income on shelter, far
to privacy. The Privacy Act (PA) and the Personal
exceeding the affordable housing standards. Once many
Information Protection and Electronic Documents Act
Canadians have paid for their essential living expenses,
(PIPEDA) were put in place to protect the privacy of
they are left with little or no spare cash. As a result,
our personal information and to ensure that its collec-
many Canadians have turned to credit to buy the things
tion, use, and disclosure are both legal and ethical. The
they want. Credit gives middle- and lower-income con-
latest protection, established in July 2014 by the federal
sumers the financial flexibility that only the rich used to
government to improve and protect consumer privacy,
enjoy. Since the 1990s, the median income for Cana-
is referred to as the Canadian Anti-Spam Legislation
dian households has risen less than median household
(CASL). Its intent is to deter the most damaging and
spending. How can the typical family afford to live? The
deceptive forms of spam. The CASL, which is enforced
result has been an increase in household debt. As of
by the Canadian Radio-television and Telecommunica-
2016, the average Canadian is now $1.65 in debt for
tions Commission (CRTC), the Competition Bureau,
every dollar they earn.7 This situation has led to the
and the Privacy Commissioner, undergoes review and
growth of off-price retailers and the demand by Cana-
updates as deemed necessary. Canadian consumers are
dian shoppers for low prices. Debt, of course, means
concerned about their privacy, but most are unaware of
that consumers must eventually use their income to
the details of this legislation. Therefore, marketers must
make interest payments instead of buying more goods
be proactive in ensuring consumer privacy.
and services. The compounding nature of interest pay-
ments, combined with the consumer behavioural trait
2-4 Economic Factors

In addition to competitive and regulatory factors, mar-
keting managers must understand, forecast, and react to
the economic environment. The three economic areas
of greatest concern to most marketers are consumers’
incomes, inflation, and recession.
SpeedKingz/Shutterstock.com
2-4a Consumers’ Incomes

As disposable (or after-tax) incomes rise, more families
and individuals can afford the “good life.” The median
total family income in Canada was $78,870 in 2014; that
of credit-based spending, can have serious negative res- Inflation pressures consumers to make more eco
ults on individuals, which leads to reduced spending— nomical purchases and still maintain their standard of
which is bad for businesses in general. living. When managers create marketing strategies to
cope with inflation, they must realize that, despite what
2-4b Purchasing Power happens to the seller’s cost, buyers will not pay more for
a product than the subjective value they place on it. No
Rising incomes don’t necessarily mean a higher standard matter how compelling the justification might be for a
of living. Increased standards of living are a function of 10 percent price increase, marketers must always
purchasing power. Purchasing power is measured by examine the impact of the price increase on demand.
comparing income to the relative cost of a set standard Many marketers try to hold prices level as long as is
of goods and services in different geographic areas, practical. (See Chapter 13 for more information on the
usually referred to as the cost of living. Another way to strategies marketers use during periods of high inflation.)
think of purchasing power is income minus the cost of
living (i.e., expenses). In general, a cost-of-living index
2-4d Recession
takes into account the costs of housing,
food and groceries, transportation, A recession is a period of eco-
utilities, healthcare, and miscel- nomic activity characterized by
laneous expenses, such as clothing, negative growth. More precisely,
services, and entertainment. The a recession occurs when the gross
© iStockphoto.com/s-cphoto
cost of living is generally higher in domestic product falls for two con-
major urban markets. For example, secutive quarters. The recession that
a worker living in Toronto must earn began in December 2007 affected
nearly three times as much to have Canada less than the rest of the world.
the same standard of living as someone Statistics Canada’s official report on
in Sydney, Nova Scotia. the 2008–2009 slump shows it was a
When income is high relative to recession that was milder than two
the cost of living, people have more previous economic dips. Canada
discretionary income. That means experienced a recession that was
they have more money to spend on less severe and shorter than in the
nonessential items (in other words, on other G7 nations, and our financial institutions ended up
wants rather than needs). This information in a much better position than those in the United States,
is important to marketers for obvious reasons. Consumers where many required government aid to stay afloat. The
with high purchasing power can afford to spend more effects of the 2008 recession are still being felt in high
money without jeopardizing their budget for such neces- unemployment rates as the imbalances sparked by the
sities as food, housing, and utilities. They also have the event remain unaddressed.8 However, rich Canadians
ability to purchase higher-priced necessities, such as a more report being financially
expensive car, a home in a more expensive neighbourhood, better off after the 2008 purchasing power a
recession than before.9 To comparison of income versus the
or a designer handbag versus a purse from a discount store.
relative cost of a set standard of
cope during the recession, goods and services in different
many consumers switched geographic areas
2-4c Inflation to store brands, which
discretionary income the
Inflation is a measure of the decrease in the value of on average cost less than amount of money people have to
money, generally expressed as the percentage reduction in manufacturers’ brands. spend on nonessential items
value since the previous year, which is the rate of inflation. More consumers began
inflation a measure of the
Thus, in simple terms, an inflation rate of 5 percent means using coupons than ever decrease in the value of money,
5 percent more money is needed today to buy the same before, and group coupon expressed as the percentage
basket of products that was purchased last year. If inflation sites started springing reduction in value since the
is 5 percent, you can expect that, on average, prices have up all over. In a recession, previous year
risen about 5 percent over prices in the previous year. Of consumers consider the recession a period of economic
course, if pay raises are matching the rate of inflation, price–value relationship activity characterized by negative
growth, which reduces demand for
then employees will be no worse off with regard to the deliberately before making
goods and services
immediate purchasing power of their salaries. purchases.
people expect to purchase products. In addition, in most
cases, other environmental forces of concern to mar-
keters often begin with social forces.
Marketing-Oriented Values
The Canadian Press/Jonathan Hayward
2-5a
A value is a strongly held and enduring belief. Our
values are key determinants of what is important and not
important, what actions we take or do not take, and how
we behave in social situations. Our values are typically
formed through our interactions with family, friends, and
other influencers, such as teachers, religious leaders, and
politicians. The changing environment can also play a
Recessions can sometimes be isolated geographically
key role in shaping our values. Four basic values strongly
as well. When world oil prices began to plunge in mid-
influence attitudes and lifestyles of Canadian consumers:
2014, so too did the economy of the province of Alberta,
which relied heavily on the oil industry. From 2014 to ●● Self-sufficiency: Every person should stand on his or
2016, Alberta’s GDP fell by 6.5 percent.10 To add insult her own two feet.
to injury, wildfires in 2016 led to the evacuation of over ●● Upward mobility: Success should come to anyone
80,000 residents of Fort McMurray, Alberta, and tempor- who gets an education, works hard, and plays by the
arily shut down production of oil sands operations. The rules.
cost of the shutdown alone shaved another 0.33 percent ●● Work ethic: Hard work, dedication to family, and
off Alberta’s GDP and was significant enough to make frugality are moral and right.
a minor dent in the Canadian GDP.11 The wildfires are
a good example of an environmental factor. Envir-
●● Fairness: No one should expect to be treated differ-
onmental factors are often treated separately, as part of ently from anybody else.
the natural environment. Like any of the environmental These core values hold for a majority of Canadians
forces described here, the natural environment cannot today and have led to the perception that Canadians are
be controlled by firms. That said, natural disasters, aside trustworthy, family oriented, conservative, and increas-
from the obvious human toll, usually end up affecting the ingly eco-conscious. Canadian society is known to be tol-
economic environment, which is why we are discussing erant and respectful of other cultures.
them here. Either way, in cases of geographically isol- Values also influence our buying habits. Today’s con-
ated peaks and valleys in the economy, national brands sumers are demanding, inquisitive, and discriminating.
in particular have to manage their marketing strategy No longer willing to tolerate products that break down,
accordingly, providing one plan for the isolated area, and we insist on high-quality goods that save time, energy,
another for the rest of the country. and often calories. Shoppers rank the characteristics of
product quality as (1) reliability, (2) durability, (3) easy
maintenance, (4) ease of use, (5) a trusted brand name,
2-5 Social Factors and (6) a low price. As shoppers, we are also concerned
about nutrition and want to know what’s in our food, and
Social change is perhaps the most difficult external vari- many of us have environmental concerns.
able for marketing managers to forecast, influence, or
integrate into market ing 2-5b The Growth of Component Lifestyles
environmental factors plans. Social factors incl
u de
Canadian consumers today are piecing together
noncontrollable factors caused by demographics, as well as
natural disasters, which negatively our attitudes, values, and
component lifestyles. A lifestyle is a mode of
or positively affect organizations living; it is the way we decide to live our lives. In other
lifestyles. Social factors
words, we choose products and services that meet our
component lifestyles influence the products
mode of living that involves diverse needs and interests rather than conforming to
people buy, the prices paid
choosing goods and services that traditional stereotypes.
for products, the effective-
meet one’s diverse needs and In the past, a person’s profession—for instance,
interests rather than conforming ness of specific promotions,
banker—defined his or her lifestyle. Today, a person can
to a single, traditional lifestyle and how, where, and when
be a banker and also a gourmet cook, a fitness enthusiast,
a dedicated single parent, and an Internet guru. Each unmarried, with or without children; and gay and lesbian
of these lifestyles is associated with different goods and couples are caring for each other and raising children
services and represents a target audience. Component together. In addition, some adult children are following
lifestyles increase the complexity of consumers’ buying a trend of returning to the nest and living with their
habits. The unique lifestyles of every consumer can parents, and an increasing number of people are living
require a different marketing mix. alone.13 Families today still demonstrate how, as indi-
viduals, we accept responsibility for each other.14
2-5c Families Today We face significant challenges in how we carry out
our family responsibilities. For families today, two key
The Vanier Institute of the Family defines the family
resources are required—time and money—and they are
today as “any combination of two or more persons who
both in short supply. To meet financial obligations it is
are bound together over time by ties of mutual consent,
common for couples to work and even, in some cases,
birth and/or adoption or placement and who, together,
hold multiple jobs. This situation results in further time
assume responsibilities for variant combinations of some
poverty and affects the consumption choices that a
of the following:
family makes. The recent developments in technology
●● Physical maintenance and care of group members combined with the time poverty of Canadian families has
●● Addition of new members through procreation or led to an increase in the use of social media not only as a
adoption communication tool but also as an information-gathering
and shopping tool. Decision makers in families are
●● Socialization of children
increasingly using the Internet to do chores, plan trips,
●● Social control of members research products, find health information, read the
●● Production, consumption, distribution of goods and news, seek out specials, and get coupons or participate in
services group savings. Consumers freely share the information
they find with everyone in their personal networks.
●● Affective nurturance—love”12
Despite a great deal of media coverage on the chan-
ging role of the family, it isn’t so much the role of the
family that has changed but the makeup of the family.
2-6 Demographic Factors
Canadian families have an unprecedented level of Another variable in the external environment and
diversity. Some men and women are raising children on one extremely important to marketing managers is
their own without a partner; others are living together demography—the study of people’s vital statistics,
such as their age, race and ethnicity, and location.
Demographics are significant because they are strongly
related to consumer behaviour in the marketplace.
We turn our attention now to a closer look at age
groups, their impact, and the opportunities they present
for marketers. Why does tailoring the merchandise to
particular age groups matter? One reason is that each
generation enters a life stage with its own tastes and
biases, and tailoring products to what customers value is
key to sales. The cohorts have been named Generation
Z, Generation Y/Millennials, Generation X, and baby
boomers. You will find that each cohort group has its own
needs, values, and consumption patterns.
2-6a Generation Z
Annette Shaff/Shutterstock.com
Members of Generation demography the study of

people’s vital statistics, such as their
Z, increasingly referred age, race and ethnicity, and location
to as snowflakes (because
they have been called Generation Z people born
between 1995 and 2009
“special and unique” by
their parents), are preadolescents and early adoles- accounting for over 27 percent of the country’s popula-
cents born between 1995 and 2009. With attitudes, tion. But while Gen Yers are smaller in population than
access to information, brand consciousness, technical the baby boomer segment, Environics predicts the Yers
sophistication well beyond their years, and purchasing will soon overtake baby boomers because boomers will
power to match, these young consumers increasingly be decreasing due to mortality.18 Gen-Yers range from
represent an attractive segment for marketers of all new career entrants to those in their late 30s. Those
kinds of products. starting their careers are already making major pur-
The number of Gen Zs (also called tweens) who own chases, such as cars and homes, and have a heightened
cellphones has increased significantly over the years, sense of social responsibility. A survey conducted by
with cellphone ownership among Grade 4 students at Leger Marketing found a growing attitude among
25 percent and 50 percent for those in Grade 7.15 This young Canadians of expecting their employer to be
age group represents the fastest-growing segment in the aware of their impact on the environment, and one-
cellphone market.16 Add to this the dollar amounts that third reported they would quit their job over the envir-
parents will spend on their tweens, and one grasps the onmental policies of their company.19 Gen-Yers have
importance and potential of this market. Gen Zs over- been referred to as “trophy kids” as a result of their
whelmingly (92 percent) recognize television commer- high expectations in the workforce and their increased
cials for what they are—just advertising—and indicate sense of entitlement, which leads to a desire for a
that they tune out ads simply because they are boring. better work–life balance. Most Gen-Yers are the chil-
Despite tweens’ tech-savvy attitude, major social net- dren of baby boomers and so are sometimes referred
work sites, such as Facebook, are off limits to tweens to as echo boomers. Because of economic necessity,
under age 13 because of privacy and safety concerns. many baby boomers in Canada are working well into
However, a national survey found that one-third of their retirement age, thus shrinking the employment
under-aged students surveyed in 2014 claimed they had opportunities for Gen-Yers. As a result, Gen-Yers are
a Facebook account anyway.17 facing unstable employment opportunities and strug-
The older Gen-Zers, those born between 1995 and gling to establish themselves professionally. Those
2000, represent just over 2.1 million people in Canada. who have launched their careers often find themselves
As a group, they are extremely important to marketers working side by side with baby boomers. The work-
because they wield significant purchasing power and place dynamics of this demographic integration have
are key influencers in family purchases. Teenagers are not created widespread issues, according to an IBM
avid shoppers, spending on fashion, makeup, food, and Institute for Business Value study, which concluded
entertainment. They are computer savvy, heavy users both cohorts had similar values and goals, thus minim-
of social media, and active digital music and movie izing negative effects.20
downloaders.
2-6b Generation Y
Those designated by demographics as Generation Y
were born between 1979 and 2000. They began hit-
ting their purchasing power around the turn of the
millennium—hence the increasingly familiar cohort
Minerva Studio/iStock/Thinkstock
term of Millennials. Though Gen-Yers represent a

smaller group than the baby boomers, whose birthd-
ates span nearly 20 years, they are plentiful enough to
put their own footprints on society. You will also note
that inconsistencies within the study of demography
often result in age overlap, as we note here, where
the last four years of Gen Y overlap with the first four Demographic patterns and economic
years of Gen Z. realities make it still commonplace to
Environics, a national find baby boomers and Gen Yers doing
research firm, estimates essentially the same job in the same
Generation Y people born there are over 9 million
between 1979 and 2000 company.
Gen-Yers in Canada,
Another random document with
no related content on Scribd:
which all these impressions are made, and from which reactions
come. Suppose there is something outside. I see the blackboard.
How does the knowledge come? The blackboard itself is unknown, I
can never know it. It is what the German philosophers call the “thing
in itself.” That blackboard, that “X,” is acting on my mind, and the
chitta reacts. The chitta is like a lake; throw a stone upon it, and as
soon as the stone strikes it a reactionary wave comes towards the
stone. This wave is what you really know. And this wave is not like
the stone at all, it is a wave. So that blackboard, “X,” is the stone
which strikes the mind and the mind throws up a wave towards that
object which strikes it, and this wave which is thrown towards it is
what we call the blackboard. I see you. You as reality are unknown
and unknowable. You are “X” and you act upon my mind, and the
mind throws a wave towards the point from which the action came,
and that wave is what I call Mr. or Mrs. So-and-So.
There are two elements in this, one from inside and the other from
outside, and the combination of these two, “X” plus mind, is our
external universe. All knowledge is by reaction. In the case of a
whale it has been determined by calculation how long after its tail is
struck, its mind reacts upon the tail and the tail feels the pain. Take
the case of the pearl oyster, in which the pearl is formed by the
oyster throwing its own juice around the grain of sand that enters the
shell and irritates him. There are two things which cause the pearl.
First the oyster’s own juice, and second the blow from outside. So
this table is “X” plus my mind. The very attempt to know it will be
made by the mind; therefore the mind will give some of its own
substance to enable it to understand, and when we understand it, it
has become a compound thing,—“X” plus the mind. Similarly in
internal perception; when we want to know ourselves. The real Self,
which is within us, is also unknown and unknowable. Let us call it
“Y.” When I want to know myself as Mr. So-and-So it is “Y” plus the
mind. That “Y” strikes a blow on the mind, and when I want to know
myself I must throw a blow upon the mind also. So our whole world
is “X” plus mind (the external world), and “Y” plus mind (the internal
world). We shall see later how this Advaitist idea can be
demonstrated mathematically.
“X” and “Y” are simply the algebraic unknown quantities. We have
seen that all knowledge is a combination, and this world, the
universe, is a combination, and intelligence is similarly a
combination. If it is internal intelligence it is “Y” plus the mind, if an
external object, it is “X” plus the mind. Knowledge is a combination of
“Y” plus the mind and matter is a combination of “X” plus the mind.
We first take the internal group. Intelligence which we see in Nature
cannot be wholly in Nature, because intelligence itself is a compound
of “Y” plus the mind. “Y” comes from the Self. So the intelligence that
we know is a compound of the power of the light of the soul plus
nature. Similarly, the existence which we know must be a compound
of “X” plus the mind. We find therefore that in these three factors, I
exist, I know and I am blessed, the idea that I have no want, which
comes from time to time, is the central idea, the grand basic idea of
our life, and when it becomes limited, and becomes a compound, we
think it happiness and misery. These factors manifest as existence
phenomenal, knowledge phenomenal, and love phenomenal. Every
man exists, and every man must know, and every man is made for
bliss. He cannot help it. So through all existence; animals and plants,
from the lowest to the highest existence, all must love. You may not
call it love; but they must all exist, must all know and must all love.
So this existence which we know is a compound of “X” and the mind,
and knowledge also is a compound of that “Y” inside plus mind, and
that love also is a compound of that “Y” and mind. Therefore these
three factors which come from inside and are combining themselves
with the external things to manufacture phenomenal existence,
knowledge and love, are called by the Vedantists “Existence
Absolute, Knowledge Absolute, Bliss Absolute.”
That Absolute Existence which is limitless, which is unmixed,
uncombined, which knows no change, is the free soul, and that Real
Existence, when it gets mixed up, muddled up, as it were, with the
elements of Nature is what we call human existence. It is limited and
manifests as plant life, animal life, human life, just as infinite space is
apparently limited by the walls of this room, or by any other
enclosure. That Knowledge Absolute means not the knowledge we
know, not intelligence, not reason, not instinct, but that which when it
becomes manifested we call by these names. When that Knowledge
Absolute becomes limited we call it intuition, and when it becomes
still more limited we call it reason, instinct, etc. That Knowledge
Absolute is Vijnâna. The nearest translation of it is “all-knowingness.”
There is no combination in it. It is the nature of the soul. That Bliss
Absolute when it becomes limited we call love, attraction for the
gross body, or the fine bodies, or for ideas. These are but distorted
manifestations of this blessedness which is not a quality of the soul,
but the essence, the inherent nature of the soul. Absolute Existence,
Absolute Knowledge, and Absolute Blessedness are not qualities of
the soul, but its essence; there is no difference between them and
the soul. And the three are one; we see the one thing in three
different lights. They are beyond all knowledge and by their reflection
Nature appears to be intelligent.
It is that eternal Knowledge Absolute of the Self percolating through
the mind of man that becomes our reason and intelligence. It varies
according to the medium through which it is shining. There is no
difference as soul between me and the lowest animal, only his brain
is a poorer medium through which the knowledge shines, and we call
it instinct. In man the brain is much finer, so the manifestation is
much clearer, and in the highest man it has become entirely clear,
like a piece of glass. So with existence; this existence which we
know, this limited bit of existence is simply a reflection of that
Existence Absolute which is the nature of the soul. So with bliss; that
which we call love or attraction is but the reflection of the eternal
blessedness of the Self, because with these manifestations come
limitations, but the unmanifested, the natural, essential existence of
the soul is unlimited, to that blessedness there can be no limit. But in
human love there are limitations. I may love you one day, I may
cease to love you the next. My love increases one day, decreases
the next, because it is only a limited manifestation. The first thing
therefore that we find against Kapila is that he conceives the soul to
be a mere qualitiless, colorless, inactive something. Vedânta teaches
that it is the essence of all Existence, Knowledge, and Bliss; infinitely
higher than all knowledge that we know, infinitely more blessed than
any human love that we can think of, infinitely existing. The soul
never dies. Death and birth are simply unthinkable in connection with
the Self, because it is Existence Absolute.
The second point where we will contend with Kapila is with regard to
his idea of God. Just as this series of limited manifestations of
Nature, beginning with the individual intellect and ending with the
individual body, requires the Self behind as the ruler and governor on
the throne, so in the Cosmos, we must enquire what the universal
Intelligence, the universal Mind, the universal fine and gross
materials have as their ruler and governor? How will that series
become complete without one universal Self behind it as its ruler and
governor? If we deny that there is a universal governor, we must
deny there is a soul behind the lesser series, because the whole
universe is a repetition of the same plan. When we know one lump of
clay we know the nature of all clay. If we can analyze one human
being, we shall have analyzed the whole universe, because it is all
built on the same plan. Therefore if it be true that behind this
individual series there stands one who is beyond all nature, who is
not composed of materials, the purusha, the very same logic will
apply to this universe, and this universe too will require such a Soul.
The Universal Soul which is behind the modifications of Nature is
called by Vedânta Isvara, the Supreme Ruler, God.
Now comes the more difficult point to fight. There can be but one
Soul. To begin with, we can give the Sânkhyas a good blow by taking
up their theories and proving that each soul must be omnipresent,
because it is not composed of anything. Everything that is limited
must be limited by something else. Here is the existence of the table.
Its existence is circumscribed by many things, and we find that every
limitation presupposes some limiting thing. If we think of space, we
have to think of it as a little circle, but beyond that is more space. We
cannot imagine a limited space in any other way. It can only be
understood and perceived through the infinite. To perceive the finite,
in every case we must apprehend the infinite; both stand or fall
together. When you think of time, you have also to think of time
beyond any particular period of time. The latter is limited time and
the larger is unlimited time. Wherever you endeavor to perceive the
finite, you will find it impossible to separate it from the infinite. If this
be the case, we shall prove thereby that this Self must be infinite,
omnipresent. Then comes a fine question. Can the omnipresent, the
infinite be two? Suppose there are two infinites, one will limit the
other. Suppose there are two infinites,—A and B; the infinite “A”
limits the infinite “B,” because the infinite “B” you can say is not the
infinite “A,” and the infinite “A” it can be said is not the infinite “B.”
Therefore there can be but one infinite. Secondly, the infinite cannot
be divided. Infinity divided into any number of parts must still be
infinity, for it cannot be separated from itself. Suppose there is an
infinite ocean of water, could you take up one drop from there? If you
could, that ocean would no longer be infinite, that drop would limit it.
The infinite cannot be divided by any means.
But there are stronger proofs that the Self is One. Not only so, but
that the whole universe is one. We will once more take up our “X”
and “Y”. We have shown how what we call the external world is “X”
plus mind, and the internal world “Y” plus mind. “X” and “Y” are both
unknown quantities, unknown and unknowable. What is the mind?
The mind is the “time, space and causation.” This idea is the nature
of the mind. You can never think without time, you can never
conceive of anything without space, and you can never imagine
anything without causation. These three are the forms in which both
“X” and “Y” are caught, and which become the mind. Beyond that
there is nothing to the mind. Take off these three forms which of
themselves do not exist,—what remains? It is all one; “X” and “Y” are
one. It is only this mind, this form, that has limited them apparently,
and made them differ as internal and external world. “X” and “Y” are
both unknown and unknowable. We cannot attribute any quality to
them. As such they are both the same. That which is qualitiless and
attributeless and absolute must be one. There cannot be two
absolutes. When there are no qualities there can be only One. “X”
and “Y” are both without qualities because they take qualities only in
the mind, therefore this “X” and “Y” are one.
The whole universe is One. There is only One Self in the universe,
only One Existence, and that One Existence, when it is passing
through the forms of time, space and causation, is called buddhi, fine
matter, gross matter, etc. All physical and mental forms, everything in
the universe is that One, appearing in various ways. When a little bit
of it gets into this network of time, space and causation, it apparently
takes forms; remove the network and it is all One. This whole
universe is all one, and is called in the Advaitist philosophy
Brahman. Brahman appearing behind the universe is called God;
appearing behind the little universe—the microcosm, is the soul. This
very “Self” or Âtman therefore is God in man. There is only one
Purusha, and He is called God, and when God and man are
analyzed they are one. The universe is you yourself, the unbroken
you; you are throughout this universe. “In all hands you work,
through all mouths you eat, through all nostrils you breathe, through
all minds you think.” The whole universe is you; this universe is your
body; you are the universe, both formed and unformed. You are the
soul of the universe, its body also. You are God, you are the angels,
you are man, you are the animals, you are the plants, you are the
minerals, you are everything; all manifestation is you. Whatever
exists is you—the real “You”—the one undivided Self—not the little,
limited personality that you have been regarding as yourself.
The question now arises,—how have you, that Infinite Being, broken
into parts, become Mr. So-and-So, and the animals and so on? The
answer is that all this division is only apparent. We know that the
infinite cannot be divided, therefore this idea that you are a part has
no reality, and never will have: and this idea that you are Mr. So-and-
So was never true at any time; it is but a dream. Know this and be
free. That is the Advaitist conclusion. “I am neither the mind, nor the
body, nor am I the organs; I am Existence-Knowledge-Bliss
Absolute; I am He, I am He,” This is knowledge, and everything
besides this is ignorance. Everything that is, is but ignorance, the
result of ignorance. Where is knowledge for me, for I am knowledge
itself! Where is life for me, for I am life itself! Life is a secondary
manifestation of my nature. I am sure I live, for I am life, the one
Being, and nothing exists except through me, and in me, and as me.
I am manifested through elements, but I am the one free. Who seeks
freedom? Nobody seeks freedom. If you think that you are bound,
you remain bound; you make your own bondage. If you realize that
you are free, you are free this moment. This is knowledge,
knowledge of freedom. Freedom is the goal of all Nature.
IV
THE FREE SOUL
We have seen that the analysis of the Sânkhyas stops with the
duality of existence, Nature and souls. There are an infinite number
of souls, which, being simple, cannot die, and must therefore be
separate from Nature. Nature in itself changes and manifests all
these phenomena, and the soul, according to the Sânkhyas is
inactive. It is a simple by itself, and Nature works out all these
phenomena for the liberation of the soul, and liberation consists in
the soul discriminating that it is not Nature. At the same time we
have seen that the Sânkhyas were bound to admit that every soul
was omnipresent. Being a simple the soul cannot be limited,
because all limitation comes either through time, space, or
causation. The soul being entirely beyond these cannot have any
limitation. To have limitation one must be in space, which means the
body, and that which is body must be in Nature. If the soul had form,
it would be identified with Nature; therefore the soul is formless, and
that which is formless cannot be said to exist here, there, or
anywhere. It must be omnipresent. Beyond this the Sânkhya
philosophy does not go.
The first argument of the Vedantists against this is that this analysis
is not a perfect one. If this Nature be a simple, and the soul is also a
simple, there will be two simples, and all the arguments that apply in
the case of the soul to show that it is omnipresent, will apply in the
case of Nature, and Nature too will be beyond all time, space, and
causation, and as the result there will be no change or manifestation.
Then will come the difficulty of having two simples, or two absolutes,
which is impossible. What is the solution of the Vedantist? His
solution is that, just as the Sânkhyas say, it requires some sentient
being as the motive power behind, which makes the mind think and
Nature work, because Nature in all its modifications, from gross
matter up to Mahat (Intelligence) is simply insentient. Now, says the
Vedantist, this sentient being which is behind the whole universe is
what we call God, and consequently this universe is not different
from Him. It is He Himself who has become this universe. He not
only is the instrumental cause of this universe, but also the material
cause. Cause is never different from effect, the effect is but the
cause reproduced in another form. We see that every day. So this
Being is the cause of Nature. All the forms and phases of Vedânta,
either dualistic, or qualified-monistic, or monistic, first take this
position,—that God is not only the instrumental but also the efficient
cause of this universe, that everything which exists is He. The
second step in Vedânta is that these souls are also a part of God,
one spark of that Infinite Fire. “As from a mass of fire millions of
small particles fly, even so from this Ancient One have come all
these souls.” So far so good, but it does not yet satisfy. What is
meant by a part of the Infinite? The Infinite is indivisible; there cannot
be parts of the Infinite. The Absolute cannot be divided. What is
meant therefore that all these sparks are from Him? The Advaitist,
the non-dualistic Vedantist, solves the problem by maintaining that
there is really no part; that each soul is really not a part of the
Infinite, but actually is the Infinite Brahman. Then how can there be
so many? The sun reflected from millions of globules of water
appears to be millions of suns, and in each globule is a miniature
picture of the sun-form; so all these souls are but reflections and not
real. They are not the real “I” which is the God of this universe, the
one undivided Being of the universe. And all these little different
beings, men and animals, etc., are but reflections, and not real. They
are simply illusory reflections upon Nature. There is but one Infinite
Being in the universe, and that Being appears as you and as I, but
this appearance of division is after all delusion. He has not been
divided, but only appears to be divided. This apparent division is
caused by looking at Him through the network of time, space, and
causation. When I look at God through the network of time, space,
and causation, I see Him as the material world. When I look at Him
from a little higher plane, yet through the same network, I see Him as
an animal, a little higher as a man, a little higher as a god, but yet He
is the One Infinite Being of the universe, and that Being we are. I am
That, and you are That. Not parts of It, but the whole of It. “It is the
Eternal Knower standing behind the whole phenomena; He Himself
is the phenomena.” He is both the subject and the object, He is the
“I” and the “You.” How is this? “How to know the knower?” The
Knower cannot know himself. I see everything but cannot see
myself. The Self, the Knower, the Lord of all, the Real Being, is the
cause of all the vision that is in the universe, but it is impossible for
Him to see Himself or know Himself, excepting through reflection.
You cannot see your own face excepting in a mirror, and so the Self
cannot see its own nature until it is reflected, and this whole universe
therefore is the Self trying to realize Itself. This reflection is thrown
back first from the protoplasm, then from plants and animals, and so
on and on from better and better reflectors, until the best reflector,—
the perfect man,—is reached. Just as a man who, wanting to see his
face, looks first in a little pool of muddy water, and sees just an
outline. Then he comes to clearer water, and sees a better image,
then to a piece of shining metal, and sees a still better image, and at
last to a looking-glass, and sees himself reflected as he is. Therefore
the perfect man is the highest reflection of that Being, who is both
subject and object. You now find why man instinctively worships
everything, and how perfect men are instinctively worshipped as God
in every country. You may talk as you like, but it is they who are
bound to be worshipped. That is why men worship Incarnations,
such as Christ or Buddha. They are the most perfect manifestations
of the eternal Self. They are much higher than all the conceptions of
God that you or I can make. A perfect man is much higher than such
conceptions. In him the circle becomes complete; the subject and
the object become one. In him all delusions go away and in their
place comes the realization that he has always been that perfect
Being. How came this bondage then? How was it possible for this
perfect Being to degenerate into the imperfect? How was it possible
that the free became bound? The Advaitist says he was never
bound, but was always free. Various clouds of various colors come
before the sky. They remain there a minute and then pass away. It is
the same eternal blue sky stretching there forever. The sky never
changes; it is the cloud that is changing. So you are always perfect,
eternally perfect. Nothing ever changes your nature, or ever will. All
these ideas that I am imperfect, I am a man, or a woman, or a sinner,
or I am the mind, I have thought, I will think, all are hallucinations;
you never think, you never had a body; you never were imperfect.
You are the blessed Lord of this universe, the one Almighty ruler of
everything that is and ever will be, the one mighty ruler of these suns
and stars and moons and earths and plants, and all the little bits of
our universe. It is through you the sun shines, and the stars shed
their lustre, and the earth becomes beautiful. It is through your
blessedness that they all love and are attracted to each other. You
are in all, and you are all. Whom to avoid, and whom to take? You
are the all in all. When this knowledge comes delusion immediately
vanishes.
I was once travelling in the desert in India. I travelled for over a
month and always found the most beautiful landscapes before me,
beautiful lakes and all that. One day I was very thirsty and I wanted
to have a drink at one of these lakes, but when I approached that
lake it vanished. Immediately with a blow came into my brain the
idea that this was a mirage about which I had read all my life, and
then I remembered and smiled at my folly, that for the last month all
the beautiful landscapes and lakes I had been seeing were this
mirage, but I could not distinguish them then. The next morning I
again began my march; there was the lake and the landscape, but
with it immediately came the idea, “This is a mirage.” Once known it
had lost its powers of illusion. So this illusion of the universe will
break one day. The whole of this will vanish, melt away. This is
realization. Philosophy is no joke or talk. It will be realized; this body
will vanish, this earth and everything will vanish, this idea that I am
the body, or the mind, will for some time vanish, or if the Karma is
ended it will disappear never to come back; but if one part of the
Karma remains,—as a potter’s wheel after the potter has finished the
pot, will sometimes go on from the past momentum—so this body,
when this delusion has vanished altogether, will go on for some time.
Again this world will come, men and women and animals will come,
just as the mirage came the next day, but not with the same force,
along with it will come the idea that I know its nature now, and it will
cause no bondage, no more pain, nor grief, nor misery. Whenever
anything miserable will come, the mind will be able to say, “I know
you as hallucination.” When a man has reached that state he is
called jivan mukta, “living free,” free even while living. The aim and
end in this life for the Jnâna Yogi is to become this jivan mukta, living
freedom. He is jivan mukta who can live in this world without being
attached. He is like the lotus leaves in water, which are never wet by
the water. He is the highest of human beings, nay, the highest of all
beings, for he has realized his identity with the Absolute, he has
realized that he is one with God. So long as you think you have the
least difference from God, fear will seize you, but when you have
known that you are He, that there is no difference, entirely no
difference, that you are He, all of Him, and the whole of Him, all fear
ceases. “There who sees whom? Who worships whom? Who talks to
whom? Who hears whom? Where one sees another, where one
talks to another, where one hears another, it is in law. Where none
sees none, where none speaks to none that is the highest, that is the
great, that is the Brahman.” Being That, you are always That. What
will become of the world then? What good shall we do to the world?
Such questions do not arise. “What becomes of my gingerbread if I
become old?” says the baby. “What becomes of my marbles if I
grow, so I will not grow,” says the boy. “What will become of my dolls
if I grow old?” says the little child. It is the same question in
connection with this world; it has no existence in the past, present, or
future. If we have known the Âtman as It is, if we have known that
there is nothing else but this Âtman, that everything else is but a
dream, with no existence in reality, then this world with its poverties,
its miseries, its wickedness and its goodness will cease to disturb us.
If they do not exist, for whom and for what shall we take trouble?
This is what the Jnâna Yogis teach. Therefore, dare to be free, dare
to go as far as your thought leads, and dare to carry that out in your
life. It is very hard to come to jnânam. It is for the bravest and most
daring, who dare to smash all idols, not only intellectual, but in the
senses. This body is not I; it must go. All sorts of curious things may
come out of this. A man stands up and says I am not the body,
therefore my headache must be cured, but where is the headache if
not in his body? Let a thousand headaches and a thousand bodies
come and go. What is that to me? “I have neither birth nor death;
father nor mother I never had; friends and foes I have none, because
they are all I; I am my own friend and I am my own enemy; I am
Existence-Knowledge-Bliss Absolute; I am He, I am He.” If in a
thousand bodies I am suffering from fever and other ills, in millions of
bodies I am healthy. If in a thousand bodies I am starving, in other
thousand bodies I am feasting. If in thousands of bodies I am
suffering misery, in thousands of bodies I am happy. Who shall
blame whom, who praise whom? Whom to seek, whom to avoid? I
seek none, nor avoid any, for I am all the universe, I praise myself, I
blame myself, I suffer for myself, I am happy at my own will, I am
free. This is the Jnâni, brave and daring. Let the whole universe
tumble down; he smiles and says it never existed. It was all an
hallucination; we see the universe tumble down; where was it?
Where has it gone?
Before going into the practical part, we will take up one more
intellectual question. So far the logic is tremendously rigorous. If man
reasons, there is no place for him to stand until he comes to this, that
there is but One Existence, that everything else is nothing. There is
no other way left for rational mankind but to take this view. But how
is it that what is infinite, ever perfect, ever blessed, Existence-
Knowledge-Bliss Absolute has come under these delusions? It is the
same question that has been asked all the world over. In the vulgar
form the question becomes “How did sin come into this world?” This
is the most vulgar and sensuous form of the question, and the other
is the more philosophic form, but the answer is the same. The same
question has been asked in various grades and fashions, but in its
lower forms it finds no solution, because the stories of apples and
serpents and women do not give the explanation. In that state, the
question is childish and so is the answer. But the question has
assumed very high proportions now. “How this illusion came?” And
the answer is as fine. The answer is that we cannot expect any
answer to an impossible question. The very question is impossible in
terms. You have no right to ask that question. Why? What is
perfection? That which is beyond time, space and causation. That is
perfect. Then you ask how the perfect became imperfect. In logical
language the question may be put in this form—“How did that which
is beyond causation become caused?” You contradict yourself. You
first admit it is beyond causation, and then ask what causes it. This
question can only be asked within the limits of causation. As far as
time and space and causation extend, so far can this question be
asked. But beyond that it will be nonsense to ask it, because the
question is illogical. Within time, space and causation it can never be
answered, and what answer may lie beyond these limits can only be
known when we have transcended them, therefore the wise will let
this question rest. When a man is ill, he devotes himself to curing his
disease, without insisting that he must first learn how he came to
have it.
There is another form of this question, a little lower, but more
practical and illustrative. What produced this delusion? Can any
reality produce delusion? Certainly not. We see that one delusion
produces another, and so on. It is delusion always that produces
delusion. It is disease that produces disease, and not health that
produces disease. The wave is the same thing as the water, the
effect is the cause in another form. The effect is delusion, and
therefore the cause must be delusion. What produced this delusion?
Another delusion. And so on without beginning. The only question
that remains for you to ask is, does not this break your monism,
because you get two existences in the universe, one yourself, and
the other the delusion? The answer is,—delusion cannot be called
an existence. Thousands of dreams come into your life, but do not
form any part of your life. Dreams come and go; they have no
existence; to call delusion existence will be sophistry. Therefore
there is only one individual existence in the universe, ever free, and
ever blessed, and that is what you are. This is the last conclusion
reached by the Advaitists. It may then be asked, what becomes of all
these various forms of worship? They will remain; they are simply
groping in the dark for light, and through this groping light will come.
We have just seen that the Self cannot see Itself. Our knowledge is
within the network of Mâyâ (unreality), and beyond that is freedom;
within the network there is slavery, it is all under law. Beyond that
there is no law. So far as the universe is concerned, existence is
ruled by law, and beyond that is freedom. As long as you are in the
network of time, space and causation, to say you are free is
nonsense, because in that network all is under rigorous law,
sequence and consequence. Every thought that you think is caused,
every feeling has been caused; to say that the will is free is sheer
nonsense. It is only when the infinite existence comes, as it were,
into this network of Mâyâ that it takes the form of will. Will is a portion
of that being caught in the network of Mâyâ, and therefore “free-will”
is a misnomer. It means nothing,—sheer nonsense. So is all this talk
about freedom. There is no freedom in Mâyâ.
Every one is as much bound in thought, word, deed, and mind, as a
piece of stone or this table. That I talk to you now is as rigorously in
causation as that you listen to me. There is no freedom until you go
beyond Mâyâ. That is the real freedom of the soul. Men, however
sharp and intellectual, however clearly they see the force of the logic
that nothing here can be free, are all compelled to think they are
free; they cannot help. No work can go on until we begin to say we
are free. It means that the freedom we talk about is the glimpse of
the blue sky through the clouds, and that the real freedom—the blue
sky itself,—is behind. True freedom cannot exist in the midst of this
delusion, this hallucination, this nonsense of the world, this universe
of the senses, body and mind. All these dreams, without beginning
or end, uncontrolled and uncontrollable, ill-adjusted, broken,
inharmonious, form our idea of this universe. In a dream, when you
see a giant with twenty heads chasing you, and you are flying from
him, you do not think it is inharmonious; you think it is proper and
right. So is this law. All that you call law is simply chance without
meaning. In this dream state you call it law. Within Mâyâ, so far as
this law of time, space and causation exists, there is no freedom,
and all these various forms of worship are within this Mâyâ. The idea
of God and the ideas of brute and of man are within this Mâyâ, and
as such equally hallucinations; all of them are dreams. But you must
take care not to argue like some extraordinary men of whom we hear
at the present time. They say the idea of God is a delusion, but the
idea of this world is true. Both ideas stand or fall by the same logic.
He alone has the right to be an atheist who denies this world, as well
as the other. The same argument is for both. The same mass of
delusion extends from God to the lowest animal, from a blade of
grass to the Creator. They stand or fall by the same logic. The same
person who sees falsity in the idea of God ought also to see it in the
idea of his own body, or his own mind. When God vanishes, then
also vanish the body and mind, and when both vanish, that which is
the Real Existence remains forever. “There the eyes cannot go, nor
the speech, nor the mind. We cannot see it, neither know it.” And we
now understand that so far as speech and thought and knowledge,
and intellect go, it is all within this Mâyâ, within bondage. Beyond
that is Reality. There neither thought, nor mind, nor speech, can
reach.
So far it is intellectually all right, but then comes the practice. The
real work in these classes is the practice. Are any practices
necessary to realize this one-ness? Most decidedly. It is not that you
become this Brahman. You are already that. It is not that you are
going to become God or perfect; you are already perfect, and
whenever you think you are not, it is a delusion. This delusion which
says that you are Mr. So-and-So, or Mrs. So-and-So, can be got rid
of by another delusion, and that is practice. Fire will eat fire, and you
can use one delusion to conquer another delusion. One cloud will
come and brush away another cloud, and then both will go away.
What are these practices then? We must always bear in mind that
we are not going to be free, but are free already. Every idea that we
are bound is a delusion. Every idea that we are happy or unhappy, is
a tremendous delusion; and another delusion will come,—that we
have got to work and worship and struggle to be free,—and this will
chase out the first delusion, and then both will stop.
The fox is considered very unholy by the Mohammedans, also by the
Hindus. Also, if a dog touches any bit of food it has to be thrown out,
it cannot be eaten by any man. In a certain Mohammedan house a
fox entered and took a little bit of food from the table, ate it up and
fled. The man was a poor man, and had prepared a very nice feast
for himself, and that feast was made unholy, and he could not eat it.
So he went to a Mulla, a priest, and said: “This has happened to me;
a fox came and took a mouthful out of my meal; what can be done? I
had prepared a feast and wanted so much to eat it, and now comes
this fox and destroys the whole affair.” The Mulla thought for a
minute, and then found only one solution and said: “The only way is
for you to get a dog, and make him eat a bit out of the same plate,
because dog and fox are eternally quarrelling. The food that was left
by the fox will go into your stomach, and that not eaten by the dog
will go there, and both will be purified.” We are very much in the
same Predicament. This is an hallucination that we are imperfect,
and we take up another, that we have to practice to become perfect.
Then one will chase the other, as we can use one thorn to extract
another and then throw both away. There are people for whom it is
sufficient knowledge to hear, “Thou art That.” With a flash this
universe goes away and the real nature shines, but others have to
struggle hard to get rid of this idea of bondage.
The first question is, who are fit to become Jnâna Yogis? Those who
are equipped with these requisites. First, renunciation of all fruits of
work and of all enjoyments in this life or another life. If you are the
creator of this universe whatever you desire you will have, because
you will create it for yourself. It is only a question of time. Some get it
immediately; with others the past samskâras (impressions) stand in
the way of getting their desires. We give the first place to desires for
enjoyment, either in this or another life. Deny there is any life at all,
because life is only another name for death. Deny that you are a
living being. Who cares for life? Life is one of these hallucinations
and death is its counterpart. Joy is one part of these hallucinations,
and misery the other part, and so on. What have you to do with life
or death? These are all creations of the mind. This is called giving up
desires of enjoyment either in this life or another.
Then comes controlling the mind, calming it so that it will not break
into waves and have all sorts of desires; holding the mind steady, not
allowing it to get into waves from external or internal causes,
controlling the mind perfectly just by the power of will. The Jnâna
Yogi does not take any one of these physical helps, or mental helps,
simply philosophic reasoning, knowledge and his own will, these are
the instrumentality he believes in. Next comes Titikshâ, forbearance,
bearing all miseries without murmuring, without complaining. When
an injury comes, do not mind it. If a tiger comes, stand there. Who
flies? There are men who practice titikshâ, and succeed in it. There
are men who sleep on the banks of the Ganges in the mid-summer
sun of India, and in winter float in the waters of the Ganges for a
whole day; they do not care. Men sit in the snow of the Himâlayas,
and do not care to wear any garment. What is heat? What is cold?
Let things come and go, what is that to me, I am not the body. It is
hard to believe this in these Western countries, but it is better to
know that it is done. Just as your people are brave to jump at the
mouth of a cannon, or into the midst of the battle-field, so our people
are brave to think and act out their philosophy. They give up their
lives for it. “I am Existence-Knowledge-Bliss Absolute; I am He; I am
He.” Just as the Western ideal is to keep up luxury in practical life, so
ours is to keep up the highest form of spirituality, to demonstrate that
religion is not merely frothy words, but can be carried out, every bit
of it, in this life. This is titikshâ, to bear everything, not to complain of
anything. I myself have seen men who say “I am the soul; what is the
universe to me? Neither pleasure, nor pain, nor virtue, nor vice, nor
heat, nor cold are anything to me.” That is titikshâ; not running after
the enjoyments of the body. What is religion? To pray: “give me this
and that”? Foolish ideas of religion! Those who believe them have no
true idea of God and soul. My Master used to say the vulture rises
high and high until he becomes a speck, but his eye is always in the
piece of rotten carrion on the earth. After all, what is the result of
your ideas of religion? To cleanse the streets, and have more bread
and clothes. Who cares for bread and clothes? Millions come and go
every minute. Who cares? Why care for the joys and vicissitudes of
this little world? Go beyond that if you dare; go beyond law, let the
whole universe vanish, and stand alone. “I am Existence-Absolute,
Knowledge-Absolute, Bliss-Absolute; I am He; I am He.”
V
ONE EXISTENCE APPEARING AS MANY
We have seen how Vairâgyam, or renunciation, is the turning point in
all these various Yogas. The Karmi (worker) renounces the fruits of
his work. The Bhakta (devotee) renounces all little loves for the
almighty and omnipresent love. The Yogi renounces his experiences,
because his philosophy is that the whole Nature, although it is for the
experience of the soul, at last brings him to know that he is not in
Nature, but eternally separate from Nature. The Jnâni (philosopher)
renounces everything, because his philosophy is that Nature never
existed, neither in the past, present nor future. We have also seen
how the question of utility cannot be asked in these higher themes; it
is very absurd to ask utility, and even if it be asked, after a proper
analysis what do we find in this question of utility? The ideal of
happiness, that which brings man greater happiness is of greater
utility to him than those things which do not improve his material
conditions or bring him such great happiness. All the sciences are for
this one end, to bring happiness to humanity and that which brings
the larger amount of happiness, mankind takes and gives up that
which brings a lesser amount of happiness. We have seen how
happiness is either in the body, or in the mind, or in the Âtman. With
animals, and in the lowest of human beings, who are very much like
animals, happiness is all in the body. No man can eat with the same
pleasure as a famished dog, or a wolf; so, in the dog and the wolf the
happiness is gone entirely into the body. In men we find a higher
plane of happiness, that of thought, and in the Jnâni there is the
highest plane of happiness in the Self, the Âtman. So to the
philosopher this knowledge of the Self is of the highest utility,
because it gives him the highest happiness possible. Sense
gratifications or physical things cannot be of the highest utility to him
because he does not find in them the same pleasure that he finds in
knowledge itself; and after that, knowledge is the one goal, and is
really the highest happiness that we know. All who work in ignorance
are, as it were, the draught animals of the devas. The word deva is
here used in the sense of a wise man. All the people that work, and
toil, and labor like machines do not really enjoy life, but it is the wise
man who enjoys. A rich man buys a picture at a cost of a hundred
thousand dollars perhaps, but it is the man who understands art that
enjoys it; and if a man is without knowledge of art it is useless to him,
he is only the owner. All over the world, it is the wise man who
enjoys the happiness of the world. The ignorant man never enjoys;
he has to work for others unconsciously.
Thus far we have seen the theories of these Advaitist philosophers,
how there is but one Âtman; there cannot be two. We have seen
how in the whole of this universe there is but One Existence, and
that One Existence when seen through the senses is called the
world, the world of matter. When It is seen through the mind It is
called the world of thoughts and ideas, and when It is seen as it is,
then It is the One Infinite Being. You must bear this in mind; it is not
that there is a soul in man, although I had to take that for granted in
order to explain it at first, but that there is only One Existence, and
that one the Âtman, the Self, and when this is perceived through the
senses, through sense imageries, It is called the body. When It is
perceived through thought, It is called the mind. When It is perceived
in Its own nature, It is the Âtman, the One Only Existence. So, it is
not that there are three things in one, the body and the mind and the
Self, although that was a convenient way of putting it in the course of
explanation; but all is that Âtman, and that one Being is sometimes
called the body, sometimes the mind, and sometimes the Self,
according to different vision. There is but one Being which the
ignorant call the world. When a man goes higher in knowledge he
calls the very same Being the world of thought. Again when
knowledge itself comes, all illusions vanish, and man finds it is all
nothing but Âtman. I am that One Existence. This is the last
conclusion. There are neither three nor two in the universe; it is all
One. That One, under the illusion of Mâyâ is seen as many, just as a
rope is seen as a snake. It is the very rope that is seen as a snake.
There are not two things there, a rope separate and a snake
separate. No man sees two things there. Dualism and non-dualism
are very good philosophic terms, but in perfect perception we never
perceive the real and the false at the same time. We are all born
monists, we cannot help it. We always perceive the one. When we
perceive the rope, we do not perceive the snake at all, and when we
see the snake, we do not see the rope at all; it has vanished. When
you see illusion, you do not see real men. Suppose one of your
friends is coming from a distance in the street; you know him very
well, but through the haze and mist that is before you, you think it is
another man. When you see your friend as another man, you do not
see your friend at all, he has vanished. You are perceiving only one.
Suppose your friend is Mr. A., but when you perceive Mr. A. as Mr. B.
you do not see Mr. A. at all. In each case you perceive only one.
When you see yourself as a body, you are body and nothing else,
and that is the perception of the vast majority of mankind. They may
talk of soul and mind, and all these things, but what they perceive is
the physical form, the touch, taste, vision, and so on. Again, with
certain men, in certain states of consciousness, they perceive
themselves as thought. You know, of course, the story told of Sir
Humphrey Davy, who was making experiments before his class with
laughing-gas, and suddenly one of the tubes broke, and the gas
escaping, he breathed it in. For some moments he remained like a
statue. Afterwards he told his class that when he was in that state,
he actually perceived that the whole world is made up of ideas. The
gas, for a time, made him forget the consciousness of the body, and
that very thing which he was seeing as the body, he began to
perceive as ideas. When the consciousness rises still higher, when
this little puny consciousness is gone forever, that which is the
Reality behind shines, and we see it as the One Existence-
Knowledge-Bliss, the one Âtman, the Universal. “One that is only
knowledge itself, One that is bliss itself, beyond all compare, beyond
all limit, ever free, never bound, infinite as the sky, unchangeable as
the sky. Such an One will manifest Himself in your heart in
meditation.”
How does the Advaitist theory explain all these various phases of
heavens and hells and all these various ideas we find in all religions?
When a man dies it is said that he goes to heaven or hell, goes here

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