Marketing Breakdown

By Anabel Kim

Marketing is everywhere, influencing almost every financial decision we make. Companies use different marketing tactics to encourage spending in ways that affect our financial goals. Financial literacy, the ability to manage money effectively, includes recognizing how marketing shapes our spending decisions. Understanding marketing can lead us to make smarter spending choices.

Marketing creates urgency through tactics like “limited-time offers” or “buy-one-get-one-free” deals. These strategies encourage impulse buying, because we feel as though we will save money in the long term if we buy something while it's discounted. Recognizing these offers can help us see through these tactics, allowing us to prioritize needs and stick to budgets rather than giving in to what may seem like a good deal. 

In addition, brand loyalty often leads consumers to pay more for products that offer no additional value. It’s important for consumers to know how to assess whether a brand name is worth the cost or if lower-cost alternatives offer the same quality. For example, splurging on something that is trendy or flashy may not be the best decision if you can find a dupe that serves the same purpose. This mindset saves money without sacrificing any value.

Thirdly, banks and financial institutions market credit cards and loans with interesting offers like rewards or low interest rates. These rewards can seem beneficial, but in reality they all have trade-offs. Financial literacy helps us read the fine print, understanding fees, interest rates, and long-term effects before committing to any type of financial product.

Influencers may also affect our spending urges. For example, if a popular celebrity or social media persona is endorsing a product, we may feel the need to buy it. However, oftentimes these influencers are being paid for their promotion, and in reality, do not even use the product. It’s important to understand that just because someone else has something, it does not mean you need it.

Combining financial literacy with marketing awareness helps us to make informed, financially smart decisions. Recognizing marketing’s influence helps us manage our money more effectively and stick to our financial goals.