Marketers who already have an orientation toward creating value for customers in the markets they and their businesses serve can broaden understanding of that value by focusing more broadly on how marketing actions, products, services, and other market interventions contribute to improvements in the quality of life.
Quality of life is not a new topic, even within the marketing discipline. Nevertheless, it has not received the attention it deserves. As pressure mounts for firms to report more broadly about their impact on the larger society, marketers would do well to think about how to measure the impact of the firm, generally, and marketing more specifically, on the quality of life of the larger society.
One effort among many to attempt to measure quality of life has been carried out by The Economist Intelligence Unit. The Economist Intelligence Unit has used survey research to measure individual’s satisfaction with life across 140 cities around the world. As you will see below, it has also sought to identify factors that contribute to this subjective measure of satisfaction.
The Economist Intelligence Unit’s Quality Of Life Index
- Material wellbeing: GDP per person, at Purchasing Power Parity in $
- Life expectancy at birth in years
- Quality of Family life: based on divorce rate (per 1000 population)
- State of political freedom
- Job security: based on unemployment rate, %
- Climate: Average deviation of minimum and maximum monthly temperature from 14 degrees centigrade and the number of months with less than 30 mm of rainfall
- Personal Physical Security: based primarily on recorded homicide rates and ratings for risk from crime and terrorism
- Quality of Community life: based on membership in social organizations
- Governance: based on ratings of corruption
- Gender equality
It is perhaps not surprising that more than 50% of the variability in life satisfaction can be explained by GDP per person, both within and across geographic regions: income is important. The wisdom of Henry Ford’s decision to pay his workers well seems vindicated. But income is clearly not the only factor influencing life satisfaction and quality of life.
Studies of the quality of life, the influence of the firm, and marketing actions will become more important as firms grapple with how to report the broader dimensions of their performance.
Marketers have an opportunity to take a leadership role in measuring such dimensions, even as they become better at linking marketing actions and expenditures to financial performance.
Contributed to Branding Strategy Insider by: David Stewart, President’s Professor of Marketing and Business Law, Loyola Marymount University, Author, Financial Dimensions Of Marketing Decisions.
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