SUSTAINABLE MARKETING Kotler, philip and Lee, Nancy (2005) CSR
Doing the Most Good for your Company and Your Cause. Emery
Barry(2012) Sustainable Marketing Keller and Kotler (2012),
Marketing Management Diane Martin and John Schouten (2011)
Sustainable Marketing
Slide 2
THINK ABOUT IT THINK OF A PRODUCT YOU RECENTLY BOUGHT FOR
YOURSELF. DO YOU KNOW HOW IT WAS MADE OR WHERE THE MATERIALS
ORIGINATED? DO YOU KNOW WHICH, IF ANY, WERE TOXIC? DO YOU KNOW WHAT
WASTE WAS CREATED? WHAT WILL BECOME OF IT WHEN YOU ARE THROUGH WITH
IT? HOW MIGHT THE PRODUCT BE MADE MORE SUSTAINABLE? WOULD THAT ADD
TO ITS VALUE FOR YOU? WHOM ELSE WOULD IT BENEFIT? 2
Slide 3
What does it mean sustainability?
Slide 4
since the 1980s sustainability has been used more in the sense
of human sustainability on planet Earth and this has resulted in
the most widely quoted definition of sustainability as a part of
the concept sustainable development, that of the Brundtland
Commission of the United Nations on March 20, 1987sustainable
developmentBrundtland CommissionUnited Nations Sustainability: the
ability to meet humanitys needs without harming future generations
or without compromising the ability of future generations to meet
their own needs Human sustainability The opportunity for all people
to maintain fulfilling, productive lives while preserving or
replenishing the natural and economic systems that make their
well-being possible.
Slide 5
SUSTAINABLE DEVELOPMENT a new era of economic growth that is
forceful and at the same time socially and environmentally
sustainable; an economy is sustainable if it meets the needs of the
present without compromising the ability of the future generations
to meet their own needs. 1987 Brundtland Report Our Common Future
by the World Commission on Environment and Development
Slide 6
It indicated an attempt to resolve conflicting issues by
balancing economic growth against concern and care for the natural
environment, as well as calling for social justice and social
equity, and proposing the equitable distribution and use of natural
resources. World sustainability can be achieved via sustainable
business development which is based on three key elements or
pillars : (society) social equity, (economy) economic
sustainability and (environment) environmental sustainability.
three pillars of sustainability are not mutually exclusive and can
be mutually reinforcing
Slide 7
THREE DIMENSIONS OF SUSTAINABILITY Environmental sustainability
The ongoing preservation of essential ecosystems and their
functions. reducing the effect of the firms value chain activities
on the natural environment, maximizing recycled/renewable raw
materials, using environmentally friendly energy, minimizing
pollutants, designing production lines to use water and energy
efficiently, and seeking ways to reduce waste. Economic
sustainability The ongoing ability of an economic system to provide
for all human needs. refer to the firms economic impact on the
localities where it does business, such as job creation, wages, tax
flows and public works. Social sustainability The ongoing ability
of communities to provide for the wellbeing of all their members.
refer to how the firm performs relative to social justice, such as
avoiding the use of child labor, sweatshops, and other practices
that harm workers and providing employee benefits. Sustainable firm
provides safe work environments, health insurance, retirement
benefits, and educational opportunities for employees. (C)2012
PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 7
Slide 8
These three pillars form the basic of the framework known as
the Triple Bottom Line ( allows companies to assess their progress
towards sustainability by measuring overall organizational success,
including social, environmental and economical performance)
Elkington the co-founder and chair of sustainability, believed that
the standard business paradigm was changing as a result of seven
revolutions which were rapidly altering the structures of business,
leading business to a more sustainable future A diagram indicating
the relationship between the three pillars of sustainability,
suggesting that both economy and society are constrained by
environmental limitsdiagram society
Slide 9
THE 7 REVOLUTIONS TO A SUSTAINABLE FUTURE
Slide 10
People Equity Profit Economic Planet Environment Sustainable
Marketing Figure 1.1 The Triple Bottom Line The Triple Bottom Line
has also been referred to by the phrase people, planet and profit,
and also called the three Es- equity, economic and environment The
sustainable marketing paradigm recognizes that the success of
business is intertwined with environmental, social/ethical and
economic performance.
Slide 11
PEOPLE, PLANET, PROFIT Sustainability issueBroad considerations
Ecological sustainability Planet Renewable versus non-renewable
energy sources, carbon and water footprints, responsible
exploitation of natural resources, replenishment of natural
resources, impact of man-made materials, pollution, long-term
wellbeing of the natural environment Social sustainability People
Social equity, community relationships and the wellbeing of
individuals and the community (local/ global), ethics, ethical
treatment of all stakeholders including channel members and supply
chains Financial sustainability Profit Long-term economic
stability, sustainable and fair financial reward for all
stakeholders and profit for business to continue to reinvest,
longer-term ROI, full cost accounting Table 1.7 Sustainability
issues
Slide 12
SUSTAINABLE MARKETING Sustainable marketing is a holistic
approach whose aim is to ensure that marketing strategies and
tactics are specifically designed to secure a socially equitable,
environmentally-friendly and economically fair and viable business
for the benefit of current and future generations of customers,
employees and society as a whole.
Slide 13
CRITICAL THINKING ACTIVITY Debate the issues. Some people argue
that sustainability is just the business buzzword of the day and
that if they ignore it, it will go away. Others see sustainability
as the new must do that business must embrace, or die. Argue the
merits of both sides. (C)2012 PEARSON EDUCATION, INC. PUBLISHING AS
PRENTICE HALL 13
Slide 14
THINK ABOUT Satisfying consumers immediate needs and desires
doesnt always serve the future best interest of either customers of
the business.
Slide 15
DIFFERENCE BETWEEN CONVENTIONAL MARKETING AND SUSTAINABLE
MARKETING The marketing concept recognizes that organizations
thrive from day to day by deterring the current needs and wants of
target group customers and fulfilling those needs and wants more
effectively and efficiently than the competition. It focuses on
meeting the companys short-term goals by giving customers what they
want now.
Slide 16
EMERGENCE OF SUSTAINABLE MARKETING- SOCIETAL MARKETING
Considers the future welfare of consumers, was developed at the
late of 1960s Societal marketing suggests that the intersection of
organizational goals, consumer goals and societal goals leads to
long-term marketing opportunities and success.
Slide 17
SUSTAINABLE MARKETING Meeting needs of consumers while
preserving the ability of future generations to meet their needs
Figure 20.1
Slide 18
SOCIETAL CLASSIFICATION OF PRODUCTS
Slide 19
Desirable products :Toyotas hybrid Prius gives both a quiet
ride and fuel efficiency. GEs Energy Smart compact fluorescent
light bulb provides good lighting at the same time it gives long
life and energy savings. Haworths Zody office chair is not only
attractive and functional but also environmentally responsible. Its
made without PVC, chrome or any toxic materials. 98% of it can be
recycled; some 50% of it already has been. The energy used in the
manufacturing process is completely offset by wind-power credits,
and when the chair is ready to retire, the company will take it off
your hands and reuse its components. It was the first chair to be
endorsed by the American Physical Therapy Association.
Slide 20
The challenge posed by pleasing products is that they sell very
well but may end up hurting the consumer. The product opportunity,
therefore, is to add long run benefits without reducing the
products pleasing qualities. The challenge posed by salutary
products is to add some pleasing qualities so that they will become
more desirable in consumers minds.
Slide 21
SOCIAL MARKETING Social marketing refers to the application of
marketing principles, concepts and tools to problems of social
change. Social marketing programs are designed to influence
individuals behavior (or create beneficial behavioral change) to
improve their well- being or that of society. Its use to promote
sustainable consumption habits could be significant. Social
marketing programs are usually planned and implemented by
individual organizations focusing on a specific issue
Slide 22
ECOLOGICAL MARKETING Ecological marketing was developed during
the 1970s, drawing attention to both the negative and positive
impacts of marketing on the natural environment. A reaction against
those major industries causing the depletion of natural, and
non-renewable resources while damaging the environment through
their extraction and through pollution from processing and
manufacture. It looks at marketing mix from an ecological point of
view. Business was reactive rather than proactive to pressure and
legislation.
Slide 23
ENVIRONMENTAL AND GREEN MARKETING Similar approaches in 1980s
and 1990s reached their height Green marketing was developed
focusing on the target group of green consumers who would be
willing to pay premium prices for more environmentally friendly
products. In contrast to ecological marketing in the 1970s, green
marketing was not merely concerned with the depletion of
nonrenewable resources and critical substances. Green marketing
also included environmental issues like the loss of species, the
destruction of ecosystems, poverty in developing countries.
Slide 24
ECOPRENEURSHIP MARKETING Also referred to as enviropreneurship
Increasing interest through the1990s Mark the increasing interest
of the entrepreneur to exploit sustainability as a business
opportunity rather than a business threat. Combines environmental
concerns and social performance with entrepreneurship into a long
term approach to business, creating revenue by providing exchanges
that satisfy the organization's economic objectives without
compromising its social and environmental performance. it tends to
involve adopting an innovative or technology based solution to a
business opportunity, bringing the three elements of the Triple
Bottom Line together under an entrepreneurial orientation.
Slide 25
SUSTAINABLE MARKETING Change in the behavior of every one
(producers and consumers). Sustainable marketing emphasizes the
triple bottom line of ecological, social and economic issues;
unlike green marketing, which tends to focus on environmental
problems and the reduction of the environmental burden.
Slide 26
SUSTAINABILITY MARKETINGS DEFINITIONS (CONT.) Sustainability
marketing refers to planning, organizing, implementing and
controlling marketing resources and programs to satisfy consumers
wants and needs, while considering social and environmental
criteria and meeting corporate objectives. Sustainability marketing
may be defined as building and maintaining sustainable
relationships with customers, the social environment and the
natural environment.
Slide 27
Sustainable marketing may also be defined as the process of
creating, communicating, and delivering value to customers in such
a way that both natural and human capital are preserved or enhanced
throughout. sustainable marketing means marketing sustainably, that
is, in a sustainable manner AND sustainable marketing means
marketing sustainabilityas a concept, a cultural value, and a set
of practices Natural capital Consists of all the resources nature
provides, including both materials and ecosystem services. Human
capital Consists of all the resources that people provide,
including labor, talent, and creativity.
Slide 28
SUSTAINABILITY MARKETING MIX Customer solutions: go beyond
selling physical products and present solutions to customers
problems. Customer cost: does not only include financial price of a
buyer has to pay, but it also considers the psychological, social
and environmental costs of obtaining, using and disposing of a
product. Communication: goes beyond promotion, which is form of
persuasion and a one-way communication from seller to buyer.
Convenience: easy and convenient to access and use.
Slide 29
MARKETING ETHICS Good ethics is a cornerstone of sustainable
marketing. In the long run, unethical marketing harms customers,
society and damages a companys reputation and effectiveness. Thus,
the sustainable marketing goals of long term consumer and business
welfare can be achieved only through ethical marketing conduct.
companies need to develop corporate marketing Ethics
Slide 30
MARKETING ETHICS (CONT) Corporate marketing ethics are broad
guidelines that everyone in the organization must follow that cover
distributor relations, advertising standards, customer service,
pricing, product development, and general ethical standards There
are some difficult ethical issues marketers could face during their
careers. If marketers choose immediate sales-producing actions in
all of these cases, their marketing behavior might be described as
immoral one. And if marketers refuse to go along with any of the
actions, they might be ineffective as marketing managers Mangers
need a set of principles that will help them figure out the moral
importance of each situation and decide how far they can go in good
conscience.
Slide 31
WHAT PRINCIPLE SHOULD GUIDE COMPANIES AND MARKETING MANAGERS ON
ISSUES OF ETHICS AND SOCIAL RESPONSIBILITY? One philosophy is that
such issues are decided by the free market and legal system. Under
this principle, Companies and their managers are not responsible
for making moral judgments. Companies can in good conscience do
whatever the market and legal systems allow. A second philosophy
puts responsibility not on the system but in the hands of
individual companies and managers. This one suggests that a company
should have a social conscience. Companies and their managers
should apply high standards of ethics and morality when they making
corporate decisions, regardless of what the systems allows
Slide 32
Each company and marketing manger must work out a philosophy of
socially responsible and ethical behavior Managers must look beyond
what is legal and allowed and develop standards based on personal
integrity, corporate conscience and long run consumer welfare.
Ethics and social responsibility required a total corporate
commitment. They must be a component of the overall corporate
culture
Slide 33
CORPORATE SOCIAL RESPONSIBILITY CSR is a concept whereby
companies integrate social and environmental concerns in their
business operations and in their interaction with stakeholders on a
voluntary basis (the Commission of the European Communities,2001)
CSR implies a proactive approach to ethical behavior in which firms
seek not necessarily to maximize profits, but to optimize them
while benefitting society and the environment. World Business
Council for Sustainable Development (1999) CSR is the continuing
commitment by business to behave ethically and contribute to
economic development while improving the quality of life of the
workforce and their families as well as of the local community and
society at large".
Slide 34
CSR MODEL OR DIMENSION
Slide 35
There are four kinds of social responsibilities which
constitute total CSR: Economic Responsibilities: before it was
anything else, business organization was the basic economic unit in
the society. its principal role was to produce goods and services
that consumers needed and wanted and to make an acceptable profit
in the process. At some point the idea of the profit motive got
transformed into a notion of maximum profits, and this has been an
enduring value ever since. Legal Responsibilities: society expects
business to fulfill its economic mission within the framework of
legal requirements set forth by the societys legal system. Thus,
organizations must ensure every employees knows and observes
relevant laws. For example, its illegal for salespeople to lie to
consumers or mislead them about the advantages of buying a product.
Salespeople may not offer bribes to purchasing agents or others
influencing a B2B sale.
Slide 36
Ethical responsibilities : embrace those activities and
practices that are expected or prohibited by societal members even
though they are not codified into law. Ethical responsibilities
embody those standards, norms, or expectations that reflect a
concern for what consumers, employees, shareholders, and the
community regard as fair, just, or in keeping with the respect or
protection of stakeholders' moral rights. Its not easy to draw a
clear line between normal marketing practice and unethical behavior
( Kraft chose to stop ads some of its less healthy products such as
Oreas and Chips on TV programs targeted to children ages 6 to 11 )
Companies must adopt and disseminate a written code of ethics.
Build a company tradition of ethical behavior, and hold their
people fully responsible for observing ethical and legal
guidelines.
Slide 37
Philanthropy responsibilities: encompasses those corporate
actions that are in response to societys expectation that
businesses be good corporate citizens. This includes actively
engaging in acts or programs to promote human welfare or goodwill.
Examples of philanthropy include business contributions to the
arts, education, or the community, conducting in-house programs for
drug abusers,. These specific activities are guided by businesss
desire to engage in social roles not mandated or required by law
and not expected of business in an ethical sense, but which are
increasingly strategic . Therefore, philanthropy is more
discretionary or voluntary on the part of businesses even though
there is always the societal expectation that businesses provide
it. The CSR firm should strive to make a profit, obey the law, be
ethical, and be a good corporate citizen
Slide 38
CORPORATE SOCIAL INITIATIVES 1. Cause Promotions: A corporation
provides funds, in-kind contributions, or other corporate resources
to increase awareness and concern about a social cause or to
support fundraising, participation, or volunteer recruitment for a
cause. Persuasive communications are the major focus for this
initiative, with an intention to create awareness and concern
relative to a social issue and/or to persuade donors and volunteers
to contribute to the cause or participate in activities to support
the cause. Campaign plans are based on clear definitions of target
audiences, communication objectives and goals, support for promised
benefits, opportune communication channels, and desired
positioning. Cause promotion is distinguished from other corporate
social initiatives primarily by the emphasis on promotional
strategies. Dell Recycle: Dell sponsors efforts to collect used
computers for donations to local nonprofits and public agencies
(Dells partnership with the National Cristina Foundation
(NCF))
Slide 39
2. Cause Related Marketing: A corporation commits to making a
contribution or donating a percentage of revenues to a specific
cause based on product sales (this offer is for an announced period
of time and 4 a specific product and a specified charity. The
distinction from other corporate social initiatives that it lets
companies do well by doing good by linking purchases of the
companys products or services with fundraising for worthwhile
causes or charitable organizations. Ex: buy a pink mixer from
KitchenAid, a division of the appliance maker Whirlpool, and
support breast cancer research and patient services. Recycle up to
3 items of select equipment, such as desktops, monitors, or
notebooks, and get 50% off the regular recycling price per unit.
Discounts for recycling Online: Dell offers a coupon for 10% off
any online purchases selected new products when up to 3 used
products are recycled online
Slide 40
SUITABLE AND MOST IDEAL FOR COMPANIES WITH PRODUCTS: Have mass
market appeal Large customer bases Wide distribution channels
Especially those in the financial services, consumer goods,
airlines, and telecommunications industries.
Slide 41
CAUSE-MARKETING BENEFITS improve social welfare build strong
consumer bonds create differentiated brand positioning enhance the
companys public image create a reservoir of goodwill boost internal
morale and galvanize employees drive sales and attracting new
Customers increase the firms market value. Consumers may develop a
strong, unique bond with the firm that transcends normal
marketplace transactions.
Slide 42
CAUSE-MARKETING BENEFITS Build brand awareness Enhance brand
image Establish brand credibility Evoke brand feelings Create a
sense of brand community Elicit brand engagement Ex: British
Airways developed a CRM campaign called Change for Good to
encourage its passengers to help by donating the foreign currency
left over from their travels to UNICEF. The airline advertised its
program during an in flight video, on the backs of seat cards, and
with in-flight announcements. Its also developed a TV ad that
featured a child thanking BA for its contribution to UNICEF.
Slide 43
A. Many companies choose to focus on one or a few main causes
to simplify execution and maximize impact. B. Limiting support to a
single cause may limit the pool of consumers or other stakeholders
who could transfer positive feelings from the cause to the firm. C.
Opportunities may be greater with orphan causesdiseases that
afflict fewer than 200,000 people. D. Most firms tend to choose
causes that fit their corporate or brand image and matter to their
employees and shareholders.
Slide 44
3. Corporate Social Marketing : A corporation supports the
development or implementation of a behavior change campaign
intended to improve public health and safety. This initiative is
probably most similar to cause promotion initiatives. When,
however, campaign goals, objectives, messages, and related
activities are selling a particular desired behavior. Crest:
desired behavior(ensure good oral health for children), target
audiences (primarily children in grades K-3), sample activities
(education, dental care, oral health tools), major partners
(American Dental Association and Boys and Girls Clubs)
Slide 45
4. Corporate Philanthropy: A corporation makes a direct
contribution to a charity or cause, most often in the form of cash
grants or donations. Other terminology most closely associated with
this initiative includes community giving, community relations,
corporate citizenship and community affairs. Direct Giving: Dells
Direct Giving program gives employees a chance to contribute to the
nonprofit of their choice through payroll deduction. Most of the
employees donations are made to Earth Share, which supports
multiple environmental projects.
Slide 46
5. Community Volunteering: A corporation supports and
encourages employees, retail partners and franchise members to
volunteer their time to support local community organizations and
causes Volunteer efforts may include employees volunteering their
expertise, talents, ideas and /or physical labor Organizations
support may involve providing paid time off from work, matching
services to help employees find opportunities of interest and
organizing teams to support specific causes the corporation has
targeted. Dell employees around the globe participate in Global
Community involvement Week each September, including activities
such as park cleanup.
Slide 47
6. Socially Responsible Business Practices: A corporation
adopts and conducts discretionary business practices and
investments that support social causes to improve community
well-being and protect the environment. Most initiatives related to
socially responsible practices related to altering internal
procedures and policies, such as those related to product
offerings, facility design, choosing manufacturing and packaging
materials, assembly, and employees support. It can be also
reflected in external reporting of consumer and investor
information and demonstrated by making provisions for consumer
access and privacy, and can be taken into consideration when making
decisions regarding hiring practices and facility and plant
locations. Dell creates products design programs with specific
environmental guidelines, policies, and goals. Dell participate in
the U.S Environmental Protection Agency (EPA) ENERGY STAR program
to reduce power consumption of office equipment. The program allows
manufacturers to partner with EPA to design and certify products
that meet or exceed federal government guidelines for low power
consumption.