Transcript Sustainable marketing

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
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?
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What does it mean sustainability?
 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, 1987
 Sustainability: the ability to meet humanity’s 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.
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
 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
THREE DIMENSIONS OF
SUSTAINABILITY
 Environmental sustainability The ongoing preservation of essential
ecosystems and their functions.
reducing the effect of the firm’s 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 firm’s 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.
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 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 limits
THE 7 REVOLUTIONS TO A SUSTAINABLE
FUTURE
 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
Sustainable
Marketing
People
Equity
 The sustainable marketing
Planet
Environmen
t
Figure 1.1
The Triple Bottom Line
Profit
Economic
paradigm recognizes that
the success of business is
intertwined with
environmental,
social/ethical and economic
performance.
PEOPLE, PLANET, PROFIT
Sustainability issue
Broad 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 Long-term economic stability, sustainable and fair financial reward
Profit
for all stakeholders and profit for business to continue to reinvest,
longer-term ROI, full cost accounting
Table 1.7
Sustainability issues
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.
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.
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PUBLISHING AS PRENTICE HALL
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THINK ABOUT
Satisfying consumer’s immediate needs
and desires doesn’t always serve the
future best interest of either customers of
the business.
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 company’s short-term goals by giving
customers what they want now.
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.
SUSTAINABLE MARKETING
Meeting needs of consumers while preserving the
ability of future generations to meet their needs
Figure 20.1
SOCIETAL CLASSIFICATION OF
PRODUCTS
 Desirable products :Toyota’s hybrid Prius gives both a quiet ride and fuel
efficiency.
 GE’s Energy Smart compact fluorescent light bulb provides good lighting at
the same time it gives long life and energy savings.
 Haworth’s Zody office chair is not only attractive and functional but also
environmentally responsible.
 It’s 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.
 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 product’s pleasing
qualities.
 The challenge posed by salutary products is to add some pleasing
qualities so that they will become more desirable in consumers’ minds.
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 wellbeing 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
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.
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.
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.
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.
SUSTAINABILITY MARKETING’S
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.
 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 sustainability—as 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.
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.
MARKETING ETHICS
 Good ethics is a cornerstone of sustainable marketing.
 In the long run, unethical marketing harms customers, society and
damages a company’s 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
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.
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
 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
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".
CSR MODEL OR DIMENSION
 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 society’s legal system.
Thus , organizations must ensure every employees knows and observes relevant
laws. For example, it’s 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.
 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.
 It’s 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.
 Philanthropy responsibilities: encompasses those
corporate actions that are in response to society’s 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 business’s 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
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 (Dell’s partnership with the National Cristina Foundation
(NCF))
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 company’s 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
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.
CAUSE-MARKETING BENEFITS
 improve social welfare
 build strong consumer bonds
 create differentiated brand positioning
 enhance the company’s public image
 create a reservoir of goodwill
 boost internal morale and galvanize employees
 drive sales and attracting new Customers
 increase the firm’s market value.
 Consumers may develop a strong, unique bond with the firm that transcends
normal marketplace transactions.
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.
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 causes”—diseases 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.
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)
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: Dell’s “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.
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.
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.