Transcript Chapter 16 slides

Sustainable Marketing
Social Responsibility and Ethics
Chapter 16
Rest Stop: Previewing the Concepts
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Define sustainable marketing and discuss its
importance
Identify the major social criticisms of
marketing
Define consumerism and environmentalism
and explain how they affect marketing
strategies
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Rest Stop: Previewing the Concepts
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Describe the principles of sustainable
marketing
Explain the role of ethics in marketing
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First Stop: Sustainability at Unilever
• Under its Sustainable Living Plan, Unilever has
set out to create a better future every day for
people around the world
• Sustainability efforts span the entire value chain
• Works with final consumers to improve the social
and environmental impact of its products in use
• Fuels innovation, resulting in new eco-friendly
products and new customer benefits
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Sustainable Marketing
• Socially and environmentally responsible
marketing that:
• Meets the present needs of consumers and
businesses
• Preserves or enhances the ability of future
generations to meet their needs
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Figure 16.1 - Sustainable Marketing
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Sustainable Marketing
• McDonald’s “Plan to
Win” addresses
issues related to:
• Food-supply
sustainability
• Sustainable packaging
• Reuse and recycling
• Responsible store
designs
“Plan to Win” strategy has both created
sustainable value for customers and
positioned the company for a profitable
future
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Social Criticisms of Marketing
• Marketing’s impact on individual consumers
has been criticized in terms of:
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High prices
Deceptive practices
High-pressure selling
Shoddy, harmful or unsafe products
Planned obsolescence
Poor service to disadvantaged consumers
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High Prices
• Three factors are
cited as leading to
high prices:
• High costs of
distribution
• High advertising and
promotion costs
• Excessive markups
Heavily promoted brands
cost much more than private
labels virtually identical nonbranded or store-branded
product
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Deceptive Practices
• Deceptive pricing - Falsely advertising factory
or wholesale prices or large reductions from a
phony high retail list price
• Deceptive promotion - Misrepresenting a
product’s features or performance, or luring
consumers to store for out-of-stock item
• Deceptive packaging - Exaggerating package
contents, using misleading labeling, etc.
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Deceptive Practices
• Deceptive practices have led to legislation
and other protective consumer actions
• FTC governs deceptive practices
• Use of puffery is legal, but may harm consumers
in subtle ways
• Deceptive practices are not sustainable as they
harm a firm’s business in the long-run
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High-Pressure Selling Tactics
• Salespeople are often accused of using highpressure selling tactics:
• In persuading people to buy goods they had no
intention of buying
• Because prizes are often given to top sellers
• Marketers have little to gain from highpressure tactics
• Such actions damage relationships with the
firm’s customers
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Shoddy or Unsafe Products
• Products are not made well or services are
not performed well
• Products are unsafe due to manufacturer
indifference, increased product complexity,
and poor quality control
• Products deliver little benefit or are even
harmful
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Planned Obsolescence
• Causing products to become obsolete before
they actually need to be replaced
• Using materials and components that will break,
wear, rust, or rot sooner than they should
• Holding back functional features, and introducing
them later to make older models obsolete
• Perceived obsolescence - continually changing
consumer concepts of acceptable styles to
encourage more and earlier buying
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Poor Service to Disadvantaged
Consumers
• They are forced to shop in small stores where
they pay more for inferior goods
• National chain retailers practice redlining and
refuse to open businesses in poor
neighborhoods
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Underserved Consumers
Lack of supermarkets in low income areas, have left many disadvantaged
consumers with little or no access to healthy, affordable fresh foods
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Marketing’s Impact on
Society as a Whole
• Marketing’s impact on society as a whole has
been criticized in terms of:
• Creating false wants and encouraging
materialism
• Overselling private goods at the expense of
public (social) goods
• Creating cultural pollution, stemming from
constant exposure to marketing messages
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Fuel for Thought
• Marketing messages are prevalent
throughout the United States, and critics
contend that this causes “cultural pollution
• Do you agree? Why or why not?
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Marketing’s Impact on
Other Businesses
• Critics charge that a firm’s marketing
practices can harm other companies and
reduce competition through:
• Acquisitions of competitors
• Marketing practices that create barriers to entry
• Unfair competitive marketing practices
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Marketing’s Impact on
Other Businesses
Walmart was accused of
predatory pricing practices by
local pharmacists
Wal-Mart countered charges
by noting that their
tremendous buying power
allows them to sell at this
price and still make a profit
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Consumerism
• An organized movement of citizens and
government agencies to improve the rights
and power of buyers in relation to sellers
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Traditional Seller’s Rights
• Introduce any product in any size and style,
provided it is not hazardous to safety; or, if it
is, to include proper warnings and controls
• Charge any price for the product, provided no
discrimination exists among similar kinds of
buyers
• Spend any amount to promote the product,
provided it is not defined as unfair
competition
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Traditional Seller’s Rights
• Use any product message, provided it is not
misleading or dishonest in content or
execution
• Use any buying incentive schemes, provided
they are not unfair or misleading
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Traditional Buyers’ Rights
• To not buy a product that is offered for sale
• To expect the product to be safe
• To expect the product to perform as claimed
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Proposed Consumer Rights
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Consumer advocates call for additional rights:
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To be protected against questionable products
and marketing practices
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To influence products and marketing practices in
ways that will improve quality of life
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To consume now in a way that will preserve the
world for future generations of consumers
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To be informed about important aspects of the
product
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Consumers’ Right to Information
• Product labels contain information about
ingredients, nutrition facts, recycling, country
of origin
Jones Soda
even puts
customer
submitted
photos on
its labels
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Environmentalism
• An organized movement of concerned
citizens and government agencies to
protect and improve people’s living
environment
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Environmentalism
• Those who subscribe to environmentalism
believe that marketing system’s goal should
be to maximize quality of life
• Life quality includes the quantity and quality of
consumer goods and services and quality of the
environment
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Environmentalism
• Is concerned with damage to the ecosystem
caused by global warming, resource
depletion, toxic and solid wastes, litter, etc.
• Over the past several decades, such concerns
have resulted in federal and state laws and
regulations
• In recent years, however, firms have accepted
more responsibility and many have adopted a
policy of environmental sustainability
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Environmental sustainability
• Management approach that involves
developing strategies that both sustain the
environment and produce profits for the
company
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Figure 16.2 - The Environmental
Sustainability Portfolio
Sustainability Efforts—Pollution
Prevention
Subaru of Indiana claims that it now sends less trash to
the landfill each year than the average American family
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New Clean Technology
• Many companies are
adopting design for
environment (DFE)
and cradle-to-cradle
practices
• Design products that
are easier to recover,
reuse, recycle, or
safely return to
nature after usage
Coke is researching and testing new
bottles made from aluminum, corn, or
bioplastics
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Marketing at Work
• Sustainability means:
• Driving out hidden
costs
• Conserving natural
resources
• Providing sustainable
and affordable
products so
customers can save
money and live better
Figure 16.3 - Marketing Decision Areas That
May be Called into Question Under the Law
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Consumer-oriented marketing
• A principle of sustainable marketing that
holds a company should view and organize its
marketing activities from the consumer’s
point of view
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Customer-value marketing
• A principle of sustainable marketing that
holds a company should put most of its
resources into customer-value-building
marketing investments
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Innovative marketing
• A principle of sustainable marketing that
requires a company to seek real product and
marketing improvements
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Sense-of-Mission Marketing
• A principle of
sustainable
marketing that holds
that a company
should define its
mission in broad
social terms rather
than narrow product
terms
Sense-of-mission marketing has made
Pedigree the world’s number one dog food
brand
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Marketing at Work
• Ben & Jerry’s, The
Body Shop, Burt’s
Bees, Stonyfield
Farms, Patagonia,
Timberland, and
TOMS Shoes
pioneered the
concept of valuesled
Method’s mission is to
inspire a happy, healthy
home revolution
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Societal marketing
• A company makes marketing decisions by
considering consumers’ wants, the company’s
requirements, consumers’ long-run interests,
and society’s long-run interests
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Figure 16.4 - Societal Classification of
Products
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Deficient Products that have neither immediate
products appeal nor long-run benefits
Pleasing
products
Products that give high immediate
satisfaction but may hurt consumers in
the long run
Salutary
products
Products that have low immediate
appeal but may benefit consumers in the
long run
Desirable Products that give both high immediate
products satisfaction and high long-run benefits
Desirable Products
PepsiCo has hired a team of scientists to
help it develop a larger portfolio of
healthy product options, such as the
Trop50 brand
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Business Actions Toward Sustainable
Marketing
• Firms need to develop corporate marketing
ethics policies to serve as broad guidelines
that everyone in the organization must follow
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Business Actions Toward Sustainable
Marketing
• Ethics policies should cover:
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Distributor relations
Advertising standards
Customer service
Pricing
Product development
General ethical standards
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Business Actions Toward Sustainable
Marketing
• In solving issues on ethics and social
responsibility, companies and marketing
managers can rely on principles of:
• The free market and legal system
• Letting responsibility fall to individual companies
and managers to develop a social conscience
• International marketers face the challenge of
varying business practices and standards
across countries
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Rest Stop: Previewing the Concepts
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•
•
Define sustainable marketing and discuss its
importance
Identify the major social criticisms of
marketing
Define consumerism and environmentalism
and explain how they affect marketing
strategies
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Rest Stop: Previewing the Concepts
•
•
Describe the principles of sustainable
marketing
Explain the role of ethics in marketing
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Copyright © 2013 Pearson Education, Inc.
Publishing as Prentice Hall
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