Transcript File - student business information

Sustainable Marketing
Social Responsibility and Ethics
Chapter
16
Rest Stop: Previewing the Concepts
1.
2.
3.
4.
5.
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.
Describe the principles of sustainable
marketing.
Explain the role of ethics in marketing.
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First Stop
Patagonia’s Sustainability Mission: Do No Harm
Background
 Business Approach: To
Patagonia’s Response
 Created Footprint Chronicles:
produce the highest-quality
Documents and shares with
products while doing the least
customers information about the
possible harm to the
environmental effects of every
environment. Environmental
link in the firm’s supply chain.
Review Process examines all
Both positive and negative
of the methods and materials
information is provided.
used in making clothing.
 Results: Manufacturing, not
 Socially Responsible: Donates
transportation, takes the most
time, services, and 1% of
energy and often creates bad bysales to grassroots
products. PFOA used in rain shell
environmental groups.
jacket was found to be toxic,
requiring a product change. CEO
 Challenge: Eco-savvy buyers
believes benefits outweigh the
are asking hard questions
costs, and that firm is setting a
about product origins.
new competitive bar.
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Sustainable Marketing
Socially and environmentally
responsible marketing that
meets the present needs of
consumers and businesses
while also preserving or
enhancing the ability of
future generations to meet
their needs.
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Marketing in Action
McDonald’s “Plan to Win” addresses environmental
issues related to food-supply sustainability,
environmentally sustainable packaging, and more
responsible store designs.
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Figure 16.1:
Sustainable Marketing
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Social Criticisms of Marketing
 Marketing’s impact on individual consumers has
been criticized in terms of:
–
–
–
–
High prices.
Deceptive practices.
High-pressure selling.
Shoddy, harmful, or
unsafe products.
– Planned
obsolescence.
– Poor service to
Is Hardee’s being socially irresponsible
disadvantaged
by marketing this big, juicy, calorie
consumers.
and cholesterol laden burger?
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Social Criticisms of Marketing
 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 do private labels.
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Social Criticisms of Marketing
 Marketers are often accused of deceptive
practices such as:
– Deceptive Pricing: Falsely advertising
“factory” or “wholesale” prices or large
reductions from phony high retail list prices.
– Deceptive Promotion: Misrepresenting a
product’s features or performance, or luring
consumers to store for out-of-stock item.
– Deceptive Packaging: Exaggerating package
contents through subtle design, using
misleading labeling, etc.
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Marketing in Action
A recent TerraChoice study found that 98% of
products making green claims committed at least
one of the greenwashing sins.
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Social Criticisms of Marketing
 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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Social Criticisms of Marketing
 Salespeople are often accused of using
high-pressure 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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Social Criticisms of Marketing
 Shoddy or unsafe product criticisms
include complaints that:
– Products are not made well or services are not
performed well.
– Products deliver little benefit or are even
harmful.
– Products are unsafe due to manufacturer
indifference, increased product complexity,
and poor quality control.
 Manufacturers provide desirable, quality
goods.
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Social Criticisms of Marketing
 Planned
obsolescence
refers to
products
needing
replacement
before they
should because
they are
obsolete.
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Social Criticisms of Marketing
 Criticisms of planned obsolescence
include:
– Use of materials and components that will
break, wear, rust, or rot before they should.
– Continually changing consumer concepts of
acceptable styles.
– Intentionally holding back attractive functional
features, then introducing them later to make
older models obsolete.
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Social Criticisms of Marketing
 Marketers are also accused of serving
disadvantaged consumers poorly as:
– The poor are forced to shop in smaller
stores where they pay more for inferior
goods.
– National chain stores, insurers, and
health care providers practice
“redlining” and refuse to open
businesses in poor neighborhoods.
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Marketing in Action
Critics have accused mortgage lenders of
“reverse redlining,” purposively targeting
disadvantaged consumers with subprime
mortgages that they couldn’t afford.
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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 too
much materialism.
• This criticism overstates the power of business
and ignores consumers ability to defend
themselves against advertising.
– 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 via:
– Acquisitions of competitors.
• Shrinking number of competitors.
– Marketing practices that create barriers to
entry.
• Patents, heavy promotional spending can limit
competition.
– Unfair competitive marketing practices.
• Predatory pricing and other practices.
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Marketing in Action
Wal-Mart 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.
Consumerism is one of two major consumer
actions to promote sustainable marketing.
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Consumer Actions to Promote
Sustainable Marketing
 Traditional seller’s rights include the right to:
1. Introduce any product in any size and style,
provided it is not hazardous to personal health or
safety; or, if it is, to include proper warnings and
controls.
2. Charge any price for the product, provided no
discrimination exists among similar kinds of
buyers.
3. Spend any amount to promote the product,
provided it is not defined as unfair competition.
4. Use any product message, provided it is not
misleading or dishonest in content or execution.
5. Use any buying incentive schemes, provided they
are not unfair or misleading.
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Consumer Actions to Promote
Sustainable Marketing
 Traditional buyers’ rights include the
right to:
1.Not buy a product that is offered for
sale.
2.Expect the product to be safe.
3.Expect the product to perform as
claimed.
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Consumer Actions to Promote
Sustainable Marketing
 Consumer advocates call for these
additional rights to be added:
4. Be well informed about important
aspects of the product.
5. Be protected against questionable
products and marketing practices.
6. Influence products and marketing
practices in ways that will improve
“quality of life”.
7. Consume now in a way that will preserve
the world for future generations of
consumers.
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Marketing in Action
Today’s product labels contain a variety of useful
information, from ingredients and nutrition facts to
recycling and country of origin information. Drink
maker IZZE uses the label to promote the brand, both
on the bottle and at its web site.
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Environmentalism
An organized movement of
concerned citizens and
government agencies to
protect and improve
people’s living environment.
Environmentalism is the second consumer
action to promote sustainable marketing.
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Consumer Actions to Promote
Sustainable Marketing
 Environmentalism:
– Those who subscribe to
environmentalism believe that
marketing system’s goal should be
to maximize quality of life.
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Consumer Actions to Promote
Sustainable Marketing
 Environmentalism:
– First wave in the 1960s - 1970s was driven by
environmental groups and concerned
consumers.
– Second wave in the 1970s and 1980s was
driven by government and resulted in
environmental laws.
– Third wave is occurring now. Firms are
accepting more responsibility and many have
adopted a policy of environmental
sustainability.
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Consumer Actions to Promote
Sustainable Marketing
 Environmental sustainability:
– A management approach that involves
developing strategies that both sustain
the environment and produce profits for
the company.
See some of the actions that Land Rover is
taking towards environmental sustantainability!
Click on filmstrip icon at left to play video
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Figure 16.2:
The Environmental Sustainability
Portfolio
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Marketing in Action
Suburu of Indiana works towards pollution prevention,
and claims that it now sends less trash to the landfill
each year than the average American family.
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Marketing in Action
To reduce its packaging waste, Coca-Cola is now
testing new contour bottles made from corn,
bioplastics, or more easily recycled aluminum.
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Figure 16.3:
Major Marketing Decision Areas
That May Be Called into
Question Under the Law
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Business Actions Toward
Sustainable Marketing
 Consumer-oriented marketing:
– The philosophy of sustainable marketing
that holds that the company should view
and organize its marketing activities
from the consumer’s point of view.
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Business Actions Toward
Sustainable Marketing
 Customer-value marketing:
– A principle of sustainable marketing that
holds that a company should put most of
its resources into customer-valuebuilding marketing investments.
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Business Actions Toward
Sustainable Marketing
 Innovative
marketing:
– A principle of
sustainable
marketing that
requires that a
company seek real
product and
marketing
improvements.
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Ninetendo’s customer-focused
innovation marketing resulted
in the Wii breaktrhough.
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Business Actions Toward
Sustainable Marketing
 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.
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Marketing in Action
Timberland’s corporate mission is about “trying to make a
difference in the communities where we live and work.”
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Business Actions Toward
Sustainable Marketing
 Societal marketing:
– A principle of sustainable marketing that
holds that a company makes marketing
decisions by considering consumers’
wants and interests, 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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Marketing in Action
Haworth’s Zody
office chair fits the
bill as a desirable
product. Not only
is it attractive and
functional, but also
environmentally
responsible.
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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:
– Distributor relations.
– Advertising standards.
– Customer service.
– Pricing.
– Product development.
– General ethical standards.
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Business Actions Toward
Sustainable Marketing
 What principle should guide firms and
marketing managers on issues of ethics
and social responsibility?
– Free market and legal system is one option.
– Letting responsibility fall to individual
companies and managers to develop a “social
conscience” is a second option.
 International marketers face special
challenges.
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Rest Stop: Reviewing the Concepts
1.
2.
3.
4.
5.
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.
Describe the principles of sustainable
marketing.
Explain the role of ethics in marketing.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
16 - 46
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mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
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