sustainable marketing kotler, philip and lee, nancy (2005) csr doing the most good for your company...

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? 2

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, 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.

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 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

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

THE 7 REVOLUTIONS TO A SUSTAINABLE FUTURE

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.

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

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. (C)2012 PEARSON EDUCATION, INC. PUBLISHING AS PRENTICE HALL 13

THINK ABOUT Satisfying consumers immediate needs and desires doesnt 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 companys 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 :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.

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.

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 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.

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.

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 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

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 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.

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.

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

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))

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

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 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.

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 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.

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: 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.

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.

sustainable marketing kotler, philip and lee, nancy (2005) csr doing the most good for your company...

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