Sustainable MarketingSocial Responsibility and Ethics

Chapter 16

Rest Stop: Previewing the Concepts

• 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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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

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“Plan to Win” strategy has both created sustainable value for customers and positioned the company for a profitable future

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 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

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Heavily promoted brands cost much more than private labels virtually identical non-branded or store-branded product

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 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 high-pressure 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

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Lack of supermarkets in low income areas, have left many disadvantaged consumers with little or no access to healthy, affordable fresh foods

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

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Walmart was accused of predatory pricing practices by local pharmacistsWal-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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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

• Consumer advocates call for additional rights: • To be protected against questionable products

and marketing practices• To influence products and marketing practices in

ways that will improve quality of life• To consume now in a way that will preserve the

world for future generations of consumers• 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

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Jones Soda even puts customer submittedphotos on its labels

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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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Figure 16.2 - The Environmental Sustainability Portfolio

Sustainability Efforts—Pollution Prevention

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Subaru of Indiana claims that it now sends less trash to the landfill each year than the average American family

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

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Coke is researching and testing new bottles made from aluminum, corn, or bioplastics

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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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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Sense-of-mission marketing has made Pedigree the world’s number one dog food brand

Marketing at Work

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Method’s mission is to inspire a happy, healthy home revolution

• Ben & Jerry’s, The Body Shop, Burt’s Bees, Stonyfield Farms, Patagonia, Timberland, and TOMS Shoes pioneered the concept of values-led

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Figure 16.4 - Societal Classification of Products

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Desirable Products

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PepsiCo has hired a team of scientists to help it develop a larger portfolio of healthy product options, such as the Trop50 brand

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

• 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

• 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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