Sustainable Marketing

Social Responsibility and Ethics

Chapter 16

Rest Stop: Previewing the Concepts

1. Define sustainable marketing and 2. 3. 4. 5.

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 Patagonias Response

Business Approach: To produce the highest-quality products while doing the least possible harm to the environment. Environmental Review Process examines all of the methods and materials used in making clothing. Socially Responsible: Donates time, services, and 1% of sales to grassroots environmental groups. Challenge: Eco-savvy buyers are asking hard questions about product origins.

Created Footprint Chronicles: Documents and shares with customers information about the environmental effects of every link in the firms supply chain. Both positive and negative information is provided. Results: Manufacturing, not transportation, takes the most energy and often creates bad by-products. PFOA used in rain shell jacket was found to be toxic, requiring a product change. CEO believes benefits outweigh the costs, and that firm is setting a new competitive bar.
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Sustainable Marketing

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.
E.g., McDonalds Play to Win strategy.

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Social Criticisms of Marketing

Marketings 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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Social Criticisms of Marketing

Three factors are cited as leading to

high prices:
High costs of distribution. High advertising and promotion costs. Excessive markups.

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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 products 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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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 firms 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 firms 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: Criticisms include:

Products needing replacement before they should because they are obsolete. 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. Banks and mortgage firms have targeted and exploited the disadvantaged for subprime loans via reverse redlining practices.

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Marketings Impact on Society as a Whole

Marketings 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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Marketings Impact on Other Businesses

Critics charge that a firms 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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Consumer Actions to Promote Sustainable Marketing

Two major movements include:

Consumerism Environmentalism

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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Consumer Actions to Promote Sustainable Marketing

Traditional sellers rights include the right to:

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.
1.
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Consumer Actions to Promote Sustainable Marketing

Traditional buyers rights include the right to:

1. 2. 3. 4. 5. 6. 7.

Not buy a product that is offered for sale. Expect the product to be safe. Expect the product to perform as claimed. Be well informed about important aspects of the product. Be protected against questionable products and marketing practices. Influence products and marketing practices in ways that will improve quality of life. Consume now in a way that will preserve the world for future generations of consumers.
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Consumer advocates call for more rights to:

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Consumer Actions to Promote Sustainable Marketing Environmentalism:

An organized movement of concerned citizens and government agencies to protect and improve peoples living environment.
Those who subscribe to environmentalism believe that a marketing systems goal should be to maximize quality of life.

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Consumer Actions to Promote Sustainable Marketing

Environmentalism:
First wave in the 1960s1970s 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.

Environmental sustainability portfolio:

Pollution prevention. Product stewardship. New clean technologies. Sustainability vision.
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Consumer Actions to Promote Sustainable Marketing

Public actions to regulate marketing

involve applications of law. Marketing management decisions face legal issues regarding:
Selling decisions. Advertising decisions. Channel decisions. Product decisions. Packaging decisions. Pricing decisions. Competitive relations decisions.
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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 consumers 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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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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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 companys requirements, consumers long-run interests, and societys long-run interests.
Seeks to introduce desirable products, rather than those that are deficient, salutary, or simply pleasing.
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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. 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

discuss its importance. 2. Identify the major social criticisms of marketing. 3. Define consumerism and environmentalism and explain how they affect marketing strategies. 4. Describe the principles of sustainable marketing. 5. Explain the role of ethics in marketing.
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1. Define sustainable marketing and

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