Sustainable Marketing Sustainable Marketing Social Responsibility and Ethics Chapter 16

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Sustainable MarketingSustainable MarketingSocial Responsibility and Ethics

Chapter 16

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall 16 - 2

1. Define sustainable marketing and 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.

Rest Stop:Rest Stop: Previewing the ConceptsPreviewing the Concepts


Patagonia’s Sustainability Mission: Do No Harm

First StopFirst Stop

Background 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.

Patagonia’s Response Created Footprint Chronicles:

Documents and shares with customers information about the environmental effects of every link in the firm’s 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.


Sustainable MarketingSustainable Marketing

Socially and environmentally Socially and environmentally responsible marketing that responsible marketing that meets the present needs of meets the present needs of consumers and businesses consumers and businesses while also preserving or while also preserving or enhancing the ability of enhancing the ability of future generations to meet future generations to meet their needs.their needs.


Marketing in ActionMarketing in Action

McDonald’s “Plan to Win” addresses environmental issues related to food-supply sustainability, environmentally sustainable packaging, and more responsible store designs.


Figure 16.1:Figure 16.1:

Sustainable MarketingSustainable Marketing


Social Criticisms of MarketingSocial 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.

Is Hardee’s being socially irresponsible by marketing this big, juicy, calorie and cholesterol laden burger?



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.



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.



A recent TerraChoice study found that 98% of products making green claims committed at least one of the greenwashing sins.

http://sinsofgreenwashing.org/





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.

http://www.ftc.gov/index.shtml



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.



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.



Planned obsolescence refers to products needing replacement before they should because they are obsolete.



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.



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.



Critics have accused mortgage lenders of “reverse redlining,” purposively targeting disadvantaged consumers with subprime mortgages that they couldn’t afford.


Marketing’s Impact on Marketing’s Impact on Society as a WholeSociety 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.


Fuel for ThoughtFuel 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?


Marketing’s Impact on Marketing’s Impact on Other BusinessesOther 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.



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.


ConsumerismConsumerism

An organized movement of An organized movement of citizens and government citizens and government agencies to improve the agencies to improve the rights and power of buyers rights and power of buyers in relation to sellers.in relation to sellers.

Consumerism is one of two major 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.

Consumer Actions to Promote Consumer Actions to Promote Sustainable MarketingSustainable 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.



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.



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.

http://www.izze.com/#products


EnvironmentalismEnvironmentalism

An organized movement of An organized movement of concerned citizens and concerned citizens and government agencies to government agencies to protect and improve protect and improve people’s living environment.people’s living environment.

Environmentalism is the second consumer action to promote sustainable marketing.



Environmentalism:– Those who subscribe to

environmentalism believe that marketing system’s goal should be to maximize quality of life.



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.



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



The Environmental Sustainability The Environmental Sustainability PortfolioPortfolio



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.



To reduce its packaging waste, Coca-Cola is now testing new contour bottles made from corn, bioplastics, or more easily recycled aluminum.



Major Marketing Decision Areas Major Marketing Decision Areas That May Be Called into That May Be Called into Question Under the LawQuestion Under the Law


Business Actions Toward Business Actions Toward Sustainable MarketingSustainable 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.



Customer-value marketing:– A principle of sustainable marketing that

holds that a company should put most of its resources into customer-value-building marketing investments.



Innovative marketing:– A principle of

sustainable marketing that requires that a company seek real product and marketing improvements. Ninetendo’s customer-focused

innovation marketing resulted in the Wii breaktrhough.



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.



Timberland’s corporate mission is about “trying to make a difference in the communities where we live and work.”



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.



Societal Classification of ProductsSocietal Classification of Products



Haworth’s Zody office chair fits the bill as a desirable product. Not only is it attractive and functional, but also environmentally responsible.



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.



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.


1. Define sustainable marketing and 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.

Rest Stop:Rest Stop: Reviewing the ConceptsReviewing the Concepts


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Copyright © 2011 Pearson Education, Inc. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice HallPublishing as Prentice Hall