Reflective Paper

Unit5Slides-Sustainablility.ppt

Home >Psychology homework help >Reflective Paper

Unit 5

Sustainability

Unilever is the world’s third-largest consumer products company. For 12 years running, Unilever has been named sustainability leader in the food and beverage industry by the Dow Jones Sustainability Indexes. The company recently launched its Sustainable Living Plan, by which it intends to double its size by 2020 while at the same time reducing its impact on the planet and increasing the social benefits arising from its activities.

Does knowing about Unilever’s sustainable marketing activities change your opinion about any of these products that you purchase? Are you more likely to purchase them again in the future, now that you know?

Learning Objectives

Define sustainable marketing and discuss its importance.

Identify the major social criticisms of marketing.

Define consumer activism and environmentalism and explain how they affect marketing strategies.

Describe the principles of sustainable marketing.

Explain the role of ethics in marketing.

Outlines learning objectives from this chapter.

Sustainable Marketing

Socially and environmentally responsible marketing (business) that meets the needs of customers while preserving the ability of future generations to meet their needs.

Sustainable Value – healthy food?

Act in a socially and

environmentally

responsible manner

LO 1: Define sustainable marketing and discuss its importance.

Sustainable Marketing

Group Discussion:

- Do you believe restaurants have a basic responsibility to help consumers make healthy choices? Or is their role to serve food that consumers want?

- Do you think that customers really want McDonald’s healthy options? Defend your position.

Future needs of customers and the company

LO 1: Define sustainable marketing and discuss its importance.

- Unilever’s plan to do well by doing good is outlined in opening pages of Chapter 3

Social Criticisms of Marketing

High Prices

High Costs of Distribution

High Advertising and Promotion Costs

Excessive Markups

LO 2: Identify the major social criticisms of marketing.

Social Criticisms of Marketing

Deceptive Practices

Pricing(false advertising)

Promotion(misrepresenting)

Packaging(exaggerating)

Greenwashing(green marketing)

LO 2: Identify the major social criticisms of marketing.

Pricing: falsely advertising “wholesale” or “factory” prices or large reductions from phony high retail list prices
Promotion: misrepresenting a product’s features or performance, or luring consumers to store for out-of-stock items
Packaging: exaggerating package contents through design, misleading labeling, or size

Social Criticisms of Marketing

High-Pressure Selling
Unsafe Products

Most social criticisms of marketing stem from the occasional misuse of marketing tactics by nefarious companies. Most of the criticisms are regulated or controlled in some way (in Canada) like deceptive pricing

LO 2: Identify the major social criticisms of marketing.

Social Criticisms of Marketing

Planned Obsolescence (causes products to become obsolete before replacement)

Using inferior materials and components

Continuous changing of acceptable styles

Delaying features until follow-up version

LO 2: Identify the major social criticisms of marketing.

- Planned obsolescence causes products to become obsolete before replacement by:

- Using materials and components that break, wear, rust, or rot before they should

- Continually changing acceptable styles

- Intentionally holding back functional features, then introducing them later to make older models obsolete

Social Criticisms of Marketing

Consequences of Deceptive Practices:

Legislative penalty from Competition Bureau

Ontario’s Consumer Protection Act

Canada Consumer Product Safety Act (CCPSA)
- protects Canadians from unsafe consumer products.

LO 2: Identify the major social criticisms of marketing.

Impact on society has been criticized as:

Encouraging materialism

Overselling private goods

Creating cultural pollution
(loss of cultural values)

Social Criticisms of Marketing

LO 2: Identify the major social criticisms of marketing.

- Impact on society is alleged to have taken place through a) creating false needs, b) encouraging purchase of private rather than public products, and c) creating a logjam of messages competing for the attention of overwhelmed customers.

Social Criticisms of Marketing

Marketing practices reduce competition by:

Acquisition and shrinking of competitors

Creating barriers to entry

Unfair practices such as predatory pricing
(pricing strategy – set products at a lower price to drive out the competitors)

LO 2: Identify the major social criticisms of marketing.

Consumer Actions to Promote
Sustainable Marketing

Consumerism:

Organized movement to improve the rights and power of buyers in relation to sellers

Environmentalism:

Organized movement to protect and improve people’s living environment

Marketers Vs. Environmentalists

Concerned with marketing’s effects on the environment and with the environmental costs of serving consumer needs and wants

LO 3: Define consumer activism and environmentalism, and explain how they affect marketing strategies.

Consumer Activism

Sellers’ Rights

Introduce any product in any size and style
Charge any price for the product
Spend any amount to promote the product
Use any product message
Use any buying incentive schemes

Buyers’ Rights

Not buy a product that is offered for sale
Expect the product to be safe
Expect the product to perform as claimed

LO 3: Define consumer activism and environmentalism, and explain how they affect marketing strategies.

- 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

- The right to charge any price for the product, provided no discrimination exists among similar kinds of buyers

- The right to spend any amount to promote the product, provided it is not defined as unfair competition

- The right to use any product message, provided it is not misleading or dishonest in content or execution

- The right to use any buying incentive programs, provided they are not unfair or misleading

Consumer Activism

Consumer advocates call for more rights in order to:

Be well informed about aspects of the product

Be protected from bad products and practices

Influence products to improve ”quality of life”

Preserve the world for future generations of consumers

LO 3: Define consumer activism and environmentalism, and explain how they affect marketing strategies.

Environmentalism

Environmentalism:

An organized movement to protect and improve people’s living environment

LO 3: Define consumer activism and environmentalism, and explain how they affect marketing strategies.

- Those who subscribe to environmentalism believe that a marketing system’s goal should be to maximize quality of life.

Environmentalism

Evolution of Environmentalism:

1960s–1970s: Concerned consumers and environmental groups
1970s–1980s: Driven by government, resulting in environmental laws
Firms accepting more responsibility and are adopting environmental sustainability

LO 3: Define consumer activism and environmentalism, and explain how they affect marketing strategies.

Consumerism & Environmentalism

Environmental Sustainability Portfolio

It is a management approach (part of sustainable marketing) that favors developing strategies that sustain the environment while also producing profits for the company

LO 3: Define consumer activism and environmentalism, and explain how they affect marketing strategies

Sustainability Portfolio
Pollution prevention
Product stewardship
New clean technologies
Sustainability vision

Sustainable Marketing Principles

Consumer-Oriented:

Marketing activities are viewed and organized from the consumer’s point of view (market’s)

Customer-Value Marketing:

Company resources go toward customer-value-building marketing investments (build customer value)

Global 100 Most Sustainable Corporations in the World

LO 4: Describe the principles of sustainable marketing.

Principles of Sustainable Marketing

Innovative Marketing (Product Improvement)
Sense-of-Mission Marketing

(A brand defines its mission in such a way that it has a broader social context rather than being merely product oriented)

LO 4: Describe the principles of sustainable marketing.

- Innovative (and green) marketing: In addition to the Nike FuelBrand, the 100 percent compostable chip bag developed by PepsiCo for its Sun Chips brand

was widely accepted by Canadians (even more so than Americans.)

Societal Marketing

Societal Marketing considers:

Consumer’s wants & interests

The company’s requirements

Society’s long-term interests
(Reduce, Repair, Reuse, Recycle and Reimagine)

LO 4: Describe the principles of sustainable marketing

Principles of Sustainability

Societal Classification of Products:

Neither short term appeal nor long term benefits

Short term appeal but no long term benefits

Low short term appeal but long term benefits

Short term appeal and long term benefits

LO 4: Describe the principles of sustainable marketing.

- Sustainable marketing seeks to introduce desirable products, rather than those that are deficient, salutary, or simply pleasing.

Ethics

To guide their staff, firms develop corporate marketing ethics policies which cover:

Distributor relations

Advertising standards

Customer service

Pricing

Product development

General ethical standards

Fast-moving consumer goods (FMCG)
New Colors?

Improved Formulas?

Canadian Marketing Association’s Code of Ethics and Standards of Practice

LO 5: Explain the role of ethics in marketing.

Ethics

Do Not Contact Service
Do Not Call List

LO 5: Explain the role of ethics in marketing.

Ethics

2 Principles of Marketing Ethics Formation

Free market and legal system

Individual companies and managers to develop a “social conscience”

LO 5: Explain the role of ethics in marketing.

- In addition to the 2 principles of marketing ethics, international marketers face special challenges

The Tragedy of the Commons

Credited to Garrett Hardin, but its roots go back to Aristotle
Aristotle stated that what is common to the most people will receive the least amount of care
Underlying belief is that free access with unrestricted use of any resource that is finite will ultimately ruin the resource through overexploitation

Garrett James Hardin was an American ecologist who warned of the dangers of human overpopulation. He is most famous for his exposition of the tragedy of the commons, in a 1968 paper of the same title in Science, which called attention to "the damage that innocent actions by individuals can inflict on the environment“

The Tragedy of the Commons - https://www.youtube.com/watch?v=CxC161GvMPc

Natural Environment as a Stakeholder

Considered a stakeholder without a voice
Decision makers would only consider the natural environment as a stakeholder if the consequences that impact the natural environment also had an impact on the performance evaluation of the firm or the individual decision maker

Natural Environment as a Competitive Advantage

By focusing on environmentally friendly strategies, firms are able to market their goods as ecofriendly which helps differentiate their products
Strategy 1: Ecoefficency
(Eco friendly ways to design and manufacture new products)
Strategy 2: Beyond Compliance Leadership
(EMS certification by the International Standards Organization (ISO 14000) firms are able to generate documentation that shows how they have integrated the natural environment in the manufacturing process)
Strategy 3: Ecobranding and Ecodesign
(Overall corporate environmental commitment to help brand their products as eco-friendly from a firm that is eco-friendly)
Strategy 4: Environmental Cost Leadership
(Although similar to strategy 1- eco-efficiency, the difference is that environmental cost leadership uses the cost savings in the manufacturing process not to increase the profit margin per unit but to lower the price of the goods and services)

Eco design : how to limit the environmental impact of the products at their design stage ? https://www.youtube.com/watch?v=7gTdyh8ejQw

Environmental Sustainability

Ability of an organization or country to protect the use of future resources by properly maintaining and protecting the resources that are currently being used
Three major components:
A system to ensure the sustainable management of the earth’s natural resources
The development of social and institutional structures that would support the sustainable management of the natural resources
Changes in the economic framework so it would support the sustainable management of the earth’s natural resources

Therefore, it can be concluded that the viability of all firms and the natural environment in the “long-term” is based on being a steward of sustainability

P&G Sustainability

https://www.youtube.com/watch?v=oBJyb1PGHCs&list=PLoYEFZnRs4E_mOvQBMSGHSHN75SaU_d8S&index=3

Triple Bottom Line

Developed by John Elkington
3BL – ‘People, Planet, Profit’
Focuses on the financial, social, and environmental performance of the company
Centers on the vested interests of all stakeholders instead of focusing solely on the interest of the shareholders

John Elkington is an author, advisor and serial entrepreneur. He is a world authority on corporate responsibility and sustainable development. He has written and co-authored 19 books, including the Green Consumer Guide

The triple bottom line was developed by John Elkington and refers to how firms evaluate their performance. While the traditional single bottom line of financial performance is the norm, Elkington recommends that firms also evaluate themselves based on their level of corporate social responsibility and the commitment to environmental issues. Therefore, by focusing on three sets of objectives - financial, social, and environmental, firms would not only have a much more well-rounded evaluation process, they would also help ensure that the needs of all the stakeholders are satisfied.

Taking Sustainability Exponential - John Elkington, https://www.youtube.com/watch?v=Sa2dPTFUe0U

Equator Principles

Adopted by financial institutions around the globe
Provide a means for monitoring the potentially adverse risks, both social and environmental, that come with financing projects around the globe

The Equator Principles are voluntary guidelines used by financial institutions when they evaluate a new corporate loan application. The Equator Principles try to ensure that there is not undue social and/or environmental risk with the loan application. By using the criteria established in the Equator Principles, the financial institutions are sending a message to both their existing and future customers that Equator Principles Financial Institutions will consider all environmental and social impacts before they will loan money to a corporate customer.

Ethics and Climate Change

Kyoto Treaty
Created in December 1997
Aim was to have every industrialized nation in the world involuntarily reduce the level of greenhouse gas emissions into the atmosphere by 5.2% compared with 1990 GHG emission levels
Initially not ratified because the US did not sign the agreement
Finally ratified in 2005 when Russia joined the treaty

Sustainable Development

Two Inconvenient Truths

Al Gore, former US Vice President, won an Academy Award in 2007 for his documentary ‘An Inconvenient Truth’
Focused on global warming
Luster of the Academy Award rubbed off because the Tennessee Center for Policy Research revealed that Gore’s mansion near Nashville, TN consumed more electricity in one month than the average American uses in an entire year

Climate Change as a Strategic Option

Firms whose assets are directly affected by weather patterns must plan for fundamental changes in the global climate (E.g. Natural Resources- trees, water, farmland)
Firms involved in insurance, real estate, agriculture and tourism will be impacted by shifting climate patterns

How We Can Make the World a Better Place by 2030 https://www.youtube.com/watch?v=o08ykAqLOxk

Reviewing the Concepts

Define sustainable marketing and discuss its importance.

- Socially and environmentally responsible manner; preserving the ability of future generations to meet their needs

Identify the major social criticisms of marketing

- Marketing causes high prices. Products would cost less if companies didn’t spend so much on advertising. - Retailers mark up prices too much (excessive markups). - Marketing leads to deceptive pricing, deceptive promotions, and deceptive packaging. - High pressure selling. – Unsafe products

Define consumerism and environmentalism and explain how they affect marketing strategies.

Consumer activism affects marketing strategies because marketers must always be aware of how these consumer groups might respond or react to their marketing initiatives.

Environmentalists are concerned with marketing’s effects on the environment and with the environmental costs of serving consumer needs and wants.

Describe the principles of sustainable marketing

1.Consumer-oriented marketing: view and organize marketing from the consumer’s (i.e. the market’s) point of view.

2. Customer-value marketing: put resources into marketing programs that build customer value.

3. Innovative marketing: seek real product improvements.

4. Sense-of-mission marketing: define organization’s mission in broad social terms.

5. Societal marketing: marketing decisions should consider the long-run interests of society (in addition to customer needs and company profitability).

Explain the role of ethics in marketing.

- Marketers have a code of ethics - principles that guide decision-making

- Marketers in Canada abide by the Canadian Marketing Association’s Code of Ethics and Standards of Practice.