sustainable marketing

THINK ABOUT IT Think of a product you recently bought for yourself 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? 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, 1987 Definition :- 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. Sustainability marketing’s 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. Sustainability: the ability to meet humanity’s 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. Meeting needs of consumers while preserving the ability of future generations to meet their needs Truly sustainable marketing requires a smooth-functioning marketing system in which consumers, companies, public policymakers, and others work together to ensure socially responsible and ethical marketing actions. Unfortunately, however, the marketing system doesn’t always work smoothly. 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 firm’s 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 firm’s 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 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) People, planet, profit Sustainability issue Broad 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 Societal Classification of Products Company considers: Customer’s wants and interests Company’s own requirements Society’s long-run interests Products can be classified according to their degree of immediate consumer satisfaction and long‑run consumer benefit. Deficient products, such as bad-tasting and ineffective medicine, have neither immediate appeal nor long‑run benefits. Pleasing products give high immediate satisfaction but may hurt consumers in the long run. Examples include cigarettes and junk food. Salutary products have low immediate appeal but may benefit consumers in the long run; for instance, bicycle helmets or some insurance products. Desirable products give both high immediate satisfaction and high long run benefits, such as a tasty and nutritious breakfast food. Toyota’s hybrid Prius gives both a quiet ride and fuel efficiency Desirable products :Toyota’s hybrid Prius gives both a quiet ride and fuel efficiency. GE’s Energy Smart compact fluorescent light bulb provides good lighting at the same time it gives long life and energy savings. Haworth’s Zody office chair is not only attractive and functional but also environmentally responsible. It’s 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 product’s 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 well- being 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. 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. 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 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 sustainability—as 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 company’s 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 Because not all managers have fine moral sensitivity, companies need to develop corporate marketing Ethics 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 "The social responsibility of business encompasses the economic, legal, ethical, and discretionary or (philanthropic) expectation that society has of organizations at a given point in time". Carroll, (1979)