Presentation on theme: "Sustainable Management Session 4 Product and Services – a forward view, designing in green New requirements and opportunities from Social Media Colin."— Presentation transcript:
1Sustainable Management Session 4 Product and Services – a forward view, designing in green New requirements and opportunities from Social Media Colin Love Director MSc Strategic Marketing
2Marketing - supporting sustainable business? Where are we going now?Marketing - supporting sustainable business?Using products and servicesSocialnomics?Social Media
3Putting CSR and Sustainability into context: How do these concepts relate to marketing?How do the concepts relate to Product and Services?
4Corporate Responsibility and Sustainability: Influencing factors:GlobalisationBusinessStakeholdersEnvironmentEthicsResponsibilitiesSustainability of the planet and business!!Conflicts: profit versus the planet
5Development of Corporate Social Responsibility Definitions of CSR (Carroll) have reflected concerns such as:Seriously considering the impact of company actions on othersThe obligation of managers to protect and improve welfare and societyMeeting the economic and legal responsibilities and extending beyond these obligationsIt is evident that by CSR practices and trends that social responsibility has both a social component and a business component
6Friedman (Chicago School) view of Corporate Social Responsibility Managers/corporations should maximize profits while conforming to the basic rules of society.Shareholders are the principals, managers are their agents in the pursuit of profit max. and max. shareholder wealth.Profits represent the net contribution that the firm makes to the social good.Managers representing shareholders and profit maximizing also act in best interest of society.Managers using corporate resources to promote social objectives in fact would be undemocratic.
7Carroll’s Pyramid - 1991 Philanthropic – desirable and discretionary Ethics and morality – societal expectationsConformance – operations within the confines of the lawFriedman – responsibility to produce goods/services for society at a profitDiscretionaryEthical responsibilityLegal responsibilityEconomic Responsibility
8From CSR to Sustainability: Need to differentiate between sustainability for business or the environmentOr are they actually one and the same thing!!
9Strategies for a Sustainable World Root of the global problem lies in:Explosive populationRapid economic development in emerging economiesBut this is outside of the mandate and capability of any corporationHowever, corporations effectively control resources, technology and have global reach, and ultimately, the motivation to achieve sustainability
10Realistic Strategies for a Sustainable World: Stage 1: Pollution Preventioncontrol and clean upStage 2: Product StewardshipMinimising all environmental impacts from a product life cycleDesign for the environment – recover / reuse / recycleStage 3: Clean TechnologyInvesting in tomorrows technologiesPollution Product Technology – can be designed in!!Sustainability Vision – is there a road map to deliver the above?- is there a Road Map
11Sustainable Development: “is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.“the concept of 'needs', in particular the essential needs of the world's poor, to which overriding priority should be given; andthe idea of limitations imposed by the state of technology and social organization on the environment's ability to meet present and future needs.Our Common Future, United Nations World Commission on Environment and Development (WCED),1987.
12The Sustainability Portfolio – central role of P&S Rate the company in each box to establish commitment, preparedness, vulnerabilityThe Sustainability Portfolio – central role of P&SClean TechnologyIs the environmental performance of our products limited by our existing competency base?Is there potential to realise major improvements through new technologySustainability VisionDoes our corporate vision direct us toward the solution of social and environmental problems?Does our vision guide the development of new technologies, markets, products and processes?Pollution PreventionWhere are the most significant waste and emission streams from our current operations?Can we lower costs and risks by eliminating waste at source or by using it as an input?Product StewardshipWhat are the implications for product design and development if we assume responsibility for a products entire life cycle?Can we value or lower costs while simultaneously reducing the impact of our products?TOMORROWTODAYINTERNAL EXTERNAL
14The big question: how do we make money? There is a growing body of evidence to suggest that ethical practices build sustainable businesses which are corporately responsibleBenefactors being:ShareholdersStaffSuppliersThe economyThe planetSociety
15How can money be generated? Operational responsibilities:Positive commercial reputationconsumer behaviour – brand value, hence sales increasesShare price – driven by sales /profitsHR reputation – attracting and retaining staffSupply chain relationshipsInput cost control and carbon replacementCan be defined and measuredCitizenship responsibilities:Positive social reputationEnvironmental stewardshipEducationCommunity projectsPhilanthropic venturesNot easy to define or measure, but is likely to feed commercial reputationHas become a ‘requirement’ of global companies
16The triple bottom line: PEOPLEPLANETPROFITNo longer a set of conflicts but a corporate requirementGood examples:UnileverIkeaTimberlandBP!!!!Bad example:BATWhere does Veolia fit in?
17And finally what can you do? The Three Secrets of Green Business – unlocking competitive advantage in a low carbon economy – Gareth Kane3 Secrets – understand the business case / what to do / how to do itPreparation – culture of change / environmental management systems / measures / communicationSmall steps – mostly internal to companyHuge Leaps – cleaner production / design it in / renewables / service synergies / industry symbiosis
21Ikea - history The Ikea Business Model 1943 – 1972 domestic business constrained by the size of the Swedish market space – very much Red Oceaninternational / global expansionDevelopment of 5 components of distinctionMove into the Blue OceanArticulation of The Environmental Agenda 2000 – 2009Move into Green SpaceAnd still a family business!! – long term view
22Ikea: driven by product and service Five Components of DistinctionDesign, function, and quality at low pricesUnique (Scandinavian ) designInspiration, ideas and complete solutionsEverything in one place“A day out” the shopping experienceThe distinctions above move the company into the Blue Ocean – Uncontested Market Space and making the Competition Irrelevant
23The environmental agenda: Based on the company culture – family ownedCreating belonging and fellowshipBringing employees togetherInspiring allegiance to the companyThe Environmental Agenda built on:Ikea code of conduct (IWAY)ForestryRaw materialsClimate changeTowards responsible sourcingCharity focusA sustainable business
24Ikea: you will always find me in the kitchen at parties
26Living in a world of global consumer brands: UK, Europe, USA and the World are dominated by global brands / productsWe have become global consumersNational cultures and identities have lost ground to global marketing imagery - brandsIs this driven by the consumer or is it driven by corporate cost / profit advantage?Global customers have increasing voice
27Corporate Social Responsibility brand initiatives Emergence of Brands (products and services) which are known for:Ethical marketing – a balance of consumer information versus advertising messagesProducts produced from sustainable resourcesEnvironmentally friendlyFair trade practicesSupporting the 3 R’s – recycling / replacement / reusePutting investment back into society and the environment
29Big Digital Economy Brands: Top 4 brand digital led – Google / IBM / Apple / MicrosoftApple $182BNGoogle $114BnChina Mobile $65 BneBay $10 BnFacebook $20 BnyouTube $20 BnNone in the top 50 brands 3 years ago!!!
30Digital and Interactive Marketing Broad definitions:Digital – binary code used to process/transfer information using computers / communication networksDigital Business – any business where core processes are dependent on ICTDigital Marketing is the promotion of brands using all forms of digital advertising channels to reach consumers. This includes Internet, Mobile and encompasses social media marketing – together with TV / Radio formatsThe internet and mobile platforms are particularly suitable for interaction with the customerShift of influence and power from the marketer to the customer
32Big trends: Social networking Facebook youTube Twitter Blogs Socialnomics – Erik Qualman
33Why digital marketing is so important? It’s a fact: the world is rapidly shifting from analogue to digital. People are consuming more and more digital content on a daily basis – on mobile phones, laptops, desktop computers at work, on tablets and iPads….Digital marketing is so important because it is not only a rapidly growing force, but it is set to be the future of marketing, while younger generations are replacing more traditional media with digital media.
34Marketing for MOST: Module 10- IT and Marketing Internet World Population: 2.4 billion in June 2012Source: Internet World Stats
35Some worldwide figures Everyday more than 2 billions search queries are carried out on GoogleOn September 30th Facebook has registered its 1 billion user, everyday more than 50% of Facebook users connects to the social networkSmartphones being used worldwide surpassed one billion units in the third quarter of 2012Twitter has reached over 500 million active users, generating over 340 million tweets daily and handling over 1.6 billion search queries per day.At the launch of iPad mini, just few weeks ago, Tim Cook has announced that Apple sold over 100 million iPads.
36Media consumption has changed Marketers face many marketing communication challenges:Decline in traditional media usage and decline in prime time viewership (especially younger generations)Increase in time spent on online and audience fragmentationMulti-consumption (many media consumed at the same time)The proliferation of mobile and portable Internet-connected devices has made TV multitasking the norm. Forrester’s researches show that about four out of five US online adults who own a laptop, smartphone, or tablet go online regularly while watching TV
37Media consumption has changed It seems that the more devices and media formats, the more content we consume.In the US recent research (Performics) show that people consume an average of 61.4 hours a week (8.8 hours a day) of content. That’s over one third of available time each week, more than half of available time, assuming eight hours of sleep.In Britain (source: Ofcom) the average media consumer's day is seven hours and five minutes. From breakfast radio to peaktime evening TV, via surfing and texting at home or at office desks, media takes up 45% of available time.The actual amount being consumed is even higher, Ofcom believes, with the boom in mobile computing helping people to multitaskOfcom believes that in Britain approximately one fifth of media time is "simultaneous" consumption.
38The Mobile “revolution” The Mobile revolution is breaking through, driven by ever-higher-performing smartphones, tablets, and other devices enabled by either WIFI or 3G and 4G networks, as well as innovative applications.Half of all U.S. adults have a mobile connection to the web through either a smartphone or tabletThe number of smartphones in use worldwide surpassed the 1 billion-unit mark in the third quarter of 2012Smartphone penetration in Europe: UK: 53%, France: 43%, Germany: 40%, Italy: 47.4%In China's biggest cities, smartphone penetration is approaching 50%
40Personal Portable Always on Paying Always available Monitoring Mobile marketingPersonalPortableAlways onPayingAlways availableMonitoring
41Personal marketing – Mobile revolution The most personal device - Nobody shares a mobile phoneFor marketers this means:Relevance is key – don’t be intrusivePersonal sphere is important for your customerIndividual platform for products and servicesIndividual targeting of product and service offeringsMessages are usually read in real-timeIn the UK, research shows that smartphones users look at their phone almost 200 hundred times a day!
42Paying Mobile payments Mobile banking M-Commerce e-wallet Implications for a service driven company – closeness with the consumer
43Always availableFor instance, people often take pictures just out of impulse –Excellent if you need your customers to help for a creative campaign – viral marketingThey are there when people feels an impulse to buy something and can facilitate the purchase immediately
44MonitoringEach mobile phone transaction can be traced – it corresponds to a single user with a distinct numberData are crucial to profile and segment a targetCampaign results can also be accurately measuredData tracked speak about users’ behaviours and lifestyles: this also provides information on their social contextThis rich data can also be used to design new services and products
45Implications for Veolia: Delivery of service productPhysical product informationAccount handlingCustomer servicesAlertsCorporate communicationsRebuilding the communications platform with the consumer