1. Sustainable Marketing Social Responsibility and Ethics
Chapter 16

2. Rest Stop: Previewing the Concepts
Define sustainable marketing and discuss its importance
Identify the major social criticisms of marketing
Define consumerism and environmentalism and explain how they affect marketing strategies

3. Rest Stop: Previewing the Concepts
Describe the principles of sustainable marketing
Explain the role of ethics in marketing

4. First Stop: Sustainability at Unilever
Under its Sustainable Living Plan, Unilever has set out to create a better future every day for people around the world
Sustainability efforts span the entire value chain
Works with final consumers to improve the social and environmental impact of its products in use
Fuels innovation, resulting in new eco-friendly products and new customer benefits

5. Sustainable Marketing
Socially and environmentally responsible marketing that:
Meets the present needs of consumers and businesses
Preserves or enhances the ability of future generations to meet their needs

6. Figure 16.1 - Sustainable Marketing
Note to Instructor: The marketing concept means meeting the current needs of both customers and the company. But that can sometimes mean compromising the future of both.
Sustainable marketing means meeting current needs in a way that preserves the rights and options of future generations of consumers and businesses.

7. Sustainable Marketing
McDonald’s “Plan to Win” addresses issues related to:
Food-supply sustainability
Sustainable packaging
Reuse and recycling
Responsible store designs
“Plan to Win” strategy has both created sustainable value for customers and positioned the company for a profitable future

8. Social 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

9. High Prices 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 private labels virtually identical non-branded or store-branded product

10. Deceptive Practices
Deceptive pricing - Falsely advertising factory or wholesale prices or large reductions from a phony high retail list price
Deceptive promotion - Misrepresenting a product’s features or performance, or luring consumers to store for out-of-stock item
Deceptive packaging - Exaggerating package contents, using misleading labeling, etc.
Note to Instructor: Deceptive practices are common even to well-known brands. Coco-Cola’s vitaminwater is marketed as a super-healthy alternative to regular H2O, but critics say the claims don’t hold water. The National Consumers League (NCL) and other consumer groups recently filed complaints with the FTC and lawsuits alleging that the brand made “dangerously misleading” claims.
Claims included:
Print ad that suggested that vitaminwater served as a viable substitute for a seasonal flu shot
A television ad that implied that vitaminwater boosts the immune system and helps fend off garden-variety sickness
Language on the label reading, “vitamins + water = all you need.”

11. Deceptive Practices
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

12. High-Pressure Selling Tactics
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

13. Shoddy or Unsafe Products
Products are not made well or services are not performed well
Products are unsafe due to manufacturer indifference, increased product complexity, and poor quality control
Products deliver little benefit or are even harmful
Note to Instructor: Most manufacturers want to produce quality goods. It's the way the company deals with product quality and safety standards that determines its reputation. Marketers should be aware that good quality creates customer value and satisfaction and in turn sustainable relationships.

14. Planned Obsolescence
Causing products to become obsolete before they actually need to be replaced
Using materials and components that will break, wear, rust, or rot sooner than they should
Holding back functional features, and introducing them later to make older models obsolete
Perceived obsolescence - continually changing consumer concepts of acceptable styles to encourage more and earlier buying
Note to Instructor: Most companies do not design their products to break down earlier because they do not want to lose customers to other brands. Instead, they seek constant improvement to ensure that products will consistently meet or exceed customer expectations. Much of the so-called planned obsolescence is the working of the competitive and technological forces in a free society—forces that lead to ever-improving goods and services. Clothing, consumer electronics, computer industries are frequently charged with perceived obsolescence. Marketers respond that consumers like style changes; they get tired of the old goods and want a new look in fashion or they want the latest high-tech innovations, even if older models still work

15. Poor Service to Disadvantaged Consumers
They are forced to shop in small stores where they pay more for inferior goods
National chain retailers practice redlining and refuse to open businesses in poor neighborhoods

16. Underserved Consumers
Lack of supermarkets in low income areas, have left many disadvantaged consumers with little or no access to healthy, affordable fresh foods

17. Marketing’s Impact on Society as a Whole
Marketing’s impact on society as a whole has been criticized in terms of:
Creating false wants and encouraging materialism
Overselling private goods at the expense of public (social) goods
Creating cultural pollution, stemming from constant exposure to marketing messages
Note to Instructor: Marketing has often been criticized for creating false wants and encouraging materialism. However, this criticism overstates the power of business and ignores consumers ability to defend themselves against advertising

18. Fuel 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?

19. Marketing’s Impact on Other Businesses
Critics charge that a firm’s marketing practices can harm other companies and reduce competition through:
Acquisitions of competitors
Marketing practices that create barriers to entry
Unfair competitive marketing practices

20. Marketing’s Impact on Other Businesses
Walmart 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

21. An organized movement of citizens and government agencies to improve the rights and power of buyers in relation to sellers
Consumerism
Note to Instructor: Consumerism is one of two major consumer actions to promote sustainable marketing.

22. Traditional Seller’s Rights
Introduce any product in any size and style, provided it is not hazardous to safety; or, if it is, to include proper warnings and controls
Charge any price for the product, provided no discrimination exists among similar kinds of buyers
Spend any amount to promote the product, provided it is not defined as unfair competition

23. Traditional Seller’s Rights
Use any product message, provided it is not misleading or dishonest in content or execution
Use any buying incentive schemes, provided they are not unfair or misleading

24. Traditional Buyers’ Rights
To not buy a product that is offered for sale
To expect the product to be safe
To expect the product to perform as claimed

25. Proposed Consumer Rights
Consumer advocates call for additional rights:
To be protected against questionable products and marketing practices
To influence products and marketing practices in ways that will improve quality of life
To consume now in a way that will preserve the world for future generations of consumers
To be informed about important aspects of the product
Note to Instructor:
Consumers have not only the right but also the responsibility to protect themselves instead of leaving this function to the government or someone else.
Consumers should also make good consumption choices, rewarding companies that act responsibly while punishing those that don’t.
Ultimately, the move from irresponsible consumption to sustainable consumption is in the hands of consumers.

26. Consumers’ Right to Information
Product labels contain information about ingredients, nutrition facts, recycling, country of origin
Jones Soda even puts customer submitted
photos on its labels

27. An organized movement of concerned citizens and government agencies to protect and improve people’s living environment
Environmentalism
Note to Instructor: Environmentalism is the second consumer action to promote sustainable marketing.

28. Environmentalism
Those who subscribe to environmentalism believe that marketing system’s goal should be to maximize quality of life
Life quality includes the quantity and quality of consumer goods and services and quality of the environment

29. Environmentalism
Is concerned with damage to the ecosystem caused by global warming, resource depletion, toxic and solid wastes, litter, etc.
Over the past several decades, such concerns have resulted in federal and state laws and regulations
In recent years, however, firms have accepted more responsibility and many have adopted a policy of environmental sustainability

30. Environmental sustainability
Management approach that involves developing strategies that both sustain the environment and produce profits for the company
Environmental sustainability

31. Figure 16.2 - The Environmental Sustainability Portfolio
Note to Instructor: The figures shows a grid that companies can use to gauge their progress toward environmental sustainability. It includes both internal and external greening activities that will pay off for the firm and environment in the short run, and beyond greening activities that will pay off in the longer term. At the most basic level, a company can practice pollution prevention. At the next level, companies can practice product stewardship—minimizing not only pollution from production and product design but also all environmental impacts throughout the full product life cycle. The beyond greening activities identified in Figure 16.2 look to the future. First, internally, companies can plan for new clean technology. To create fully sustainable strategies, they will need to develop innovative new technologies. Finally, companies can develop a sustainability vision, which shows how the company’s products and services, processes, and policies must evolve and what new technologies must be developed to get there.

32. Sustainability Efforts—Pollution Prevention
Subaru of Indiana claims that it now sends less trash to the landfill each year than the average American family

33. New Clean Technology
Many companies are adopting design for environment (DFE) and cradle-to-cradle practices
Design products that are easier to recover, reuse, recycle, or safely return to nature after usage
Coke is researching and testing new bottles made from aluminum, corn, or bioplastics

34. Marketing at Work Sustainability means: Driving out hidden costs
Conserving natural resources
Providing sustainable and affordable products so customers can save money and live better

35. Figure 16.3 - Marketing Decision Areas That May be Called into Question Under the Law
Note to Instructor: Ask students to look for examples of recent cases in which companies ran into legal trouble for any one of these issues.

36. Consumer-oriented marketing
A principle of sustainable marketing that holds a company should view and organize its marketing activities from the consumer’s point of view
Consumer-oriented marketing
Note to Instructor: A company should work hard to sense, serve, and satisfy the needs of a defined group of customers—both now and in the future. Only by seeing the world through its customers’ eyes can the company build sustainable and profitable customer relationships.

37. Customer-value marketing
A principle of sustainable marketing that holds a company should put most of its resources into customer-value-building marketing investments
Customer-value marketing
Note to Instructor: Many things marketers do—one-shot sales promotions, cosmetic product changes, direct-response advertising—may raise sales in the short run but add less value than would actual improvements in the product’s quality, features, or convenience. Enlightened marketing calls for building long-run consumer loyalty and relationships by continually improving the value consumers receive from the firm’s market offering.

38. A principle of sustainable marketing that requires a company to seek real product and marketing improvements
Innovative marketing
Note to Instructor: The company that overlooks new and better ways to do things will eventually lose customers to another company that has found a better way.

39. 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
Note to Instructor: Sense-of-mission marketing means that the company should define its mission in broad social terms rather than narrow product terms. When a company defines a social mission, employees feel better about their work and have a clearer sense of direction. Brands linked with broader missions can serve the best long-run interests of both the brand and consumers.
Sense-of-mission marketing has made Pedigree the world’s number one dog food brand

40. Marketing at Work
Ben & Jerry’s, The Body Shop, Burt’s Bees, Stonyfield Farms, Patagonia, Timberland, and TOMS Shoes pioneered the concept of values-led
Method’s mission is to inspire a happy, healthy home revolution

41. A company makes marketing decisions by considering consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long-run interests
Societal marketing

42. Figure 16.4 - Societal Classification of Products

43. Deficient products Pleasing products Salutary products
Products that have neither immediate appeal nor long-run benefits
Deficient products
Products that give high immediate satisfaction but may hurt consumers in the long run
Pleasing products
Products that have low immediate appeal but may benefit consumers in the long run
Salutary products
Products that give both high immediate satisfaction and high long-run benefits
Desirable products
Note to Instructor: Companies should try to turn all of their products into desirable products. 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.

44. Desirable Products
PepsiCo has hired a team of scientists to help it develop a larger portfolio of healthy product options, such as the Trop50 brand

45. 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

46. Business Actions Toward Sustainable Marketing
Ethics policies should cover:
Distributor relations
Advertising standards
Customer service
Pricing
Product development
General ethical standards

47. Business Actions Toward Sustainable Marketing
In solving issues on ethics and social responsibility, companies and marketing managers can rely on principles of:
The free market and legal system
Letting responsibility fall to individual companies and managers to develop a social conscience
International marketers face the challenge of varying business practices and standards across countries

48. Rest Stop: Previewing the Concepts
Define sustainable marketing and discuss its importance
Identify the major social criticisms of marketing
Define consumerism and environmentalism and explain how they affect marketing strategies

49. Rest Stop: Previewing the Concepts
Describe the principles of sustainable marketing
Explain the role of ethics in marketing

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All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Copyright © 2013 Pearson Education, Inc.
Publishing as Prentice Hall