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Sustainable Management Session 4 Product and Services – a forward view, designing in green New requirements and opportunities from Social Media Colin.

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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:

1 Sustainable 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

2 Marketing - supporting sustainable business?
Where are we going now? Marketing - supporting sustainable business? Using products and services Socialnomics? Social Media

3 Putting CSR and Sustainability into context:
How do these concepts relate to marketing? How do the concepts relate to Product and Services?

4 Corporate Responsibility and Sustainability:
Influencing factors: Globalisation Business Stakeholders Environment Ethics Responsibilities Sustainability of the planet and business!! Conflicts: profit versus the planet

5 Development of Corporate Social Responsibility
Definitions of CSR (Carroll) have reflected concerns such as: Seriously considering the impact of company actions on others The obligation of managers to protect and improve welfare and society Meeting the economic and legal responsibilities and extending beyond these obligations It is evident that by CSR practices and trends that social responsibility has both a social component and a business component

6 Friedman (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.

7 Carroll’s Pyramid - 1991 Philanthropic – desirable and discretionary
Ethics and morality – societal expectations Conformance – operations within the confines of the law Friedman – responsibility to produce goods/services for society at a profit Discretionary Ethical responsibility Legal responsibility Economic Responsibility

8 From CSR to Sustainability:
Need to differentiate between sustainability for business or the environment Or are they actually one and the same thing!!

9 Strategies for a Sustainable World
Root of the global problem lies in: Explosive population Rapid economic development in emerging economies But this is outside of the mandate and capability of any corporation However, corporations effectively control resources, technology and have global reach, and ultimately, the motivation to achieve sustainability

10 Realistic Strategies for a Sustainable World:
Stage 1: Pollution Prevention control and clean up Stage 2: Product Stewardship Minimising all environmental impacts from a product life cycle Design for the environment – recover / reuse / recycle Stage 3: Clean Technology Investing in tomorrows technologies Pollution Product Technology – can be designed in!! Sustainability Vision – is there a road map to deliver the above? - is there a Road Map

11 Sustainable 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; and the 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.

12 The Sustainability Portfolio – central role of P&S
Rate the company in each box to establish commitment, preparedness, vulnerability The Sustainability Portfolio – central role of P&S Clean Technology Is the environmental performance of our products limited by our existing competency base? Is there potential to realise major improvements through new technology Sustainability Vision Does 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 Prevention Where 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 Stewardship What 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? TOMORROW TODAY INTERNAL EXTERNAL

13 New Strategic management requirements:

14 The 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 responsible Benefactors being: Shareholders Staff Suppliers The economy The planet Society

15 How can money be generated?
Operational responsibilities: Positive commercial reputation consumer behaviour – brand value, hence sales increases Share price – driven by sales /profits HR reputation – attracting and retaining staff Supply chain relationships Input cost control and carbon replacement Can be defined and measured Citizenship responsibilities: Positive social reputation Environmental stewardship Education Community projects Philanthropic ventures Not easy to define or measure, but is likely to feed commercial reputation Has become a ‘requirement’ of global companies

16 The triple bottom line:
PEOPLE PLANET PROFIT No longer a set of conflicts but a corporate requirement Good examples: Unilever Ikea Timberland BP!!!! Bad example: BAT Where does Veolia fit in?

17 And finally what can you do?
The Three Secrets of Green Business – unlocking competitive advantage in a low carbon economy – Gareth Kane 3 Secrets – understand the business case / what to do / how to do it Preparation – culture of change / environmental management systems / measures / communication Small steps – mostly internal to company Huge Leaps – cleaner production / design it in / renewables / service synergies / industry symbiosis

18 CSR – Sustainability models
Unilever Unilever Living Plan November 2010 Marks and Spencer M&S Plan A January 2007 High consumer focus © Imperial College Business School

19 Mini caselet:

20 Ikea: founder Ingvar Kamprad

21 Ikea - history The Ikea Business Model
1943 – 1972 domestic business constrained by the size of the Swedish market space – very much Red Ocean international / global expansion Development of 5 components of distinction Move into the Blue Ocean Articulation of The Environmental Agenda 2000 – 2009 Move into Green Space And still a family business!! – long term view

22 Ikea: driven by product and service
Five Components of Distinction Design, function, and quality at low prices Unique (Scandinavian ) design Inspiration, ideas and complete solutions Everything in one place “A day out” the shopping experience The distinctions above move the company into the Blue Ocean – Uncontested Market Space and making the Competition Irrelevant

23 The environmental agenda:
Based on the company culture – family owned Creating belonging and fellowship Bringing employees together Inspiring allegiance to the company The Environmental Agenda built on: Ikea code of conduct (IWAY) Forestry Raw materials Climate change Towards responsible sourcing Charity focus A sustainable business

24 Ikea: you will always find me in the kitchen at parties


26 Living in a world of global consumer brands:
UK, Europe, USA and the World are dominated by global brands / products We have become global consumers National cultures and identities have lost ground to global marketing imagery - brands Is this driven by the consumer or is it driven by corporate cost / profit advantage? Global customers have increasing voice

27 Corporate Social Responsibility brand initiatives
Emergence of Brands (products and services) which are known for: Ethical marketing – a balance of consumer information versus advertising messages Products produced from sustainable resources Environmentally friendly Fair trade practices Supporting the 3 R’s – recycling / replacement / reuse Putting investment back into society and the environment

28 The Digital Economy

29 Big Digital Economy Brands:
Top 4 brand digital led – Google / IBM / Apple / Microsoft Apple $182BN Google $114Bn China Mobile $65 Bn eBay $10 Bn Facebook $20 Bn youTube $20 Bn None in the top 50 brands 3 years ago!!!

30 Digital and Interactive Marketing
Broad definitions: Digital – binary code used to process/transfer information using computers / communication networks Digital Business – any business where core processes are dependent on ICT Digital 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 formats The internet and mobile platforms are particularly suitable for interaction with the customer Shift of influence and power from the marketer to the customer

31 Implications for products and services:

32 Big trends: Social networking Facebook youTube Twitter Blogs
Socialnomics – Erik Qualman

33 Why 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.

34 Marketing for MOST: Module 10- IT and Marketing
Internet World Population: 2.4 billion in June 2012 Source: Internet World Stats

35 Some worldwide figures
Everyday more than 2 billions search queries are carried out on Google On September 30th Facebook has registered its 1 billion user, everyday more than 50% of Facebook users connects to the social network Smartphones being used worldwide surpassed one billion units in the third quarter of 2012 Twitter 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.

36 Media 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 fragmentation Multi-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

37 Media 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 multitask Ofcom believes that in Britain approximately one fifth of media time is "simultaneous" consumption.

38 The 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 tablet The number of smartphones in use worldwide surpassed the 1 billion-unit mark in the third quarter of 2012 Smartphone penetration in Europe: UK: 53%, France: 43%, Germany: 40%, Italy: 47.4% In China's biggest cities, smartphone penetration is approaching 50%

39 Mobile got Smart

40 Personal Portable Always on Paying Always available Monitoring
Mobile marketing Personal Portable Always on Paying Always available Monitoring

41 Personal marketing – Mobile revolution
The most personal device - Nobody shares a mobile phone For marketers this means: Relevance is key – don’t be intrusive Personal sphere is important for your customer Individual platform for products and services Individual targeting of product and service offerings Messages are usually read in real-time In the UK, research shows that smartphones users look at their phone almost 200 hundred times a day!

42 Paying Mobile payments Mobile banking M-Commerce e-wallet
Implications for a service driven company – closeness with the consumer

43 Always available For instance, people often take pictures just out of impulse – Excellent if you need your customers to help for a creative campaign – viral marketing They are there when people feels an impulse to buy something and can facilitate the purchase immediately

44 Monitoring Each mobile phone transaction can be traced – it corresponds to a single user with a distinct number Data are crucial to profile and segment a target Campaign results can also be accurately measured Data tracked speak about users’ behaviours and lifestyles: this also provides information on their social context This rich data can also be used to design new services and products

45 Implications for Veolia:
Delivery of service product Physical product information Account handling Customer services Alerts Corporate communications Rebuilding the communications platform with the consumer

46 Veolia in the 21st Century!!

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