SUSTAINABILITY MARKETING

EXECUTIVE SUMMARY
This essay discusses the concept of Sustainability Marketing and how marketing can contribute significantly towards the sustainable development. In order to develop such framework for sustainability as a marketing strategy, we identify the challenges of the conventional marketing approach . The concepts of marketing strategy and sustainability have been defined and how these two concepts interact has been analyzed. This in turn this essay will help us to understand sustainability as a tool for competitive advantage' and how it can be an effective guide for sustainable marketing.

TABLE OF CONTENTS
1. What is Marketing Strategy?....................................................................................................4 2. The Ambivalent Role of Marketing4 3. Evolution of Sustainable marketing....4 4. The Concept of Sustainable Marketing..4 5. Understanding Sustainable Business........5 6. Challenging the basic marketing assumptions: Impact on society?.........................................6 7. Triple bottom line (TBL)......................8 8. Sustainability Marketing Mix: 4CS for 3 PS (TBL).8 9. How can Sustainability Marketing be achieved?....................................................................11 10. The most common used excuses to ignore Sustainability by Marketers 13 11. What does Sustainability Marketing offers to a Business?.....................................................13 12. Conclusion.15 13. Bibliography.16

WHAT IS MARKETING STRATEGY?

According to (Obermiller, Burke, & Atwood, 2008), the marketing strategy aims to attain a position that is to attain the best position which is: Desirable: In order to satisfy the customers needs and wants. Distinguishable: In order to attain a competitive advantage Defensible: In order to maintain that competitive advantage

THE AMBIVALENT ROLE OF MARKETING

In the 21st century, Sustainability can be termed as one of the major marketing challenges. Marketing can make significant contributions towards the sustainable development by integration of the social and economic factors. Marketing exhibits an ambivalent character as on one hand, it imposes pressure on the social and ecological factors by promoting the materialistic lifestyles and on the other hand it creates and formulates the sustainability innovations like promoting less materialistic lifestyles, in order to contribute to the sustainable.

EVOLUTION OF SUSTAINABLE MARKETING

Peattie (2001) explains that Green Marketing can be classified in three main ages- The first age of ecological marketing in 1970s that stressed on some specific environmental problems, for example air pollution, the impact of pesticides on the environment . 1980s was the second age, marked by Environmental marketing which stressed to promote clean technology , to understand and target the green consumer, and to consider good socio-environmental performance as a foundation to gain that competitive advantage. The third age i.e. the current age is sustainable marketing which stresses on the creating sustainable development and thus creating an economy that is sustainable.

THE CONCEPT OF SUSTAINABLE MARKETING

As defined by (Kotler & Armstrong, 2012) sustainable marketing calls for socially and environmentally responsible actions that meet the present needs of consumers and businesses while preserving or enhancing the ability of future generations to meet their needs.

Source: (Kotler & Armstrong, 2012)

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Sustainability is the interweaving of environmental factors, social factors and economic factors which encompasses the key sustainability issues such as: pressure of the increasing population, the growth in the consumption of the energy, water and food, increasing globalization, global warming and changing climate due to increasing carbon emissions, depleting ozone layer. (Charter, Peattie, Ottman, & Polonsky, 2002) Fullers definition as cited by (Stead & Stead, 2004); sustainable marketing is: The process of planning, implementing and controlling the development, pricing, promotion and distribution of products in a manner that satisfies the following three criteria (1) customers needs are met (2) organization goals are attained; and (3) the process is compatible with ecosystems.

UNDERSTANDING SUSTAINABLE BUSINESS

Sustainability within a business recognizes an entitys relationship with the system in which the entity exists. These could include the social, economic, environmental, and institutional effects. Thus, a business is sustainable if it operates in a way which does not degrade the larger system by fulfilling the criteria of economic viability and environmental maintenance. (Obermiller, Burke, & Atwood, 2008)

Source: (www.sustainablebiz.ne)

Some of the principles of sustainability as identified by Hargroves and Smith (Hargroves, 2005) are: Value and appreciation for nature; Integration of social, economic and environmental goals in planning (triple bottom line); Protection of biodiversity; Concern for the global effects and fairness to the future generations Ensuring best practices; no loss of natural or human resources; constant improvement; Excellent governance.

CHALLENGING THE BASIC MARKETING ASSUMPTIONS: IMPACT ON SOCIETY?

(Belz & Peattie, 2012) have challenged the basic beliefs and assumptions of the marketing principles in the light of sustainability by proposing a values driven approach towards sustainability marketing as against the amoral view of the conventional marketing techniques. (Kotler & Armstrong, 2012) explains that some marketing practices of not only harm the society but also the customers and other businesses.

Source: (Peirce & Madden)

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1. Who pays the Social and environmental costs? The price which consumers pay excludes the costs such as: social and environmental costs of production, disposal of the products etc. Moreover, these costs are considered as externalities and are assumed to be met by the society. The marketers today are unable to consider the monetary value of the beautiful landscape and the vast environmental resources. They fail to acknowledge the irreversible processes. Thus, the internalization of these costs could be a significant step towards sustainable development. 2. Customer is the King? The customer choice and the Consumer sovereignty have always been sacred to the Marketers with respect to who are the customers, what they want, what they buy, how much they want to pay. Conventional guide to the marketing strategies assumes thats the customer is faced with the complete information. However this assumption is flawed as the information provided about the goods is often misleading and incomplete. The Companies are incapable of providing the right balance of the social and environmental outcomes of the products. Moreover, the freedom to consume the goods requires to be balanced with the non-consumers rights. For example: Smokers regard smoking as their right, but they fail to acknowledge the equal right of a non smoker to breathe pollution free air. 3. Are the needs satisfied? According to (Kotler & Armstrong, 2012) marketing aims to create false desires that are beneficial for the industry much more than the customer itself. Moreover, marketing creates an unsustainable world by promoting overconsumption and materialistic way of living. Even if the consumer earns and consumes more doesnt imply that they are happy which leads us to conclude that only some part of our consumption satisfies our needs positively. The companies today fail to meet the needs of the present which includes both rich and poor. Sustainability marketing seeks to generate opportunities for the poor by including them within the markets through new pricing models and innovative products and help these poor to consume more and to lead a life which satiates their basic needs. 4. The Natures Peripheral Nature: The conventional marketing model explains the constituents of the macro environment as social, economic, technological factors which influences the marketers marketing strategies while ignoring the Physical environment. It is this physical environment which underpins these constituents of the macro environment. The sustainability marketing paradigm bases itself on the natural environment which aims at reducing the negative impacts of the goods on the

environment .The sustainability marketing assumes that the nature is vulnerable and fragile and it needs to be preserved with a view to attain sustainable development.
TRIPLE BOTTOM LINE (TBL)

According to (Henriques & Richardson, 2004), Triple Bottom line agenda focuses corporations not just on the economic value that they add, but also on the social value that they add or destroy. The three factors, along which TBL functions towards the goal of sustainability, as described by John Ellington 1995, are People, Planet, and Profit. Thus, its imperative that the Marketers must develop a marketing strategy on the line of the TBL factors.

Source: (www.triplepundit.com)

SUSTAINABILITY MARKETING MIX : 4CS FOR 3 PS(TBL)

Source: (http://www.customfitonline.com) The four P model as suggested by McCarthys (1960) of Product, Place, Price and Promotion has been criticized by many marketers on the fact that this model is too producer centric and neglects the significant factor of marketing discipline i.e. Customer orientation .Shaw, Jones(2005).
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Also, Silverman,(1995) considers that McCarthys model ignored the broad range of stakeholders view and only acknowledged the end users expectations. Thus, a more customer oriented marketing mix needs to be developed which integrates not only the customers expectations but also the stakeholders view at large. Further, harmonizing this model with the 3 Ps of TBL as suggested above would help the firm to contribute significantly towards the sustainability. The 4Cs model as suggested by (Belz F. M., 2005) as been described below:

1. Customer Solution: The 4Cs model overlooks the conventional marketing approach of creating a product and then selling it to the mass, and focuses on the customer wants and develop a product as a solution to their wants and needs. From the perspective of sustainability, the product must address both, the ecological/social problems and off course, customer problems. The six significant characteristics to develop such product are: customer satisfaction, dual focus in terms of social and ecological factors, product life cycle orientation, significant improvements, continuous improvements, competing offers. 2. Customer Cost: Price usually takes in to account the producers effort only and ignores the customers perspective. The total customer concept suggested by the 4Cs model takes into account the all financial and the non financial costs (time, effort etc) through all the stages of the consumption process. From the sustainability perspective, it also considers, lifetime costs like deteriorating costs of assets like car, mobile phone etc. 3. Convenience: Convenience is the key value in a distribution process and the firms must put their efforts in making the products/services widely available and making them easily available, for e.g. Via: 24/7 superstores. 4. Communication: The communication factor plays a significant role in the marketing mix. From the perspective of sustainability, it is imperative to communicate the sustainability solutions in order to make the customer aware of sustainability objectives and developing a long term relationship with their customers. One such tool for an effective communication could be CSR report which highlights the sustainability approaches of an organization in providing the customer products and services and their significant milestones in contributing towards the sustainable development.

Source: (http://www.csreurope.org) 10

HOW CAN SUSTAINABILITY MARKETING BE ACHIEVED ?

As described by (Belz, 2005), sustainability can be described as a six step process, (as shown in the figure below) listed as: 1. Analyzing the social and the ecological problems: The conventional marketing approach, does not take the ecological and social issues into serious consideration. Moreover, the natural environment is examined as an element of macro environment of the organization. The impact of the increasing population on the environment can be analyzed by the formula given by Ehrlich,Holdren(1971) as follows: IMPACT: POPULATION x AFFLUENCE x TECHNOLOGY In order to study the social and ecological issues, it is imperative that the whole product life cycle from its development stage until its decline be examined (Kotler/Armstrong 2004, p. 330-337) while including processes such as production , extracting raw materials , distribution , producing final products , reusing and recycling of the products.

Source: (Belz, 2005) 2. Analyzing the customer behavior with respect to the socio- ecological factors: Sustainability marketing attempts to resolve the socio-ecological issues while meeting the demand of the consumers at the same time. Finding solution to the key questions as stated below will enable the marketers to market while fulfilling the sustainability needs of the environment. What type of socio-ecological issues would influence the consumer demand, which would not and why? How does the consumer perceive the socio- ecological issues?
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3. Developing sustainability visions and social and ecological marketing goals: An organizations CSR reports, principles and guidelines are significant normative foundations in order to achieve the sustainability marketing approach. CSR reports talk about the firms attempt to improve and protect the environment by adopting a greener way of disposing the production waste or by recycling the paper used as stationery and so on. For example: As per the CSR report of the Swedish Company IKEA , explains how it has contributed towards the sustainable development and it believes that what is good for society is good for us, (IKEA, 2011). The report also explains the companys future sustainability goals for the next three years highlighting the firms key objectives and to offer a range of environmental friendly products. 4. Developing the sustainability marketing strategy: This step involves strategizing the sustainability STP of the firm (segmenting, targeting and positioning) for its market. This process involves discovering the USP ( unique sustainable proposition of the firms product ,deciding among various sustainability innovations and finding the target segment of these innovation and develop and understanding how customers play a significant role in development of the sustainable products. Apart from the positioning, this step involves deciding on the optimal time to place these innovations in to the market and evaluating the advantages of an early market entry. 5. Inter-wining the social and ecological factors with the Marketing mix : The classic marketing mix comprises of the four Ps i.e. product, place, price and promotion; these only take the sellers point of view while ignoring the customers view point. In the age of sustainable development and by incorporating the customers view, developing a sustainability marketing mix with four Cs i.e. Customer cost, Customer solution, Convenience and Communication. (Please refer to the sustainability marketing mix as explained further in the essay.) 6. Contributing in the sustainability marketing transformations: The present institutional set up allows only a limited scope for marketing the sustainable products; rather it encourages the unsustainable behavior. Thus, it is important to bring about changes in this framework and to create viable conditions to market the sustainable goods beyond the market niches. This requires an active participation by the companies in political processes and public, for example CSR (corporate social responsibility) has proved to be an effective way to link your company with sustainability marketing.

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THE MOST COMMON USED EXCUSES TO IGNORE SUSTAINABILITY BY MARKETERS

As explained by (http://www.csreurope.org), Marketers generally sideline the concept of sustainability: Who has the time for sustainability? Who am I, if customers want the product? My job is not to save the planet but sell the product! Its the governments headache to clean up environment, not mine! Less Packaging will only increase my costs!

WHAT DOES SUSTAINABILITY MARKETING OFFERS TO A BUSINESS?

1. DIFFERENTIATION: Sustainability marketing aids in differentiating a firms products not just by leveraging off the healthy characteristics of the product but also its environmental benefits. To share an example: In order to undertake health oriented farming for its products, the company Danone has collaborated with a European association Bleu Blanc Coeur. They add Flax to the cows feed which not only helps to increase the cows yields and fertility but also the milk then produced by these cows provide enhanced health benefits to the customers. 2. DRIVE CREATIVITY AND INNOVATION/ LEVER OF COMPETIVE ADVANTAGE: The concept of sustainable development can be used by the marketers as a lever of innovation. Marketers have claimed that there have been evidences that prove that environmental or social aspects aid to differentiate the products offered by a firm and to create a lucrative niche. For example: Toyota used celeb endorsements for promoting the environmental benefits of Prius, its hybrid fuel. The niche companies such as suppliers of the organic products and fair trade coffee have tried to address the social and ecological concerns of the consumers by making use of the eco-labels to build the consumer understanding of the products. However, it might not be the best approach to directly endorse your brand with sustainability attributes if they do not integrate well with the values of the company 3. NEW OPPORTUNITIES/ MITIGATE THE RISKS: The American Businessman and philanthropist, Warren Buffet has to say It takes 20 years to build reputation and five minutes to ruin it. Many customers are shocked to learn that the worlds largest retailer, Wal-Mart has been criticized for unfair social practices, ranging from destruction of small communities to unjust labor practices. But only few know that Wal-Mart has been working for the cause of sustainable
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development and has been the worlds largest crusader for this cause. CSR (corporate social responsibility) helps to recognize the major environmental and social risk for the organization. It also helps to mitigate these risks by providing new opportunities and effectively communicating them to the stakeholders in a sustainable way. (Kotler & Armstrong, 2012) 4. HELPS TO SAVE COSTS: Organizations can save bundles of costs by adhering to sustainable ways of conducting the business. Such as : making use of the technology and less of paper can help them not only cut down on costs but also help maintaining the ecological balance by saving trees. To share an example: Nokias collaboration with O2 has helped them save 23% of paper weight, 98% increase in deliver time , reduced carbon emissions and avoidance of production of the charging units. 5. ENHANCING CUSTOMERS BRAND LOYALTY: An eco-friendly brand has significant influence on the customers buying decision and also helps an organization in augmenting its sales. Providing the customers with a brand which comes with added benefits such as energy saving factors helps a firm not only to step towards sustainable development but also create a brand most desired by the customers. For example: The new Ariel offered by P&G was a new icon for sustainable innovation as it allowed the customers to wash their laundry at lower temperatures leading to lower energy consumption. According to the various researches worldwide , the customers (in terms of businesses, direct customers or public sector firms) tend to favor those firms that are more environmentally and socially responsible. 6. BUILD ATTRACTION FOR INVESTMENTS: The sustainability marketing approach helps the firm to build a stronger brand by attracting various investment options and collaborations to create innovative and creative products. For example: Coca- Cola Austria in 2006 came up with a fifteen million Euros partnership in collaboration with its other industrial partners to build Austrias first bottle recycle plant. 7. EMPLOYEE MOTIVATION AND EMPLOYEE RETENTION To be associated with a company which offers environmental friendly products makes the employee feel proud of their employer. It also motivates them to also become part the firms sustainability initiative. BT Company claims that 66% of its employees say that the corporate social responsibility initiatives of the company make them feel proud to be associated with BT.

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CONCLUSION:
Director of Corporate Responsibility (BT), Adrian Hosford says, Companies whose brands rightly become synonymous with sustainability will be the ultimate winners. By committing to the sustainability agenda, customers will soon learn to trust your brand and realize that youll do the right thing by society and the environment on their behalf. Thats when you can offer customers something truly valuable and youll be rewarded through their loyalty; Thus, Sustainable Marketing reframes the conventional marketing principles and acknowledges the modern day customer centric marketing objectives and ultimately harmonizing this approach with the social and the ecological factors while stepping towards the Sustainable development.

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BIBLIOGRAPHY
1. Belz, F. M. (2005). Sustainability Marketing. Freising: Technische Universitt Mnchen. 2. Belz, F. -M., & Peattie, K. (2012). Sustainability MArketing:A global Perspective. Cornwall, United Kingdom: Wiley. 3. Charter, M., Peattie, K., Ottman, J., & Polonsky, M. (2002, April). smart-know-net. Retrieved November 24, 2012, from http://www.cfsd.org.uk: http://www.cfsd.org.uk/smart-know-net/smartknow-net.pdf 4. Donald Fuller, Sustainable Marketing, Managerial-Ecological Issues, 1999 5. Ehrlich, p.r./holdren, J.P. (1971): Global Ecology: Readings towards a Rational Strategy for Man, Hartcourt, Australia 6. Hargroves, K. and Smith, M. (Eds.), The Natural Advantage of Nations: Business Opportunities, Innovation and Governance in the 21stCentury. Earthscan/James & James, USA, 2005. 7. Henriques, A., & Richardson, J. (2004). The Triple Bottom Line: does it all add up. London: Earthscan. 8. IKEA. (2011, September 30). About ikea. Retrieved 2012 25, 2011, from http://www.ikea.com: http://www.ikea.com/ms/en_US/about_ikea/pdf/sustainability_report_fy11.pdf 9. Kotler, P., & Armstrong, G. (2012). Principles of Marketing. New Jersey: Prentice Hall 10. Kotler, Philip/ Armstrong, Gary (2004): Principles of Marketing, 10th edition, New Jersey. 11. McCarthy, E. J. (1964): Basic Marketing, Homewood, Illinois. 12. Obermiller, C., Burke, C., & Atwood, A. (2008). Sustainable business as marketing strategy. Innovative Marketing , IV (3). 13. Peattie, K. (2001). Towards sustainability: The third age of green marketing. The Marketing Review, 2(2),129146 14. Peirce, M., & Madden, K. (n.d.). Media. Retrieved November 25, 2012, from http://www.cpsl.cam.ac.uk: www.cpsl.cam.ac.uk/~/media/Files/.../Marketing_briefing.ashx 15. Shaw, E./Jones, D. G. B. (2005): A History of Schools of Marketing Thought, in: Marketing Theory, 5, 3, pp. 239-281. 16. Schultz, D. E., Tannenbaum, S. I., & Lauterborn, R. F., (1993). Integrated marketing communications. Chicago: NTC Business Books. 17. Silverman, S. N. (1995): An Historical Review and Modern Assessment of the Marketing Mix sConcept, in: Rassuli, K./Hollander, S. C./Nevett, T. R. (Eds.): Proceedings of the 7th Conference on Historical Research in Marketing, Fort Wayne, Indiana, pp.25-35. 18. Stead, W., & Stead, J. (2004). Sustainable strategic management. New York: M.E Sharpe, Inc. 19. (n.d.). Retrieved December 10, 2012, from www.sustainablebiz.ne: http://www.sustainablebiz.net/company.php 20. (n.d.). Retrieved from http://www.csreurope.org: http://www.csreurope.org/data/files/sustainablemarketingguide.pdf 21. (n.d.). Retrieved from http://www.customfitonline.com: http://www.customfitonline.com/news/2012/10/19/4-cs-versus-the-4-ps-of-marketing/ 22. (n.d.). Retrieved from www.triplepundit.com.

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