Chapter 16: Sustainable Marketing

What are the guidelines in the American Marketing Association's code of ethics?

Do no harm- Consciously avoiding harmful actions or omissions by embodying high ethical standards and adhering to all applicable laws and regulations Foster trust in the marketing system- Striving for good faith and fair dealing so as to contribute toward the efficacy of the exchange process as well as avoiding deception in product design, pricing, communication, and delivery or distribution Embrace ethical values- Building relationships and enhancing consumer confidence in the integrity of marketing by affirming these core values: honesty, responsibility, fairness, respect, transparency, and citizenship

Desirable Products

Products that give both high immediate satisfaction and high long-run benefits Ex: Tasty and nutritious breakfast food

Pleasing Product

Products that give high immediate satisfaction but may hurt consumers in the long run Ex: Cigarettes and junk food

Salutary Products

Products that have low immediate appeal but may benefit consumers in the long run Ex: Bicycle helmets

Deficient Product

Products that have neither immediate appeal nor long-run benefits Ex: Bad-tasting and ineffective medicine

Sense-of-Mission Marketing

A company should define its mission in broad social terms rather than narrow product terms Ex: Pedigree makes good dog food, but at its core, the brand is about loving and caring for dogs

Societal Marketing

A company should make marketing decisions by considering consumers' wants, the company's requirements, consumers' long-run interests, and society's long-run interests

Customer Value Marketing

A company should put most of its resources into customer value- building marketing investments Instead of using sales that would raise sales in the short run but add less value, companies should focus on building long-run consumer engagement and loyalty

Innovative Marketing

A company should seek real product and marketing investments The company that overlooks news and better ways to do new things will eventually lose customer to another company that has found a better way

Consumer-Oriented Marketing

A company should view and organize its marketing activities from the consumer's point of view

Environmental Sustainability

A management approach that involves developing strategies that both sustain the environment and produce profits for the company Most companies have accepted this for the customer's well-being, the company's well-being, and the planet's environmental future

What are some criticisms people have about how company's marketing practices can affect competition?

Acquisitions of Competitors- Critics claim competition is reduced when companies expand by acquiring competitors rather than by developing their own new products Marketing Practices that Create a Barrier to Entry Competitive Marketing Practices- Some practices are actually made with the intention of hurting other firms; it is difficult to differentiate predatory practices from competitive strategies and tactics

Greening Activities

Activities that pay off for the firm and the environment in the short run

Beyond Greening Activities

Activities that will pay off for the firm and the environment in the longer term

Consumerism

An organized movement of citizens and government agencies designed to improve the rights and power of buyers in relation to sellers

Environmentalism

An organized movement of concerned citizens, businesses, and government agencies designed to protect and improve people's current and future living environment

What are marketer's response to criticisms about poor service to disadvantaged customers?

Better marketing systems must be built to service disadvantaged customers. In cases marketers do not step in to fill the void, the government likely will

Corporate Marketing Ethics Policies

Broad guidelines that everyone in the organization must follow because not all managers have fine moral sensitivity These policies should cover distributor relations, advertising standards, customer service, pricing, product development, and general ethics standards

What are some criticisms about marketing pertaining to social goods?

Business has been accused of overselling private goods at the expense of public goods. As private goods increase, they require more public services that are usually not forthcoming. Ex: Private automobile ownership (private good) requires highways, traffic control, parking spaces, and police services (public goods.) The overselling of private goods results in social costs. For cars, social costs can include traffic congestion, gasoline shortages, and air pollution

Sustainable Marketing

Calls for socially and environmentally responsible actions that meet the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs

Societal Classification of Products Table

Companies should try to turn all of their products into desirable products

Environmental Sustainability and Sustainable Value Table

Companies should work at developing all four dimensions

What are some criticisms about planned obsolescence in marketing?

Companies who practice planned obsolescence cause their products to become obsolete before they actually should need replacement. They accuse some producers of using materials and components that will break, wear, rust, or rot sooner than they should Perceived obsolescence is continually changing consumer concepts of acceptable styles to encourage more and earlier buying. Ex: Fast-fashion industry Others are accused of introducing planned streams of new products that make older models obsolete, turning consumers into "serial replacers." Ex: The electronics industry

What are the five sustainable marketing principles?

Consumer-Oriented Marketing Customer Value Marketing Innovative Marketing Sense-of-Mission Marketing Societal Marketing

What are some of the "evils" marketing has been accused of adding in American society?

Creating too much materialism Creating too few social goods Creating cultural pollution

What are some social criticisms of marketing?

Critics claim that certain marketing practices hurt individual consumers, society as a whole, and other business firms

What are some criticisms about poor service to disadvantaged customers in marketing?

Critics claim that the urban poor often have to shop in smaller store that carry inferior goods and charge higher prices. They also accuse major chain retailers of redlining, drawing a red line around disadvantaged neighborhoods and avoiding placing stores there. Ex: Many low-income consumers find themselves in "food deserts"

What are some criticisms about materialism in marketing?

Critics claim the marketing system urges too much interest in material possessions, and that America's obsessions with worldly possessions is not sustainable. They think this interest in material things was created as a matter of false wants by marketing

What are some criticisms about marketing pertaining to cultural pollution?

Critics feel our sense are being constantly assaulted by marketing and advertising Ex: Commercials interrupt serious programs

Why do critics believe the marketing system causes higher prices?

Critics point to three factors- high costs of distribution, high costs of advertising and promotion costs, and excessive markups They believe that greedy marketing channel members mark up prices beyond the value of their services They also believe marketing pushes up prices to finance unneeded advertising, sales promotion, and packaging. Ex: A heavily promoted national brand sells for more than a virtually identical store-branded product They lastly believe that some companies mark up goods excessively. Ex: The drug industry might charge a pill for $2 when it takes 5 cents to produce

What are the three types of deceptive practices marketers are sometimes accused of practicing?

Deceptive Promotion Deceptive Packaging Deceptive Pricing

Sustainability Vision

External, Beyond Green Activity Serves as a guide to the future by showing how the company's products and services, processes, and policies must evolve and what new technologies must be developed to get there

Product Stewardship

External, Greening Activity Minimizing environmental impact through the entire life cycle Ex: IBM started a business that is designed to reuse and recycle parts from returned mainframe computers and other equipment

Deceptive Packaging

Includes exaggerating package contents through subtle design, using misleading labeling, or describing size in misleading terms

Deceptive Pricing

Includes practices such as falsely advertising "factory" or "wholesale" prices or a large price reduction from a phony high retail "list price"

Deceptive Promotion

Includes practices such as misrepresenting the product's features or performances or luring customers to the store for a bargain that is out of stock

New Clean Technology

Internal, Beyond Greening Activity Developing new sets of environmental skills and capabilities Ex: Siemens has committed to become carbon neutral by 2030 by using new technology that cuts down electricity

Pollution Prevention

Internal, Greening Activity Eliminating or reducing waste before it is created Ex: Adidas developing their Duramo shoes, which are low-waste and provide sustainability benefits

What are some problems with deceptive practices?

It has led to legislation and other consumer protection actions; the FTC also has the power to regulate "unfair or deceptive acts or practices" Despite regulations, some critics argue that deceptive claims are still common, even for well-known brands The toughest problem is defining what is "deceptive." Ex: An advertiser's claim that its chewing gum will "rock your world" isn't intended to be taken literally. Others still claim that puffery and alluring imagery can harm customers in subtle ways

How do marketers respond to criticisms about cultural pollution?

Marketers hope their ads primarily reach target audiences Because of ads, many television, online, and social media sites are free to users Today's consumers have alternatives and can pay to avoid ads

How do marketers respond to criticisms about high-pressure selling?

Marketers say they have little to gain from high-pressure selling. Although such tactics may work in one-time selling situations for short-term gain, most selling involves building long-term relationships with valued customers

What are some criticisms about high-pressure selling?

Salespeople are sometimes accused of high-pressure selling that persuades people to buy goods that they had no thought of buying. Salespeople are trained to deliver smooth, canned talks to entice purchases

What is an example of a harmful product?

The CPSI accuses beverage companies of behaving much like the tobacco industry, marketing their harmful products to countries already struggling to provide health care to their citizens

How do marketers respond to criticism about high prices?

They argue higher prices reflect services customers want that need to be accomplished through intermediaries, like more convenience, larger stores and assortments, return privileges, etc. They argue that advertising adds value by informing potential buyers of the availability and merits of the brand They argue that consumers don't understand the reasons for high markups. Ex: Pharmaceutical markups help cover the costs of making and distributing existing medicines

How to marketers respond to criticisms about deceptive practices?

They argue that companies avoid this because it can harm a company's business in the long run, which isn't sustainable. Profitable relationships are built on a foundation of value and trust. They argue that consumers also usually protect themselves from deception

What else can companies do to develop integrity?

They can develop programs to teach managers about important ethical issues and help them find the proper responses They hold ethics workshops and seminars They can establish their own codes of ethical conduct

How do marketers respond to criticisms about materialism?

They claim people have strong defenses against advertising and other marketing tools. Marketers are most effective when they appeal to existing wants rather than when they attempt to create new ones. They also say our wants and values are influenced by family, peer groups, religion, cultural background, and education

What are some criticisms people have about consumerism?

They feel that the buyer has too little information, education, and protection to make wise decisions when facing sophisticated sellers. Consumer advocates call for additional consumer rights

What are some criticisms of marketing's impact on individual consumers?

They have accused marketing of harming consumers through high prices, deceptive practices, high-pressure selling, shoddy or unsafe products, planned obsolescence, and poor service to disadvantaged consumers

How has McDonald's made their marketing strategy more sustainable?

They have made a more sustainable strategy of diversifying into salads, fruits, grilled chicken, and other healthy food. They have also addressed environmental issues by calling for food-supply sustainability, reuse and recycling, and more responsible store designs.

What is marketer's response to criticisms about planned obsolescence?

They respond that consumers like style changes; they want the latest high-tech innovations, even if older models still work. No one has to buy a new product. Most companies also do not design their products to break down earlier because they do not want to lose consumers to other brands

How do marketers respond to criticisms about harmful products?

They say most manufacturers want to produce quality goods; if they sell poor-quality or unsafe products they risk damaging conflicts with consumer groups and regulators. Consumers who are unhappy with a firm's products may avoid future purchases. Marketers also know that good quality results in customer value and satisfaction, which in turn create sustainable customer relationships

What are some criticisms about shoddy, harmful, or unsafe products?

Too often, products and services are not made well or do not perform well It also concerns product safety Many products deliver little benefit or may even be harmful

What are some actions that have been enforced by the government to protect consumerism?

Truth in Lending- The true interest on a loan Unit Pricing- The true cost per unit of a brand Ingredient Labeling- The ingredients in a product Nutritional Labeling- The nutritional value of foods Open Dating- Product freshness Truth in Advertising- The true benefits of a product