GS MKT 306 CH 16 SOCIAL RESPONSIBILITY AND SUSTAINABILITY

More and more firms turn to social media to convince potential customers that the organization operates in a socially responsible manner.

This marketing action is in direct response to the growing number of consumers who say that what a company stands for affects what they buy.

Environmental Marketing Strategies Environmental marketing (also called green marketing) activities can be divided into three levels:

1. tactical greening, 2.quasi-strategic greening, and 3. strategic greening.

Environmental Regulation In addition to meeting consumer demand for green products, marketers must also consider new and changing environmental regulations.

Environmental regulations are the laws designed to protect the natural environment against undue harm by individuals and organizations.42 Regulations range from the 1972 Clean Water Act, which was designed to reduce industrial pollution in U.S. waters, to the Clean Air Act, which places limits on the emission of greenhouse gases.

Strategy 4: Environmental Cost Leadership Firms seeking a price premium for their environmentally friendly products often adopt an environmental cost leadership strategy. Green products sometimes cost more to produce than traditional products.

Thus a leadership strategy that also seeks to lower costs may be the only way for a company to pay for its ecological investments and generate a profit for its other stakeholders. Green and organic grocery stores, such as Whole Foods, have been able to demand a price premium for their products. This, in turn, has allowed these organizations to recover the additional costs of selling only fresh, organic products to consumers.

Corporate volunteerism is the policy or practice of employees volunteering their time or talents for charitable, educational, or other worthwhile activities, especially in the community.

Volunteer projects, such as FedEx delivering emergency medicine to disaster areas or Aetna tackling the health ailments of underserved communities, achieve maximum impact when they draw on a company's strengths.

Gina Gomez Executive Director Hispanic Community Services, Inc. As the executive director of Hispanic Community Services, Inc. (HCSI), Gomez is responsible for making sure the organization functions well from the perspectives of management, public relations, and fundraising. What has been the most important thing in making you successful at your job? I think passion for what you do is the key to success in any job. When you are passionate about what you do, you do your best and obtain the best results. I believe loving what you do is essential, not just to be a good employee but also to be satisfied with your life.

What advice would you give soon-to-be graduates? My first advice would be not to underestimate your studies. Books have always been a good inspiration for new and great ideas, and the knowledge and expertise provided by your professors is priceless. Then, persevere and always keep trying, never give up. Business life is not easy; it gets very competitive and complicated sometimes, but with your best effort and sacrifice, you will be able to reach the top. How is marketing relevant to your role at Hispanic Community Services, Inc.? I spend a significant portion of my time promoting our events through our website, social media, and traditional marketing tools. I also work on developing products and programs that will help our community succeed and then presenting those ideas to our board of directors for approval. What do you consider your personal brand to be? I was raised in the Hispanic culture with a good education. I left home and moved to the U.S. looking for new opportunities in life and obtained my first job in the U.S. at the Hispanic Center. All this has combined with my natural talents, education, and experiences to make me a very compassionate, strong, and determined person. So I think that it would be true to say that my personal brand is defined by the work I have done motivating others and spending my life helping everyone around me improve their situation in life. I have also tried to encourage people to take advantage of the opportunities given to them in this country. I hope I've set an example of how honesty, loyalty, hard work, and passion for what you do can bring you success in life. What impact does corporate volunteerism have on a nonprofit organization? We have so many great corporate volunteer partners who help us raise money and put together a number of events for the Hispanic Center. There is something very special about seeing volunteers putting in the time and effort to help nonprofit organizations in our community. I also think there is a benefit for the businesses; I know that I try to purchase from companies that I see volunteering to make our community better.

The benefits of an environmental marketing strategy extend to virtually all of a firm's stakeholders when the strategy is effectively integrated with the firm's general marketing plan.

With many consumers committed to "going green," environmentally focused organizations often benefit from favorable public opinion and loyal customers. All of these small marketing decisions add real value in the minds of environmentally conscious consumers and, ultimately, contribute favorably to the bottom line.

Marketers looking to enhance the sustainability of their firm's goods and services need to

form a partnership with customers, suppliers, and communities to increase the likelihood that the firm makes socially responsible marketing decisions.

Success begins with the quality of the relationships that a company develops with its customers and other stakeholders. These relationships are at the heart of corporate social responsibility. Corporate social responsibility (CSR)

refers to an organization's obligation to maximize its positive impact and minimize its negative impact on society. CSR has been shown to benefit companies in many ways, including by improving employee retention as well as the company's brand image.

Developing a Successful Corporate Social Responsibility Program (continued) The task of implementing a broad CSR focus through specific action is often difficult, but firms can use the following key elements to guide them through the process:4

1. Good stakeholder management. 2. Good corporate leadership. 3. Integration of CSR into corporate policy at all levels and in all divisions of the firm

Marketers face the following five barriers to encouraging sustainable consumer behavior:

1. Lack of awareness and knowledge 2. Negative perceptions. 3. Distrust 4. High prices 5. Low availability

To get stakeholders to agree to sustainability initiatives, marketers must communicate a sustainability vision. That vision should highlight the importance of the organization's sustainability efforts and the potential benefits for each stakeholder.

A sustainability vision begins by communicating how the company's industry and specific organization work within the larger social and natural world. It should answer important questions: • How is the world enriched or diminished by our goods or services? • What is our major impact on society? • How does our overall business strategy reflect that impact?

In the same way that firms choose to hire new employees they like and respect, consumers increasingly choose to buy from firms that value and support the same causes they do.

As a result, firms have begun to accept responsibility for balancing profitability with social well-being when determining their success.

The divergence in how different geographic regions perceive sustainability also provides both challenges and opportunities for marketers. A majority of global business executives believe that sustainability is of significant importance to their business.

But marketers should be aware of how the location of those executives affects their opinions: Almost two-thirds of decision makers in emerging markets, such as India and South Africa, consider sustainability critical to business.47 Meanwhile, just under a third of decision makers in Japan and a quarter in the largest European markets (Germany, France, and the United Kingdom) feel the same. In response to this divergence, many organizations that engage in sustainable marketing focus a disproportionate amount of their efforts on emerging economies. In these markets, they tend to find more supportive consumer and political environments.

2 of 4 Foundation of CSR : Legal Dimension Marketers have a responsibility to understand and obey the laws and regulations of the communities in which they do business. They must follow local, state, and federal laws. Beyond this, U.S. companies are also subject to the laws and regulations of the foreign countries in which they do business.

CSR programs often begin as a way of reducing the likelihood of legal problems and public relations disasters, either at home or abroad. Such examples prove that the short-term benefits from the economic dimension will be erased if the firm eschews responsibility in the legal dimension.

Rationalizing Global Sustainability The way marketers justify sustainable marketing varies in different parts of the world. For example, U.S. marketers rationalize sustainability strategies using economics or bottom-line terms and arguments.

Companies owned by members of the European Union rely more heavily on language related to the idea of citizenship, corporate accountability, or moral commitment. That's not to say that European companies value sustainability to the exclusion of financial elements. Rather, they project a commitment to sustainability in addition to their commitment to financial success. Regardless of the justification, sustainable and environmental strategies tend to work best when firms can maximize the benefits for all stakeholders concerned.

Kristina Myers Director of Business Development Jonesboro Regional Chamber of Commerce Describe your job. I am responsible for communicating the numerous diverse marketing opportunities that are available to members of the Jonesboro Chamber of Commerce in Jonesboro, Arkansas. We are fortunate in this region to have a large number of very socially responsible firms who place a tremendous value on the work we are doing at the Chamber to help our entire business community, and it is a privilege to get to work with them each day.

How did you get your job? While attending college, I learned to come out of my shell and express my thoughts without worrying what people thought. During this process of becoming more extroverted, my efforts to network with others were noticed by one of my professors who, in time, asked me for my resume to pass on to potential employers. What has been the most important thing in making you successful at your job? I would consider my ability to be empathetic and understanding to be the most important thing that has made me successful at my job. I have to put myself in others' positions to really understand what members of the Chamber of Commerce need from my organization. The ability to empathize with business owners and prospective newcomers to the community allows me to comprehend the marketing opportunities that would benefit them the most. What advice would you give soon-to-be graduates? First, and foremost, do not limit yourself because of fear. Be proud of all that you have accomplished and know that, through strong intrinsic motivation and determination, you can be successful! Also, it is important to apply the idea of continuous improvement to both your professional and your personal life. Reflect on your experiences and learn as much as you can from them. What do you consider your personal brand to be? I am a supportive, professional relationship manager. I try to reinforce this brand in every action I take professionally and personally.

In response, companies have evolved from a reactive state, in which they responded to customer feedback about their CSR-related strategies, to a proactive approach.

In the proactive approach, companies make their CSR activities known to customers through the various online tools at their disposal. For example: M&M's parent company Mars Inc. uses Facebook to promote the firm's initiatives around sustainable cocoa production by telling the stories through the same M&M's characters it uses to promote the brand.

3 of 5 Barriers to Sustainable Consumerism : Distrust. Some consumers simply do not believe the sustainability claims made by marketers.

It is essential for marketers to promote their products in an honest and ethical manner. A firm caught misleading consumers over sustainability claims could damage its reputation for years to come, reducing profit and hurting the firm's long-term viability.

3 of 3 Environmental Marketing Strategies : Strategic greening requires a holistic approach that integrates and coordinates all of the firm's activities on environmental issues across every functional area.

It represents a fundamental shift in the way the firm markets its products. For example, Nestlé has reformulated certain products to decrease their environmental impact without affecting their taste, nutrition, or consumer appeal. Beyond this, the company has begun training farmers on good environmental stewardship and funding scientific research into producing sustainable cocoa and coffee.

Sustainability Vision Statement Many organizations find it useful to articulate the answers to these questions through a sustainability vision statement. For example:

PepsiCo's sustainability statement is to "continually improve all aspects of the world in which we operate—environmental, social, economic—creating a better tomorrow than today." These statements clearly articulate each company's sustainability mission. Not coincidentally, these firms are three of the leaders in sustainable marketing throughout the world.

5 of 5 Barriers to Sustainable Consumerism : Low availability. Consumers in small communities or developing parts of the world may have a hard time finding sustainable products to buy.

The place element of the marketing mix becomes critical in overcoming this barrier. Marketing professionals must find ways to deliver products to the sustainability-minded customers who want to buy them.

Sustainable marketing

The process of creating, communicating, and delivering value to customers in a way that recognizes and incorporates the concept of sustainability.

The concept of sustainability first came to international attention in the 1987 United Nations report "Our Common Future."

The report laid the groundwork for a modern understanding of sustainability as a commitment to a lifestyle that meets the needs of the present without compromising the ability of future generations to meet their own needs.

3 of 3 Implementing a broad CSR Focus : Integration of CSR into corporate policy at all levels and in all divisions of the firm. CSR policies and procedures are most useful when they are written down, well understood, and endorsed by affected employees.

These range in scope: A broad policy might be a strategic decision about the treatment of foreign workers. A smaller initiative might be procedures that require employees to shut off the lights before leaving work or installation of sensors to turn off lights when no movement is detected. Figure 16.2 illustrates how the CSR policy at Toyota guides decisions across the firm and throughout the world.

2 of 4 Foundation of CSR : Legal Dimension (continued) Marketers must take a broad view of the legal dimension and its relationship to ethics. In the years leading up to the recession that began in late 2007, many firms marketed products that, though legal at the time, were highly questionable ethically. This was especially the case in financial industries, ranging from banking to real estate. After the recession hit, outraged consumers demanded action. The result was new laws and regulations, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

They have altered the legal dimension for firms: Because of Dodd-Frank, real estate transactions involve more steps, stricter due diligence, and longer time frames than they did previously. These additional complexities can delay or reduce the revenue a firm might generate from the transaction. In addition, bank marketers face new pricing restrictions on debit cards and other bank services. Such new restrictions could require banks to raise fees in other areas (e.g., through the elimination of free checking accounts) to maintain revenue and profit.

One of the easiest ways for marketers to engage in sustainable marketing is to

eek ways to cut costs, using sustainable practices as a guideline. Firms can choose from a wide range of strategies and ideas, from developing different packaging to using less energy.

The green market doesn't seek only environmentally friendly goods. Its members also want

environmentally friendly services. Service providers ranging from doctors to electricians to universities have made efforts to protect the environment as part of their service offering. Some utility companies now offer customers the opportunity to purchase their energy needs from wind, solar energy, and other renewable sources.

Organizations today are forced to confront a new economic reality: It is no longer acceptable to

experience economic prosperity in isolation from those stakeholders (customers, communities, and employees) who are affected by the organization's decisions.

As globalization brings the world closer together, marketers must develop strategies that

fit with expectations in both domestic and international markets.

CSR includes not only economic and legal issues but also a focus on ethics and accountability to stakeholders. Stakeholder responsibility

focuses on the obligations an organization has to its stakeholders, those who can affect or are affected by a firm's actions. Stakeholder responsibility is the driving consideration across the four dimensions of corporate social responsibility: 1. economic, 2. legal, 3. ethical, and 4. philanthropic.

Firms sometimes mistake these emerging concerns as the domain of younger generations. In reality,

over half of all baby boomers consider themselves environmentally conscious shoppers.30 That's 40 million customers who choose to buy resource-conserving products from the shelves and who boycott the products of companies that pollute or engage in other activities that could damage the environment.

Whether focused on the domestic or the global marketplace, the central tenets of social media • transparency, • authenticity, and • engagement with the community to build a strong and profitable organization

reflect the same strengths that make corporate social responsibility and sustainability such compelling business philosophies. Marketing professionals at all types of firms, from Fortune 500 companies to local small businesses, recognize that social media can serve as valuable tools in the effort to create, communicate, and deliver sustainable products and solutions to their stakeholders.

Within many organizations, the marketing department is primarily responsible for

the ideas and strategies that comprise a CSR program, making this topic an important part of your marketing education.

Environmental regulations, though they may limit firms in some regard, provide marketers with opportunities. For example,

when the 1992 Energy Policy Act limited the amount of water showerheads could deliver, firms like Teledyne Technologies developed a new line of products, the Shower Massage showerheads. The showerheads met the new standard and captured sales and profit for the firm.

Analytics for Auditing a Corporate Social Responsibility Program Once an organization has developed a corporate social responsibility program, the focus shifts to how well it is working. This can be done by means of an audit that uses analytics to measure the success of the program. Those who are responsible for a company's CSR program should consider the following crucial points as they measure the program's effectiveness:7

• Include all significant stakeholder groups in the auditing process. Failure to include all stakeholder groups is perhaps the biggest misstep marketers can make when evaluating their CSR program. • Use both quantitative and qualitative measurements. Companies must undertake quantitative measures as part of their audit. Such measures include return on investment (ROI) and any changes in employee turnover and brand image associated with the CSR program. Marketers should also do qualitative research in an attempt to measure what consumers and employees know about the organization's CSR efforts.

The Benefits of a Sustainability Vision A sustainability vision can drive innovation within an organization. For example, Unilever PLC used the lens of sustainability as a way to design and produce new products, such as a hair conditioner that uses less water.23 Without a goal of sustainable marketing, the company's research and development efforts may not have led to the product, which has been well received by consumers and helped to improve the firm's profit.

A commitment to sustainability also benefits employees. They tend to be engaged when they work for a company that expresses sustainability goals and holds itself accountable to its stakeholders. In addition, they believe they are part of something bigger than just their job or department. At Coca-Cola in Great Britain, for example, an appointed Green Team encourages employees to live more sustainably. Shortly after starting the Green Team program, Coca-Cola was ranked as one of the top-30 great places to work in Britain by the Great Place To Work Institute.

Green Market

A group of sustainability-oriented customers and the businesses that serve them.

The Civic 50 is a scorecard of

America's community-minded companies, produced by Bloomberg LP in partnership with the National Conference on Citizenship and Points of Light.

These three categories of marketing activities represent the various degrees to which a firm can adopt an environmental focus. The categories are governed by the overall environmental strategy a company chooses to implement.

Figure 16.3 shows five types of environmental marketing strategies marketers can choose, depending on a firm's competitive advantage and the overall marketing strategy it has adopted.40 Each of the strategies is discussed in more detail in the sections that follow.

Strategy 5: Sustainable Value Innovation A final strategy firms can pursue is sustainable value innovation. This strategy entails reshaping the industry through the creation of differential value for consumers. It involves making contributions to society in the form of both reduced costs and reduced environmental impact.

Firms that engage in this strategy do not aim to outperform the competition in an existing industry. Rather, they seek to create a new market space. In doing so, they hope to make the competition irrelevant, by giving the consumer more value per product at a lower price. Examples of this strategy in action include solar-tracking skylights designed to follow the sun and maximize daylight harvesting and walls built from straw, channel glass, and other energy-efficient materials.

1 of 3 Implementing a broad CSR Focus : Good stakeholder management. Marketers should seek significant interaction with the stakeholders who influence the decisions and behavior of the company.

For example, Toyota might meet with investors, environmentalists, regulators, and customers to gather ideas for ensuring that the plastic resources used in manufacturing will be discarded in an environmentally friendly way. It might even implement a closed-loop supply chain for that purpose. The company could also work with the community to understand the impact of water usage by its manufacturing plant on surrounding areas.

2 of 3 Environmental Marketing Strategies : Quasi-strategic greening usually involves more substantive changes in marketing actions as well as broad-based coordination among nonmarketing activities.

For example, a firm might redesign its logo or overhaul a product's packaging to emphasize the firm's commitment to greenness. Telecommunications provider Sprint engaged in quasi-strategic greening when it began using 100 percent recycled materials in all its branded packaging.

Strategy 3: Eco-Branding An eco-branding strategy focuses on creating a credible green brand. For this strategy to be effective, consumers must recognize a noticeable benefit from their purchase.

For example, the Chevy Volt electric car provides an immediate and sizeable savings on monthly gasoline purchases. The eco-branding strategy tends to succeed in industries in which significant barriers to imitation exist. To achieve differentiation as part of an eco-branding strategy, the environmental improvement, such as the technology involved in developing a desirable electric car, should be difficult to imitate.

Social Media and Global Sustainability earth The global arena also provides a good opportunity for using social media to highlight and support CSR initiatives.

In Japan, for example, over 80 percent of firms use social media and digital technology tools to engage with customers on the sustainability of their goods and services.

4 of 4 Foundation of CSR : Philanthropic Dimension Marketers understand that giving back to the community is not only the right thing to do but also a great way to get the firm's name, product, or promotion out to consumers at a reasonable cost. Corporate philanthropy is the act of organizations voluntarily donating some of their profits or resources to charitable causes.

In recent years, companies have looked for innovative ways to engage in corporate philanthropy. For example, Pepsi marketers experimented with a program that combined philanthropy and social media in its Pepsi Refresh Project. Instead of spending millions of dollars on traditional advertising, the beverage maker set out to award grants to "people, businesses and non-profits with ideas that will have a positive impact." At the same time, the campaign engaged potential customers and enhanced the image of the firm.

1 of 5 Barriers to Sustainable Consumerism : Lack of awareness and knowledge. Many consumers don't know how to reduce the social and environmental impact of their purchasing behavior.

Marketers can play an important role in overcoming this barrier. Advertising, websites, social media, and other tools can educate consumers about how they can make a difference by consuming the company's products over those of competitors.

The movement's activities include anti-consumption campaigns, such as those against drinking carbonated soft drinks or wearing fur coats, staged as a form of resistance to a commodity culture and corporate brands.

Marketers should be aware of the power of these campaigns and the potential impact they can have on products and brands. Consumerism also includes an effort on the part of consumers to avoid purchasing goods and services that have been produced in a way that is inconsistent with sustainable business practices.27 Consumerism efforts increasingly occur both domestically and in international markets.

Strategy 2: Beyond-Compliance Leadership Most marketers who adopt a beyond-compliance leadership strategy focus on communicating to stakeholders the company's attempts to go beyond others in adopting environmentally friendly practices.

Marketers who select this strategy want to show customers that the company does more than the competition to implement an environmental strategy. Unlike an eco-efficiency strategy, companies that employ a beyond-compliance leadership strategy typically care more about differentiating themselves from competitors than about keeping costs low.

Levi's found that between when the cotton was grown in the fields and the end of the product's life, the manufacturing process had the least impact on water and energy use.

Meanwhile, growing the cotton used a great deal of water. With that knowledge in hand, Levi's joined a consortium of organizations, known as the Better Cotton Initiative (BCI), to teach an important stakeholder, farmers, how to grow cotton with less water. Cotton farmers in China reduced their water use by 23 percent compared with farmers who were not using BCI techniques.

Global Challenges and Opportunities However, implementing sustainability efforts on a global scale comes with its own unique set of challenges. Political barriers in some countries can limit the availability of or increase prices on sustainable goods for consumers.

One political barrier, for example, is a lack of political will on the part of leaders to enact sustainability-focused legislation. Elections, changes in consumer sentiment, and other external factors can increase or decrease such political barriers. On the bright side, marketers who actively scan the global environment can find foreign governments and policies that provide new opportunities for marketing sustainable products to global customers.

1 of 4 Foundation of CSR : Economic Dimension For-profit firms have a responsibility to their stakeholders to be profitable. Without profits, a business cannot survive. A failed business hurts employees, investors, and communities. Publicly traded firms have a unique responsibility to investors. These shareholders have invested in the firm with the expectation that they'll receive high share prices and dividends in return.

Over 50 percent of Americans invest in the stock market in the U.S. alone, many through the 401(k) retirement-savings plans offered by their employers. That level of stock-market participation makes the economic dimension critical not just to the firm's success but to the overall economic wealth of the country as well.

The history of consumerism goes back more than a century. Some highlights of the movement's history are: The National Consumers League was founded in 1899, bringing together several state and local consumers leagues. The publication of Upton Sinclair's The Jungle, with the help of the Consumers Leagues, led to passage of the Meat Inspection Act and the Food and Drug Act in 1906.

Ralph Nader published Unsafe at Any Speed in 1965, and the National Traffic Safety Act was passed the following year. The Consumer Product Safety Act was enacted in 1972, and much important environmental legislation has been passed beginning in the early 1970s.

The company's shift to a stakeholder-centric approach has brought it observable benefits, including improved customer and employee loyalty at all levels of the company.

Small businesses, too, can embrace sustainability and corporate social responsibility, while also growing and strengthening the bottom line. For example, the Stonyfield yogurt company emerged from an organic farm school that promoted family farms, a clean environment, and healthy food. To fund the farm school, the owners used milk from their cows to make pesticide-free, fertilizer-free yogurt. The product quickly became successful. It is now the focus of the company's business, which buys ingredients from hundreds of organic farms and runs on environmentally friendly principles.

The Global Sustainable Tourism Council (GSTC), a global coalition formed under the umbrella of the United Nations, made a significant commitment to social media in an effort to achieve its goal of promoting best practices in sustainable tourism around the world.

Sustainable tourism is the practice of recreational traveling in a way that maximizes the social and economic benefits to the local community and minimizes the negative impact on cultural heritage and the environment. The GSTC's Facebook page and Twitter feed are filled with content and conversations related to sustainable travel in a range of countries, from Greece to Mexico to Argentina.

1 of 3 Environmental Marketing Strategies : Tactical greening involves implementing limited change within a single area of the organization, such as purchasing or advertising.

Tactical activities represent relatively small actions aimed at instituting environmentally friendly practices within an organization. For example, JCPenney might decide to stop doing business with suppliers that do not meet the company's environmental or recycling requirements.

4 of 5 Barriers to Sustainable Consumerism : High prices. Consumers also have come to believe that the cost of producing a sustainable product translates into higher prices. One of the earliest complaints customers had against hybrid and electric cars was the high cost associated with the purchase.

Technological improvements and economies of scale, as well as increasingly efficient supply chains, gradually brought prices down. Beyond this, however, marketers used promotional tools to demonstrate how gas savings offset the high prices. Marketing environmentally friendly products can lead to higher prices due to the additional costs the firm incurs. In such cases, marketers must ensure that their customers understand the genesis of the high prices. If the firm can communicate the additional value the product offers, customers will be more willing to pay a high price for it.

Social Media-Based Corporate Social Responsibility Initiatives To capitalize on the opportunity social media provide, marketers must be consistent in their social media presence.

The companies leading the way in merging CSR and social media include some of the largest and most successful firms in the world: IBM's Smarter Planet, for example, is a website devoted to communicating the firm's sustainability initiatives. It uses compelling storytelling that showcases its work in communities and cities around the world. GE's Ecomagination Challenge is a $200 million experiment in which businesses, venture capital firms, entrepreneurs, innovators, and students develop clean energy ideas and submit them for funding.

2 of 3 Implementing a broad CSR Focus : Good corporate leadership The firm's leaders play a vital role in guiding their organization's business practices toward social responsibility. Success requires them to demonstrate a unique array of skills and competencies.

The emphasis in business thinking has shifted from process to people.5 Today, leaders try to thoughtfully balance the four dimensions of CSR and communicate their intentions accordingly. Those who are able to do so generally succeed at implementing socially responsible behaviors.

As you can see in Figure 16.1, economic and legal considerations form the foundation of CSR.

The ethical and philanthropic aspects go further. They encompass actions that, while not required of the firm, meet stakeholders' expectations for how the firm should act.

3 of 4 Foundation of CSR : Ethical Dimension The ethical challenges facing marketers come from many different places. Inevitably, they involve more gray areas than the legal dimension. As discussed earlier in the book, ethics are the moral standards expected by a society. Marketers are responsible for a number of choices with an ethical dimension and will be held accountable for making the right decision.

The ethical decision-making framework described in Chapter 1 provides a systematic tool for thinking about and making ethical decisions. Marketers who take the time to identify the ethical issue at hand and consider how their decision will affect each of the firm's stakeholders are far more likely to make the right decision and successfully resolve the problem.

For example, a ban on incandescent light bulbs that took effect in the European Union made compact fluorescent light bulb (CFL) and light-emitting diode (LED) technologies standard across Europe.

This political shift, driven by regulation and innovation, opened up new opportunities for marketers to sell green products to European consumers.

2 of 5 Barriers to Sustainable Consumerism : Negative perceptions. Some consumers have negative perceptions of sustainable products. They tend to believe that, while the products might be produced in a more sustainable way, they are inferior in quality.

To combat this barrier, firms must design and produce sustainable products of high quality. Equally important, they must use the various promotional tools at their disposal to communicate that quality to customers.

Strategy 1: Eco-Efficiency Marketers seeking to reduce costs and the environmental impact of their activities typically pursue an eco-efficiency strategy. This strategy involves identifying environmentally friendly practices that also create cost savings and drive efficiencies throughout the organization.

Transportation companies like J.B. Hunt, for example, look for ways to increase fuel efficiency. Fuel efficiency both saves the firm money and decreases the environmental impact of the company's services.

Developing a Successful Corporate Social Responsibility Program The marketing department is typically responsible for developing an organization's corporate social responsibility program. The process begins when

a firm incorporates into its marketing strategy a focus on fulfilling economic, legal, ethical, and philanthropic dimensions. This focus is often expressed through a formal corporate social responsibility statement.

The strategic choice to become environmentally conscious and sustainable has proven to be profitable; it also is

a good public relations decision, not just in the U.S. but across the globe. For example, the U.K. retailer Marks & Spencer spent $323 million over five years on sustainability strategies; it reported, just two years into implementing the initiatives, that its investment had already paid for itself.44 In addition to saving on its energy costs, the company's initiative appealed to customers seeking to purchase more sustainable products.

Environmentalism

a movement of citizens, government agencies, and the business community that advocates the preservation, restoration, and improvement of the natural environment. Its mission affects firms large and small and cuts across numerous industries and geographic locations. For example: • 96 percent of European consumers say that protecting the environment is important to them.31 • Increasingly, Chinese consumers purchase products based on concerns about climate change.32 • In the U.S., 80 percent of customers claim to act on environmental concerns.33

Consumerism

a movement, made up of citizens and government entities, that focuses on protecting consumers and promoting their interests. A new generation of consumers concerned with sustainability has begun to demand more from companies and marketers than just low prices. These consumers also seek a higher meaning in the products they purchase.

Marketers at Levi's were among the first in the apparel industry to conduct a life-cycle assessment of the firm's major products. Life-cycle assessment is

a technique used to assess environmental impacts associated with all the stages of producing and delivering a firm's products.

A critical component of overcoming all of these barriers is communication. Marketers must effectively

communicate that sustainable consumer behavior doesn't always require sacrificing current needs and wants for some distant benefit. As firms continue to develop sustainable goods and services that add value to consumers' lives, marketers must communicate this balance to consumers.

In the end, corporate social responsibility, sustainability, and environmentalism, whether they are implemented domestically or globally, are about

communication. Marketing professionals need to listen, consider what they hear, and respond appropriately to the widest group of stakeholders possible. Social media provide an effective means for communicating with an enthusiastic group of consumers. Social media allow people to organize, collaborate, and accomplish shared goals in ways that would have been unimaginable several decades ago.

Historically, customers bought products solely on the bases of price, performance, and convenience. Today,

customers also care about a product's origins and how it is manufactured, packaged, and disposed of.