978-0134492513 Chapter 20 Lecture Notes Part 1

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Chapter 20

SUSTAINABLE MARKETING: SOCIAL

RESPONSIBILITY AND ETHICS

MARKETING STARTER: CHAPTER 20

SUSTAINABILITY AT UNILEVER: Creating a Better Future Every Day

Synopsis

When Paul Polman took over as CEO of Unilever, the foods, home, and personal care products company was a

slumbering giant. It needed renewed energy and purpose. To find an energizing mission, Polman looked beyond the

typical corporate goals of increasing sales, profits, and shareholder value. Polman asserted that growth results from

accomplishing a broader social and environmental mission. Unilever exists “for consumers, not shareholders. If we

are in sync with consumer needs and the environment in which we operate, and take responsibility for our [societal

impact], then the shareholder will also be rewarded.” Evaluating and working on sustainability impact is nothing

new at Unilever. But in late 2010 Unilever launched its Sustainable Living Plan to take capitalism to the next level.

The plan is not just the right thing to do for people and the environment, but also for Unilever. It saves money, fuels

innovation, and creates new market opportunities.

Discussion Objective

A 10-minute discussion of the chapter-opening Unilever story will give students a realistic look at the virtues and

challenges of implementing a global sustainability program. Unilever’s history and recent performance shows that a

complete business strategy centered on social and environmental responsibility not only helps the world and its

citizens, but can also generate healthy long-term profits. In such a situation, everyone can win.

Starting the Discussion

A visit to the Unilever website at www.unilever.com will provide an interesting entry point into Unilever and its

commitment to the Sustainable Living Plan. As a class, review the company’s home page. Which corporate values

are immediately evident? From words? From photos? Also explore the “Sustainable Living,” “Brands” and “About”

links. Review with students the many different ways in which sustainability can be defined, and how a major

corporation such as Unilever can make a real difference. Any of the “Sustainable Living” links will provide an

interesting departure point. You can also view multiple links to specific aspects of Unilever’s commitment to

corporate responsibility by clicking on “Unilever Global” and reviewing its commitment in specific countries

around the world. It will be important to help students understand that sustainability and making a profit can go hand

in hand and that sustainable practices enhance profitability in the long term.

Use the following questions to guide the discussion.

Discussion Questions

1. Describe Unilever’s Sustainable Living Plan. What are its key objectives and goals? (The Sustainable

Living Plan sets goals in three broad areas: improving health and well-being, reducing environmental

impact, and enhancing livelihoods. The company provides objectives, benchmarks, action items, and

evaluations of progress. All of this information is available under the “Sustainable Living” tab. By digging

into the plan, the students will begin to understand Unilever’s sustainability goals. These goals span the

entire value chain, from how the company sources raw materials to how customers use and dispose of its

products.)

2. What is one example of how product adaptation can promote sustainability? (Unilever’s website provides a

number of interesting examples. Start with

https://www.unilever.com/sustainable-living/the-sustainable-living-plan/our-strategy/, and examples such

as improving nutrition by reducing salt content in foods.)

3. How does the Unilever story relate to the concepts in Chapter 20 on sustainable marketing? (Unilever

provides an excellent example of a company pursuing a sustainable marketing strategy. It presents a nice

bridge to discussing the principles of sustainable marketing and the opportunities and challenges it presents.

Students will discover as they move through the chapter that almost every company these days is adding

environmental and social responsibility goals to its profit objectives.)

CHAPTER OVERVIEW

Use Power Point Slide 20-1 here

In this final chapter, we look at the concepts of sustainable marketing, meeting the needs of

consumers, businesses, and society—now and in the future—through socially and

environmentally responsible marketing actions.

The chapter begins with a definition of sustainable marketing and then looks at some common

criticisms of marketing as it impacts individual consumers and other businesses. Next, it covers

consumerism, environmentalism, and other citizen and public actions that promote sustainable

marketing.

Finally, the chapter looks at how companies themselves benefit from proactively pursuing

sustainable marketing practices that bring value not just to individual customers but also to

society as a whole.

Sustainable marketing actions are more than just doing the right thing; they are also good for

business.

CHAPTER OBJECTIVES

Use Power Point Slide 20-2 here

1. Define sustainable marketing and discuss its importance.

2. Identify the major social criticisms of marketing.

3. Define consumerism and environmentalism and explain how they affect marketing

strategies.

4. Describe the principles of sustainable marketing.

5. Explain the role of ethics in marketing.

CHAPTER OUTLINE

p. 572 INTRODUCTION

Unilever made a greater commitment to environmental

responsibility after Paul Polman took over as CEO. While it

p. 573

Photo: Unilever

already had programs in place, its new Sustainable Living

Plan, launched in late 2010, was a much more aggressive

plan, with a goal to “create a better future every day for

people around the world….” According to Mr. Polman,

Unilever’s long-term commercial success depends on how

well it manages the social and environmental impact of its

actions.

The Sustainable Living Plan sets out three major social and

environmental objectives, focused on improving health and

well-being, reducing environmental impacts, and enhancing

livelihoods.

The sustainability plan is not just the right thing to do for

people and the environment, but it’s also right for the

company, and continues a path the company began long

before the introduction of the Sustainable Living Plan.

Opening Vignette Questions

1. What are some of the ways in which Unilever

promotes sustainability through its products and

global initiatives?

2. Can Unilever’s philosophy be adopted by other

industries? Which ones? Provide examples and

explain.

3. Where does Unilever go from here? How is it

doing so far? From an environmental

sustainability standpoint, what might be next for

the company?

p. 574

PPT 20-3

PPT 20-4

PPT 20-5

Define sustainable marketing and discuss its importance.

SUSTAINABLE MARKETING

Sustainable marketing calls for socially and environ-

mentally 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.

Figure 20.1 compares the sustainable marketing concept

with other marketing concepts from earlier chapters.

The marketing concept recognizes that organizations thrive

from day to day by determining the current needs and wants

of target group customers and fulfilling those needs and

wants more effectively and efficiently than the competition.

Learning Objective

p. 574

Key Term:

Sustainable

marketing

p. 575

Figure 20.1:

Sustainable

Marketing

p. 575

Ad: McDonald’s

p. 575

It focuses on meeting the company’s short-term goals by

giving customers what they want now.

However, satisfying consumer’s immediate needs and

desires doesn’t always serve the future best interests of

either customers or the business.

Whereas the societal marketing concept considers the future

welfare of consumers and the strategic planning concept

considers future company needs, the sustainable marketing

concept considers both.

Sustainable marketing calls for socially and environ-

mentally responsible actions that meet both the immediate

and future needs of customers and the company.

Review Learning Objective 1: Define sustainable

marketing and discuss its importance.

Assignments, Resources

Use Discussion Question 20-1 here

Use Think-Pair-Share 1 and 2 here

Troubleshooting Tip

Most of the concepts in this chapter will be new.

Some students cast an uncritical eye on the opinions

of activist groups and think that not a single

company can be trusted to “do the right thing.” The

task in this chapter is to present both sides, both

good and bad, so that students can see that although

problems do exist, there are solutions, and industry

does tend to work toward reining in those who

would create problems for consumers, society as a

whole, or other businesses.

p. 576

PPT 20-6

PPT 20-7

p. 576

Identify the major social criticisms of marketing

SOCIAL CRITICISMS OF MARKETING

Marketing’s Impact on Individual Consumers

Consumer advocates, government agencies, and other

critics 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.

High Prices

Learning Objective

PPT 20-8

p. 576

p. 577

PPT 20-9

p. 577

Many critics charge that the American marketing system

causes prices to be higher than they would be under more

“sensible” systems. They point to three factors—

distribution, advertising and promotion, and markup.

High Costs of Distribution. A long-standing charge is that

greedy channel intermediaries mark up prices beyond the

value of their services.

How do resellers answer these charges? They argue that

intermediaries do work that would otherwise have to be

done by manufacturers or consumers.

High Advertising and Promotion Costs. Modern market-

ing is accused of pushing up prices to finance heavy

advertising and sales promotion.

Excessive Markups. Critics charge that some companies

markup goods excessively.

Marketers respond that most businesses try to deal fairly

with consumers because they want to build customer

relationships and repeat business.

Deceptive Practices

Deceptive practices fall into three groups:

1. Pricing

2. Promotion

3. Packaging

Deceptive pricing includes practices such as falsely

advertising “factory” or “wholesale” prices or indicating a

large price reduction from a phony high retail list price.

Deceptive promotion includes practices such as

misrepresenting the product’s features or performance, or

luring the customers to the store for a bargain that is out of

stock.

Deceptive packaging includes exaggerating package

contents through subtle design, using misleading labeling,

or describing size in misleading terms.

p. 576

Photo: Claritin

p. 577

Photo: Deceptive

advertising

PPT 20-10

p. 578

PPT 20-11

p. 578

PPT 20-12

p. 578

PPT 20-13

p. 579

PPT 20-14

The Wheeler-Lea Act gives the Federal Trade Commission

(FTC) power to regulate unfair or deceptive acts or

practices.”

“Puffery” is defined as innocent exaggeration for effect.

High-Pressure Selling

In most cases, marketers have little to gain from

high-pressure selling.

Such tactics may work in one-time selling situations for

short-term gain. However, most selling involves building

long-term relationships with valued customers.

Shoddy, Harmful, or Unsafe Products

Typical product complaints:

Products are not made well and services are not

performed well.

Product safety may occur due to company

indifference, increased product complexity, and poor

quality control.

Many products deliver little benefit, or they might

even be harmful.

Planned Obsolescence

Critics also have charged that some companies practice

planned obsolescence, causing their products to become

obsolete before they actually should need replacement.

If products don’t wear out fast enough, then companies are

charged with perceived obsolescence, changing consumer

concepts of acceptable styles to encourage more and earlier

buying.

Marketers respond that consumers like style changes; they

get tired of the old goods and want a new look in fashion.

Or, they want the latest high-tech innovations, even if older

models still work.

Poor Service to Disadvantaged Consumers

p. 578

Photo: Harmful

products, soft drink

p. 579

Photo: Underserved

p. 579 The American marketing system has been accused of

serving disadvantaged consumers poorly.

Critics accuse major chain retailers of “redlining,” drawing

a red line around disadvantaged neighborhoods and

avoiding placing stores there.

For example, the nation’s poor areas have 30 percent fewer

supermarkets than do affluent areas. As a result, some 23.5

million Americans—including 6.5 million children—live in

low-income areas that lack stores selling affordable and

nutritious foods.

consumers

Assignments, Resources

Use Marketing by the Numbers here

Use Additional Projects 1, 2, and 3 here

Use Think-Pair-Share 3 here

Troubleshooting Tip

Unless a university is in an urban area, most

students will be surprised that many large retailers

stay away from disadvantaged neighborhoods, and

that banks and insurance companies might

discriminate against customers living in these areas.

Even at urban universities this could be cause for

surprise because most urban schools are not located

in the truly disadvantaged areas. A discussion on the

pros and cons of, say, a Walmart or a major grocery

retailer locating in an inner-city neighborhood can

aid in the comprehension of the risks and rewards

for the company, as well as for the consumers.

p. 580

PPT 20-15

Marketing’s Impact on Society as a Whole

False Wants and Too Much Materialism

Critics have charged that the marketing system urges too

much interest in material possessions.

People are judged by what they own rather than by who

they are.

Marketers respond that these criticisms overstate the power

of business to create needs.

Too Few Social Goods

p. 580

Photo: Materialism

p. 581

PPT 20-16

p. 581

PPT 20-17

p. 582

PPT 20-18

Business has been accused of overselling private goods at

the expense of public goods.

A way must be found to restore a balance between private

and public goods. Options include:

Making producers bear the full social costs of their

operations, or

Making consumers pay the social costs.

Cultural Pollution

Critics charge the marketing system with creating cultural

pollution.

Marketers answer the charges of “commercial noise” with

these arguments:

Because of mass-communication channels, some ads

are bound to reach people who have no interest in

the product and are therefore bored or annoyed.

Ads make much of television and radio free to users

and keep down the costs of magazines and

newspapers.

Today’s consumers have alternatives.

Marketing’s Impact on Other Businesses

Critics charge that a company’s marketing practices can

harm other companies and reduce competition.

Three problems are involved:

1. Acquisitions of competitors

2. Marketing practices that create barriers to entry

3. Unfair competitive marketing practices

Review Learning Objective 2: Identify the major social

criticisms of marketing.

p. 582

Photo: Cultural

pollution

p. 583

Photo: Google

Assignments, Resources

Use Discussion Question 20-2 here

Use Additional Project 4 here