Sustainability Marketing - Essay Example

? CORPORATE SOCIAL RESPOSIBILTY FOR DANNON By 5th, May, Question Sustainable marketing is of great importance today, as there is rise in new technologies, and communication, as well as relationship management. Belz & Peattie (2012, p.17) define sustainability marketing as “a representative of an evolution of marketing that blends the mainstream economic and technical perspectives with the emerging concepts of relationship marketing and the social, ethical, environmental, and intergenerational perspectives of the sustainable development agenda.” Similarly, Charter, Peattie, Ottman & Polonsky (2002, p12) define sustainable marketing as a management concept, which aims at achieving objectives by the development, production, and delivery of sustainable solutions that have a high value of sustainability, which ensures customer and stakeholders’ satisfaction. Therefore, it is possible to argue that overall, sustainable marketing is the adoption of sustainable business practices that create better businesses, better relationships, and a better world. Sustainability marketing adopts business practices, which promote sustainability in various aspects. These offer a remedy to environmental problems, and include a company’s production methods, as well as products, and marketing activities, which should result in minimal or no environmental pollution and depletion of resources (Charter et al 2002). Nonetheless, sustainable marketing is beneficial to a company in many ways. Sustainability marketing helps in the optimization of the performance of a company. According to Hunt (2010), adoption of sustainable marketing gives a company a competitive advantage. This will then result in an increased financial performance of a company. Often, companies compete for a competitive advantage in resources, which will offer them a position of competitive advantage in the market, and this is achieved by adoption of sustainable marketing. According to Charter et al (2002), sustainable marketing for a company is important, as this influences the buying decisions of customers, thus contributing to the growth of the company. Different companies that have adopted and prioritized sustainable marketing have shown an increased growth, compared to those that have not. This is because customers and businesses are not restricted to buying the brand only. These also buy the philosophies and policies of a company. Therefore, most clients will purchase from a company that prioritizes environmental, social, and ethical issues (Charter et al 2002). Sustainable marketing also helps a company to create strong relationships with its customers, employees, other companies, and the community. If a company adopts sustainable marketing, this gives it brand trust. Therefore, customers and other stakeholders will have trust in the company, thus show their loyalty to the company, and this boosts positive relationships in the company, which is important for the prosperity and sustainability of a company (Diane & Schouten 2012). Question 2 According to Belz & Peattie (2012, p.29) sustainability marketing involves “. . .planning, organizing, implementing, and controlling marketing resources and programmes to satisfy customers’ wants and needs, while considering social and environmental criteria and meeting corporate objects.” Therefore, using the sustainability marketing framework by Belz & Peattie (2012), it is possible to evaluate how Dannon integrates different elements of sustainability marketing into its business approach. In this sustainability marketing framework, two major aspects are essential are important, and these include the consumer behaviour and socio-ecological problems. Therefore, when developing different sustainability marketing elements, Dannon had to consider the behaviour of its customers in the market, as well as the present socio-ecological problems, which are prevalent in this 21st Century, where increased globalization and technological advances are experienced (Lofdahl 2002). Fig. 1: Sustainability Marketing Framework Source: Belz & Peattie (2002) After determining the present socio-ecological problems and customer behaviour, Dannon now develops different objectives and values of sustainability marketing, which will address the behaviours of consumers, as well as the current socio-ecological problems. After this, it is now possible for Dannon to come up with its strategies for sustainability marketing. The different strategies are combined with the company’s other marketing strategies to result in a marketing mix, which upholds sustainability. This therefore, transforms the company into one that upholds and prioritizes sustainability (Belz & Peattie 2002). In the present times, there is an advanced level of technology and production, as well as globalisation. These major factors have contributed to the depletion of natural resources today and led to the increased environmental degradation that is witnessed (Lofdahl 2002). Therefore, most scholars have considered that it is important that corporate responsibility be used as an instrument of addressing the political, social, and environmental challenges, which globalisation presents to humankind (Philip 2011: Simon 2004). Therefore, corporate responsibility, including sustainability marketing act as a response to these issues brought about by globalisation and increased technological advances today (Blowfield & Murray 2011). Dannon specializes in the production of yoghurt, and is popular for its commitment to “bringing health through food to as many people as possible” (Marqus et al 2011, p.1). Technology advancement today affects the food industry too, such that companies today use harmful chemicals in the production of their food products, and this has negative influence on the health of consumers, as it leads to obesity and cancer, among other health complications. This therefore, is a concern for most consumers of food products produced by companies, as the rate of obesity and other diseases related to unhealthy eating has sharply increased (Garcia-Rosell & Moisander 2008). Therefore, Dannon insists on the phrase “bringing health to people,” as a way of showing that it does not use harmful ingredients in its food products. Dannon has been committed to its CR as well as sustainability marketing, and this is evident in the different activities the company is involved in. For instance, Dannon performed research on healthy eating, and also educated the public on healthy eating. This shows how the company uses the present socio-ecological problems as a marketing strategy to change consumer behavior. Additionally, as a way of addressing the environmental degradation today, Dannon invests in the production of health and wellness foods, and is popular for its commitment to CSR initiatives, which are based on health and nutrition. Therefore, these show how Dannon is highly committed to sustainability marketing (Marqus et al 2011). With regard to its products, Dannon employs proactive health in its brands, and this gives the company a competitive advantage. In addition, in its marketing strategy, Dannon drifted its focus to the production of yoghurt that had high health benefit, to safeguard the health of its customers, as this is a concern for most customers. Additionally, it its sustainability marketing mix, Dannon bases its marketing strategies on three major aspects, including nutrition and health, people, and nature. This way, it means that Dannon considers the needs of its customers, as far as their health is concerned. On the other hand, this shows Dannon’s commitment to the environment, to help address the socio-ecological problems today (Juan & Rubio-Lopez 2007). With regard to nutrition and health, Dannon developed the U.S. Dannon Institute, which promoted awareness of people on healthy eating and nutrition. This was mainly concerned with the promotion of the health of preschool children, and the researching on nutrition. Additionally, Dannon exhibits its concern for the social environment through getting involved with people and the community. The company supports the local community through donations and volunteership. The employees of Dannon perform mainly this. These together with different organizations in the community are involved in activities that promote health and well-being. Finally, Dannon considers the natural environment, as part of its sustainability marketing process. This company therefore embraces various activities, which promote environmental safeguarding and reduce the company’s footprint on the environment. These include the reduction of the company’s packaging, and increasing the recycling programs in plants and offices. In addition, all the business strategies of the company were inclusive of green initiatives. This too included the transportation of products using trucks that emitted minimal carbon dioxide. Basing on the company’s Carbon Footprint analysis results, Dannon prioritized specific areas for improvement, including packaging, and water and energy use on manufacturing plants, among others, in order to address the environmental issues (Marqus et al 2011). Dannon is highly committed to sustainability marketing, as seen in the various elements of sustainability market, which the company has adopted and integrated in its business strategies. Nonetheless, a few changes in the approach of adoption of these sustainability marketing elements in the company would result in more effective results. First, the company should consider involving a greater number of its customers in its sustainability marketing (Sigh & Pandey 2012). Dannon only involves those communities where it operates, or has factories and headquarters. Additionally, the sustainability marketing elements that Dannon has adopted are internal initiatives, which the company does not communicate to its customers and the public. However, with regard to its financial sustainability, although its sustainability marketing has earned it brand trust and customer loyalty, no evidence is there to prove that this has helped the company to boost its financial standing. Therefore, being a profit company, Dannon should consider communicating its sustainability marketing not publicly, but through the engagement of more customers and stakeholders, as well as partnerships with other companies. This will be highly advantageous if the communication strategy can increase the external credit of the company and result in increased sales and sustenance of the company (Du, Bhattacharya & Sen 2010). Nonetheless, the present elements of sustainability marketing that Dannon employs have served the company well. Question 3 Part A Morsing (2005) argues that, most companies find it challenging to convey their CSR initiatives. This is a sensitive issue, which a company has to approach in a tactical manner, as it might have grave effects on a company, if not well approached. Mainly, there are two main options for Dannon. First, Dannon could choose to communicate to customers and stakeholders publicly about its CSR practices, or secondly, choose to carry on with its CSR practices in silence. Nonetheless, before making a decision on which option to adopt, there is need to gauge and analyse how well each option might serve the company. Potential Risks First, if Dannon chooses to announce its CSR practices in the public, this would have a negative effect on the company. Although customers and other stakeholders want a company to adopt CSR initiatives and prioritize them, when a company sends messages, which portray them as socially responsible, this does not guarantee them trust from customers. On the other hand, most stakeholders do not appreciate companies, which publicly talk about their CSR initiatives. Additionally, public exposure of CSR initiatives might be thought by customers as a marketing strategy for the company (Morsing 2005). On the other hand, if Dannon decided to remain silent about its CSR initiatives, probably customers and stakeholders would assume that the company lacks any CSR initiatives. Nonetheless, it is necessary for Dannon to make known to its customers its CSR initiatives; however, this should be done in an unconspicuously conspicuous manner. Dannon should develop a corporate CSR communication, which involves mainly the most important stakeholders of the company, who influence company reputation the most (Allen 2005). Nonetheless, these are employees, customers, and opinion leaders. Employees are the ones faced with criticisms on their companies’ CSR initiatives, therefore, training these will help them answer to outside criticisms appropriately, thus enhancing company image, with regard to CSR. On the other hand, working with opinion leaders will make Dannon to be publicly identified as a company that upholds CSR initiatives, since opinion leaders often highlight such companies, thus Dannon will not have to do it publicly by itself. Lastly, with regard to customers, Dannon needs not to include its CSR initiatives in its communication strategy or public relations activities. Instead, the CSR initiatives should be aligned to a company’s objectives and goals, and be part of the business strategy. Alternatively, Dannon could employ the interacting strategy, where it collaborates with other companies in inviting opinion leaders, NGO’s, political parties, among other relevant bodies, to discuss CSR initiatives together (Morsing 2005). Part B Possible Benefits There are different benefits and risks, which this kind of CSR communication strategy will present to Dannon Company. First, unlike public announcements and display of companies’ CSR initiatives, if Dannon adopts the proposed CSR communication strategy, this would avoid an obvious and conspicuous communication of its CSR strategy. Therefore, this will prevent Dannon from overaccentuating its good deeds and responsibilities (Mark & Carroll 2003). This becomes a benefit on the side of Dannon, since most customers and stakeholders perceive negatively those companies that display publicly their CSR initiatives, as these are considered to have hidden self-interests (Bhattacharya & Sen n.d). Therefore, this CSR communication strategy would help Dannon to attract the trust of customers and stakeholders. Morsing & Schultz (2006) argue that if a company uses conspicuous CSR communication strategies to increase legitimacy, it might cause its legitimacy to decrease instead. In addition, Morsing & Schultz (2006) argue that if a company is already regarded as legitimate by the public, with regard to its CSR, then there is no need for it to display and announce its CSR again. Therefore, when Dannon adopts this CSR communication strategy, it will involve itself in minimal public display of its CSR, therefore, communicating to the public that its stakeholders already have faith in it, therefore, there is no need for it to engage in self-promotion. This therefore, will reflect positively on the company (Pavlos, Tsamakos, Vrechopoulos & Avramidis 2009). Possible Risks Nonetheless, this proposed CSR communication strategy makes stakeholders learn about the CSR of Dannon, but in an unconspicuously conspicuous manner. Therefore, this means that Dannon does not remain silent about its CSR initiatives. Therefore, Morsing & Schultz (2006) have argued that there are a number of risks and dangers that a company might be faced with, when it makes known its CSR initiatives, unlike those that are silent about their CSR initiatives. Overall, this decision will expose Dannon to legitimacy problems at a particular period. Although informing about CSR initiatives might help resolve or prevent a legitimacy problem, Morsing & Schultz (2006) argue that this might also provoke a legitimacy problem, if the company stakeholders have issues with its legitimacy. Part C Presently, Dannon is a company that highly upholds its CSR. However, it has integrated its CSR into its overall company mission; therefore, the CSR is not communicated independently. Compared to publicly announcing its CSR initiatives, the current CSR initiatives of Dannon bear positive implications to the company. Therefore, changing the communication strategies of these CSR initiatives would result in considerable negative outcomes on the company. First, customers and stakeholders might be confused about the reasons why the company chooses to suddenly let their CSR strategies be communicated publicly. Secondly, since the current CSR strategies of Dannon are working well for the company, adopting a communication strategy for them might not realize any tangible effects on the sales of the company. Although it is possible for a new CSR communication strategy to increase the confidence of customers in the company and its products, it is less likely that this would result in any considerable growth for the company (Pavlos, Theotokis & Panagopoulos 2010). Therefore, the current CSR strategies of Dannon are known to serve the company well, thus adopting a new CSR communication strategy might expose the company to risks (William & Chandler 2011). Question 4 Dannon has a considerable number of stakeholders, who influence its operations and sustainability. According to Freeman (1999), stakeholders of a company are those individuals or groups, who are affected by the success of a company’s objectives. These might include shareholders, suppliers, and customers, among others. Therefore, these have a claim in some of the company’s outcomes, products, and operations. Stakeholders of a company can be divided into two major categories, including primary and secondary stakeholders. Therefore, the primary stakeholders of Dannon include its customers, employees, shareholders, investors, suppliers, the community, and government. On the other hand, the secondary investors of Dannon include the media, the general public, and different special interest groups. Unlike the primary stakeholders, secondary stakeholders might influence the company, but do not contribute or participate in the company’s economic dealings. Although Dannon might not need secondary stakeholders for its economic survival, these might have considerable influence on the company, thus they should be put into consideration (Barnett 2007). Nonetheless, the most important stakeholders to Dannon include its customers, shareholders, and investors. According to Barnett (2007), stakeholders play a major role in a company, and influence a company’s policies and operations in major ways. In Dannon, its stakeholders considerably influence the sustainability efforts of the company, while at the same time; the company’s sustainability efforts affect its stakeholders. With regard to Dannon’s customers, they have great expectations in the company, as far as its sustainability is concerned. Therefore, this compels Dannon to invest and uphold sustainable marketing, in order to sustain its customer base (Stead, Stead & Starik 2004). Therefore, customers challenge Dannon to increase its sustainability efforts. On the other hand, employees at Dannon act as the ambassadors of the company. These carry with them the image of the company in public. Therefore, these, depending on how they regard the company, might have positive or negative influence on the sustainability efforts of Dannon. If employees are well informed about the sustainability marketing, as well as the overall CSR of Dannon, they will have a positive impact on the company’s sustainability efforts. These will communicate to the public the commitment of Dannon to its sustainable marketing, therefore making the efforts of the company pay, in the form of a positive public image (Barry 2012). Key shareholders of Dannon might influence Dannon’s sustainability efforts, especially when there are different conflicts of interest. Since these and other key parties participate in the company’s decision-making, these might be involved in the company’s decision-making process, with regard to sustainability marketing. Therefore, there might be different perceptions about various sustainability approaches to be adopted by the company (Robert 2011). The contribution of shareholders might result in decisions, which might either derail the sustainability efforts of Dannon, or boost them. This however, depends on the nature of decisions they make. Nonetheless, the sustainability efforts of Dannon are partly dependent on stakeholders, as some decisions stakeholders make affect them, and on the other hand, the sustainability efforts of Dannon influence the stakeholders (Ogunmokun, Tripolitano & Rose 2012). Additionally, investors will only invest in a company that demonstrates growth, and is committed to sustainability. Stakeholder relationships are important to any company, since these, depending on their nature; influence a company positively or negatively. Therefore, a company should struggle to ensure that their relationship with its stakeholders is positive and strong. There are different ways through which Dannon might strengthen its stakeholder relationships, and this depends on adoption of an effective stakeholder management process (Carroll & Buchholtz 2011). Nonetheless, the only practical way through which Dannon can improve its stakeholder relationships is through improving on its stakeholder management process. First, it is important that Dannon identifies, and groups its stakeholders with regard to their relevance in different processes in the company. This will help Dannon to know the value and importance of each of its stakeholders in the company (Achterkamp & Vos 2007). Different stakeholders in a company have different needs, which must be met by the company. Therefore, in order to strengthen the relationship with its stakeholders, Dannon must meet the needs of each group of its stakeholders. Therefore, Dannon as a company should find and determine the various ways through which it can effectively meet the needs of its different stakeholders. This is because failure to meet the needs of stakeholders results in strained relationships with the company, with some stakeholders opting out of the relationship (Ronald, Agle & Wood 1997). Dannon might also consider working on its present policies that affect its stakeholders. The company might choose to modify several of its policies, so that these meet the needs and interests of its stakeholders. Additionally, developing an effective communication between the company and stakeholders is crucial. Nonetheless, strong and healthy relationships with stakeholders, effective sustainability marketing and effective CRS communication strategies are some of the factors that Dannon and other companies in the 21st Century should prioritise for their own sustainability. Works Cited Achterkamp, M. C., & Vos, J. 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