Explaining and Exploring the Concepts of Sustainability Marketing - Essay Example

? Sustainability marketing Contents Contents 2 Introduction 3 Critical review of literature 3 Evolution of research in area of sustainable marketing 6 Illustrative examples 9 Implications of practice 10 References 12 Introduction Economic growth, globalisation trends and rapid advances in technology have created new avenues for industrial growth, expansion and management concepts. Considering the growing competition facing organisations today and the pressure to outperform others in the market, there is increased emphasis on adopting new forms of management practices, strategic planning and collaborative efforts for effective outcomes. While economic pressures govern organisational strategies, their social responsibilities have also assumed increased significance. Widespread focus and attention on the issues of corporate social responsibilities and sustainable growth aspects have shaped new governance policies and practices. Such perspectives define the role organisations can play in creating responsible economic, environmental and social well-being of the communities they impact or serve. Several studies and observations made in this context have sparked debates on whether the marketing practices today are suited to an age characterised by environmental deterioration, scarcity of resources, expanding population and growing income disparities. Recent frameworks in this context are shaping innovative marketing practices that are founded on the principles of sustainability. A number of research studies have focused on explaining and exploring the concepts of sustainable marketing. This paper provides a deeper insight into the observations and conclusions provided by these studies and how it has contributed to the evolution of the concept of sustainable marketing practices. Critical review of literature The present business environment places increased focus on sustainable development and marketing approaches that support the goals and objectives of sustainable development. While a vast number of theoretical approaches and studies have focused on developing a deeper understanding of the issues and aspects of sustainable development, there are very few studies that have explored the areas of sustainable marketing. According to the World Commission on Environment and Development’s report sustainable development is defined as the “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (World Bank Group website, 2001). Sustainable development relates to the ability of the organisations to balance the social, economic and environmental objectives. While economic objectives refer to industrial growth, individual needs, community requirements, and services social objectives refer to community empowerment, social mobility, cultural preservation, and equality. These needs and objectives should balance the environmental needs that encompass biodiversity, natural resources, ecosystem, pollution free air and water (Vagasi, 2004). Sustainable marketing remains an ambiguous term considering the paucity of extensive research in this area. Chen et al. (2009) define sustainable marketing as “the establishment, maintenance and enhancement of customer relationships in order that the objectives of the parties involved are met without compromising the ability of future generations to achieve their own objectives” (p88). The essence of this definition can be related to the principles of sustainable development that are being incorporated by organisations across all disciplines for improved social and ethical business practices. The whole concept of green marketing or sustainable marketing is based on the principle of respecting the environment and considering social benefits as a distinctive part of the goods or services being sold in the market (Kotler et al., 2010). The essence of sustainable marketing practices is visible in various stages of product development, modification of existing products, changes in the production process, communication to the customers, and packaging of products. Sustainable marketing practices are also referred to as green marketing that relates to the impact of the various organizational activities on the natural environment (Polonsky, and Mintu-Wimsatt, 2010). Recent practices mark a growing shift towards the adoption of green marketing concepts that are based on the principles of sustainability. Johnson (2013) in his works on Green marketing concepts observes that organisations that do not conform to sustainable development business practices will be viewed as outdated in future. According to the observations of Jacquelyn Ottman (2010) green marketing concepts are based on the principles of consumer awareness and understanding of the benefits of using environment friendly products, a deeper insight of key environmental issues exposed by the business and its impact on the communities, employees, suppliers, retailers and shareholders. The foundations of success in sustainable marketing practices is determined by the extent to which there is awareness of environmental issues related to the consumption of specific products and the initiative to create products that incorporate aspects to achieve improved ecological balance (Ottman, 1998). Thus production methods are adapted to reduce toxic wastes, product features are improved to provide enhanced value in terms of improved health, effective disposal and packaging is modified to provide environment friendly packaging. These initiatives also involve a growing consideration for increased reusability and recycling of products after use and optimised use of resources during the production process. The success of such initiatives is hence based on closer integration between the firm and the consumers (Seretny and Seretny, 2012). Evolution of research in area of sustainable marketing A study by Martin Charter, Ken Peattie, Jacquelyn Ottman, and Michael Polonsky (2002) observed that customers, firms and public sector organisations, employees and investors favour companies who are socially responsible and take adequate measures to conserve and contribute to environmental protection. The key aspects driving the popularity and need for research in areas of sustainable organisational growth and development are the growing concern for rapid depletion of natural resources, population growth, increasing pollution levels, and the ecological damages caused by growing release of industrial toxic wastes. Economic growth and development of a region are based on the exploitation of its existing natural resources which are limited. Uncontrolled use of these resources may result in depletion of the resources eventually. Global warming and environmental degradation have sparked the concept and need for sustainable business practices (Reutlinger, 2012). Research in the area of sustainable marketing evolved further to include the concept of green marketing and a deeper exploration of environmental dimension related to business activities (Chabowski et al., 2011). Works in this direction emphasized the role regulators, top management and entrepreneurs could play in successful implementation of these concepts. This type of marketing approach opened new business opportunities in terms of catering to the demands of the environment friendly customers. Organic foods for improved nutritional value, fuel efficient lubricants to run vehicles, energy saving appliances for reduced electricity consumption are some of the business sectors that have become the latest fad with consumers. Consumers in these sectors are willing to pay premium prices for such products (Reutlinger, 2012). Earlier research works in the context of sustainable development and sustainable marketing focused on the ethical decision making aspect and citizenship behaviour that provided a deeper insight into the significance of decision making patterns. More recent works on sustainability offered a deeper analysis of organizational behaviour, employee commitment and the role of external agencies in driving the sustainability efforts of the firm (Chabowski et al., 2011). “Sensitivity to the social, ethical and environmental context in which a firm operates is simply good business and certainly a pre-requisite for long term legitimacy and survival” (Charter et al., 2002, p8). These considerations are more recent observations on what drives the firm’s marketing operations that work in close cooperation with other departments to produce, package and sell sustainable products. However, this is still an evolving concept that has not yet gained rapid momentum. Belz and Peattie (2009) in their study highlighted the role played by developing countries like India, China and others which are witnessing accelerated pace of economic growth and development in supporting the need for sustainable marketing initiatives. The unprecedented growth has not only helped in elevating the standards of living but has also created a new breed of consumers who want to have everything. Consumerism culture does not pay much significance to environmental friendly aspects of the products they use or the ecological implications of the products that are sold in the markets. The focus of such consumerism culture is on possessing the latest technology and the trendy items that are sold in the upmarket regions (Belz and Peattie, 2009). Organisations pursue different strategic plans to implement sustainable development practices into the marketing of its goods and services. However, the adoption of such practices present significant challenges as highlighted in the works of Baker and Hart (2008). The short term challenges involve the social and ecological demands of the markets and its influences on shifting consumer needs, conformance to new regulations and growing concern about the socio-environmental impacts of the business. The long term challenges involve the changes within management practices in pursuit of sustainability and its implications on the organisational functions. The concept entails the principles of “using natural resources at a rate at which environmental systems or human activity can replenish them” and “producing pollution and waste at a rate which can be absorbed by environmental systems without impairing their viability” (Baker and Hart, 2008, p563). Research studies in the area of sustainable marketing have explained the evolution of sustainable marketing as a holistic approach to identifying and satisfying the needs of the customers through effective integration of its production, sales, and promotion and packaging activities (Singh and Pandey, 2012). Singh and Pandey (2012) place emphasis on green marketing concepts since there is a growing demand for sustainable, eco-friendly and socially responsible products. However, the real challenge lies in creating customer awareness and expanding the scope of the sales of sustainable products. The organisation should also focus its strategies on the innovative use of the 4 Ps of marketing – product, price, promotion and place. The product should imbibe the principles of sustainability in terms of resource utilisation and environmental pollution. The price should appeal to the consumer senses in terms of value offered while the promotion aspect must focus on communicating the ecological, social, and environmental benefits attached to the product to the end consumer. The place is an important decisive factor since a customer will not go out of the way to make the purchase of a green product (Singh and Pandey, 2012). However, mere theoretical frameworks and observations are not sufficient to explain these anomalies. Research studies on the issue of sustainable marketing practices have failed to explain its challenges in application and the measures that can be taken by firms to achieve the goals of sustainability. Practical insights provided by Deloitte reports on Green Shopper (2009) observe that while nearly 47 percent of the shoppers looked for green products, only 22 percent of them purchased one. This can be accounted to inadequate information available to customers, concerns about the credibility and performance of the products, and lack of visibility. Remaining customers are unaware of the green product concepts and what it entails for the consumers. Thus, lack of awareness and information form the basic challenges faced by firms selling green products. Seretny and Seretny (2012) in their works on sustainable marketing explain that incorporating the principles of green marketing can open the business to new market opportunities, innovative product launches, differentiate its products in the market on the basis of price, value and achieve cost advantages. However, an effective outcome in this context is achievable only when the concept and principle of sustainability “permeates the firm’s corporate strategy from the top down, so all areas in the firm can align their environmental goals in the same direction for the greatest effectiveness” (Boone and Kutz, 2013, p26). A top down integration is one of the primary pre-requisites for achieving the desired goals and objectives. Illustrative examples Most global organisations are adopting sustainable marketing concepts to promote ethical practices and conform to international standards of environmental protection. Various standards and regulations have been drawn by global governance bodies in an attempt to improve business practices and ensure their acceptance of globally defined standards of operation. Jaguar Land Rover (JLR) was one of the first organisations to gain the ISO14001 standards and the company has displayed its dedication to sustainable growth and development initiatives. The results of these initiatives are evident in their environment friendly cars that minimise environmental pollution, reduces carbon emissions at the manufacturing stage and technology features that help in reducing accidents, saving lives, fuel efficient vehicles (CIMA, 2009). The case study on JLR highlights the effectiveness of incorporating such management practices in terms of growing value for the amount invested in implementing advanced technology, optimizing the manufacturing processes and delivering high value eco-friendly and sustainable products to the end consumers. The company has imbibed the concepts of sustainability at each stage of product development, manufacturing, sales and promotion of its products and this is due to the dedicated focus of its top management that spreads its values across each level of its governance structure (CIMA, 2009). Implications of practice The paper has highlighted the evolution research in the area of emerging sustainable marketing concepts, the associated challenges, perspectives and dimensions attached to the sales and purchase of green products. While the present business conditions warrant a deeper understanding and adoption of such concepts, there are numerous challenges to the adoption and implementation of sustainable marketing practices. Top management, governance structures, and the workforce need a deeper understanding of how such frameworks can impact their business in terms of profits, opportunities, growth and performance. Research in this context is still in its nascent stages and increased focus is required to permeate various industry sectors and consumer minds. Companies like JLR have successfully established the business viability and feasibility of adopting this concept. What remains to be seen is its effective application at workplace and a wider acceptance by the consumers who can benefit from the high value proposition of the products they purchase. References Baker, M.J. and Hart, S.J. (2008), The marketing book, Oxford. Belz, F.M. and Peattie, K. (2009), Sustainable marketing: a global perspective, John Wiley & Sons. Chabowski, B.R., Mena, J.A., and Gonzalez-Padron, T.L. (2011), The structure of sustainability research in marketing, 1958-2008: a basis for future research opportunities, Journal of the Academy Marketing Science, Vol 39, No.1, pp 55-70. 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