Marketing Sustainability - Case Study Example

MARKETING SUSTAINABILITY – CASE STUDY OF TESCO AND SAINSBURY TABLE OF CONTENTS TABLE OF CONTENTS 2 Introduction 3 Sustainability in Marketing 3 Sustainable Operational process 5 Developing sustainability: Tesco and Sainsbury 6 Conclusion 8 Reference List 9 Introduction According to Naciri (2009), business sustainability is basically controlling the triple bottom line in business by which companies can manage their social and environmental risks, opportunities and obligations. Business sustainability requires firms to formulate their business strategy more ethically. Retail organisations in the UK market are provided with a variety of requirements for the sustainability of different organisational group. Consumers always get influenced by the marketing strategy, which is ethically correct in regards to the production and sustainability (Cremer and Trenbrunsel, 2011). Retail sectors are driving sustainability in their business by maintaining supply chain from top to bottom. It helps them meet the environmental and social goals. Sustainability practice in business includes CSR insight evaluation to improve the environmental and social performance. It is certainly a challenge for the retailers to meet customer’s expectations. Consumers’ demand for simple and quick action often complies with the sustainability issues. Several strategies adopted by these companies to overcome the sustainability issues in business practice are discussed in the study. Sustainability in Marketing In business, sustainability not only means eco-friendly operation, but also eco-effectiveness (Paine, 2009). Sustainability absolutely signifies marketing and branding products as per the customer’s demand, thereby creating a strong base of ethical consumers. Sustainability needs in the UK retail market are all about ‘greening’, as the future of this business solely depends on a healthy and productive eco-system. Sustainability also encompasses corporate philanthropy if it is strategic. Gradually, the retail sector in the UK is becoming more consumers-led and this is the main reason behind the boom in its advertising. Product choice ranges are increasing every year with development of new products (Vitell and Paolillo, 2008). The social dimension of sustainable consumption requires more attention of the producer in devising their product marketing strategy. Thus, retail companies in the UK market tend to use more sophisticated approach in targeting their customer base. In order to understand key initiatives and trends in achieving sustainability by the retail organisations, it is essential to evaluate the marketing strategies adopted by Tesco and Sainsbury (Borzaga and Becchetti, 2010). Being a leading retail organisation in UK market, Tesco has extended its business activities beyond achieving business efficiencies. Gradually, Tesco is becoming more integrated into framing sustainable business strategy and plans to become zero-carbon by the year 2050 without any offsetting. They have been given major focus on huge emission cut, zero carbon stores, green product and carbon levelling in the part of their package etc. Tesco is now playing a leading role in bringing the problem of climate change to the customers, suppliers and competitors throughout the globe. The company has taken several initiatives in developing new collaboration in cutting carbon via its supply chain management. Tesco aims to reduce emission of their product by 30% within the year 2020 (Brandingasia, 2014). The philosophy of sustainability starts with the brand mission, and centred at adopting positive changes. Thus, the company has designed all its products in such a way that they can positively contribute to the environment. The company is also trying to eliminate the idea of waste by focusing more on innovative materials that helps to eliminate non recyclable waste materials. On the other hand, marketing strategies adopted by Sainsbury is quite different from the strategies followed by Tesco. One of the prime goals of the company is to become the most trusted retailer where people love to work and shop (Campbell, 2009). 20*20 sustainability commitment is a significant part of their business success. The management team at Sainsbury make continuous support in delivering 20*20 sustainability plan through effective trading and capital allocation process. Since, the year 2007, the company is making continuous investment to reduce energy and adopt renewable energy projects in their stores. Every year they measure overall cost, energy and carbon achieved by the company through a project investment review. In short, Sainsbury has given more focus on energy reduction activities and has also delivered energy reduction of 11.1% in 2010 (Sainsbury 2014). Sustainable Operational process Operational process refers to activities, decisions and responsibility taken by an organisation to manage purchase, production and distribution of the products and service. Sustainability in the operational process is very important to identify and meet changing needs of the customers over a certain period of time (Kimber and Lipton, 2009). Increasing efficiency in the production process includes rise in production efficiency, utilise available capacities and achieve business objectives. Sustainability in the production process is very essential to maximize business return and thus, firms become more capable to offer product to the customer at a lower price while maintaining the profit margin. Tesco has taken several initiatives to signify market opportunity and protect their business environment. Some of these initiatives include, minimizing emission in their production process and making efficient use of scarce resource in their operational process. Managers at Tesco always support their customer and staff by providing hygienic food products (Brandingasia, 2014). They specify clear information on all nutritional value about their product on the upper front of their product-packaging so that the people can understand nutritious value of Tesco’s product. On the contrary, Sainsbury has adopted a long term business strategy in terms of delivering the most trusted retail product to their customers. In doing so, they have given more focus on five areas, such as great food, complementary channels and service, developing new business, compelling general merchandise and clothing and creating property value. Sainsbury offers great quality service to their customer at fair price (Hartman and Werhane, 2009). Quality and value for Sainsbury’s product and their strong ethical standard has differentiated them from other retail markets in UK. Developing sustainability: Tesco and Sainsbury The sustainable advertising is also a part of sustainable business process. The sustainable marketing mix includes instant consumer solution, communication, consumer cost and convenience (Campbell, 2006). Retail organisation, like Tesco and Sainsbury have also focused on promoting sustainable advertisement strategy to avert their customers towards their sustainable products, service and action. They not only have considered environmental issue, but also the entire lifecycle of their products. Communication strategies followed by these two companies in order to promote sustainable marketing strategy are discussed below. Advertisement is a general way to attract customers from mass media (Hond, 2009). The advertisement strategy followed by Tesco is integrated to the multimillion pound advertisement process to win back British shopper. The Red Brick Road has designed Tesco’s promotional strategy to appeal customer from domestic as well as international market and work on trade communication. Some of the common objective of marketing communication in Tesco is to generate awareness, motivating buying intention and make sustainable connection with its customers. Tesco has given more emphasis on ensuring truth in their advertisement. The company always provides advertisement code with their products to prevent their customer from misleading. Apart from that, they also ensure ethical behaviour in their advertisement so that marketing messages are formed by decent, legal and truthful substance. The social messages provided by the company strictly avoid the aspect of green washing and reference to the false social responsibility claims. The promotional strategy of Tesco says that, “Every little helps” which signifies that Tesco really care for its customer’s value (Idg, 2014). Initially, global expansion strategy of Tesco failed to gain huge success. When it entered in South Korea and created a joint venture with Samsung, Tesco has gained an in-depth knowledge on global market expansion strategy (O’Toole and Mayer, 2010). From that time, Tesco began to expand its market in international market according to the preference of international consumer. Rapid global expansion strategy of Tesco makes it as a second largest retailer worldwide. In contrast, Sainsbury’s advertisement strategy aims at transporting product with more efficiency, focus on product quality of its offer, raising customer value and maintaining a point score over Tesco. Sainsbury has invested lots of money to improve its brand image and form a long-term financial commitment to the CSR activities. Ethical aspects in its business strategy made Sainsbury the leading fair trade retailer in UK. The company has given more emphasis on selling only fair trade to its customers, and its global reach has been ensured by its CSR activities. About a decade ago, Sainsbury has owned a supply chain in US and Egypt; however, it faces several problems to expand its market globally. Conclusion The paper has focused on understanding various dimension of marketing strategy followed by two well-reputed retail organisation in the UK economy, namely Tesco and Sainsbury, in the context of developing sustainability in marketing process. In spite of following different marketing strategy in the perspective of ensuring sustainability in their business process, basic aims are quite similar. Managers of these companies are expected to include ethical consideration to develop structure of business, operation process and ways of working and promotional strategy that will support organisation’s sustainability objectives. Strong reputation of these companies is highly supported by their ethical business policy and customer support. Reference List Borzaga, C. and Becchetti, L., 2010. The Economics of Social Responsibility. 6th ed. New York: Routledge. Brandingasia., 2014. Tesco – The br & experience is everything. [online] Available at: [Accessed 8 October 2014] Campbell, J. L., 2006. Institutional Analysis & the Paradox of Corporate Social Responsibility. American Behavioral Scientist, 49(7), pp. 925-938 Campbell, J. L., 2009. Why would corporations behave in socially responsible ways? An institutional theory of corporate social responsibility. Academy of Management Review, 32, pp. 946–967. Cremer, D. and Trenbrunsel, D. 2011. Behavioural Business Ethics: Ideas on an Emerging Field. 4th ed. New York: Routledge Hartman, C. and Werhane, P., 2009. The Global Corporation: Sustainable, Effective, Ethical Business Practices. 3rd ed. New York: Routledge Hond., F., et. al., 2009. Managing Corporate Social Responsibility in action. 3rd ed. London: Thomson. Idg 2014, Tesco & Sociery Report 2014. [online] Available at: [Accessed 8 October 2014] Kimber D. and Lipton P., 2009. Corporate Governance & Business Ethics in the Asia-Pacific Region, Business & Society, 44(2). Naciri, A., 2009. Internal & External Aspects of Corporate Governance. 8th ed. New York: Routledge. O’Toole, J. and Mayer, D., 2010 Good Business. Exercising Effective Ethical Leadership. 4th ed. London: Routledge. Paine, L. S., 2009. Corporate Policy & the Ethics of Competitive Intelligence Gathering, Journal of Business Ethics, 10(9), pp. 423-436 Sainsbury 2014, J Sainsbury Plc. [online] Available at: [Accessed 8 October 2014] Vitell, S.C. and Paolillo, J.G.P. 2008. A Cross-Cultural Study of the Antecedents of the Perceived Role of Ethics & Social Responsibility. Business Ethics: A European Review, 13, pp.185-199 Read More