Shell as a Societal Marketer and Scio-Responsible Corporation - Case Study Example

 Shell as a Societal Marketer & Scio-Responsible Corporation Satisfaction, a key word in marketing has been transformed into delighting the customers. This means that a Marketer not only has to meet the customer’s expectations but to exceed the expectations of his target market customers in order to delight the customers. This phenomenon has become so common universally that customer expects the unexpected. Products in order to be successful are being tailored in a manner that surprise element of extra benefits has become an obligation for the marketer. Pressure of production and innovative features inclusion has compelled the significance of marketing into the public eye. This pressure tends to be a continual factor. ‘Production pressure will markedly increase in the future, making marketing even more vital for success.’ (Drucker 1991, p.2-10) It is, however, argumentative if a firm is almost perfect in its activities and making a fabulous profit, whether its activities can be termed appreciative in the local or global scenario which is highlighted by different societal injustices such as shortage of food, pollution and environmental decline etc. The exigency of societal necessities has paved its way into the concept of marketing and as such a firm has to be more persuasive in its corporate social responsibility and applying societal marketing concept as a replacement for marketing concept. ‘Kotler (2000, p.25) states societal marketing as, ‘The societal marketing concept holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well-being’. Companies today are more social in their activities and more acquainted with their corporate social responsibilities. ‘The societal marketing concept urges the marketers to be more social and ethical in their practices’. (Kotler 2000, p. 25) ‘Consider the following criticism: The fast-food hamburger industry offers tasty but unhealthy food. The hamburgers have a high fat content, and the restaurants promote fries and pies, two products high in starch and fat. The products are wrapped in convenient packaging, which leads to much waste. In satisfying consumer wants, these restaurants may be hurting consumer health and causing environmental problems (Kotler 2000. p-25) It is worth mentioning to call to mind the President Kennedy’s 1962 ‘Consumer bills of rights’. ‘McCarthy recalls for us some of the canons of that bill: a) The right to safety- to be protected against the marketing of goods which are hazardous to health and life b) The right to be informed- to be protected against fraudulent, deceitful, or grossly misinformation, advertising, labeling or other practices. c) The right to choose – to be assured, whenever possible, of access to a variety of products and services at competitive prices d) The right to be heard – to be assured that consumer interests will receive full and sympathetic consideration in the formulation of government policy.’ (McCarthy 1978, p.97) Firms are positioning themselves as a role player of corporate social responsible. The customers in global market value this role and as such differentiation in marketing activities are being accomplished by the marketers. Ultimately the goals of the firm are being achieved in a gratified environment. Corporate social responsibility has become the standard and the belief. One of the most important tasks in this respect is of environmental surveillance-serving, in effect, much like the periscope of a submarine. The continued growth of the company, if not survival, depends on their corporate social responsibility. ‘Corporate Social Responsibility (CSR) is a concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on customers, employees, shareholders, communities and the environment in all aspects of their operations. This obligation is seen to extend beyond the statutory obligation to comply with legislation and sees organizations voluntarily taking further to improve the quality of life for employees and their families as well as for the local community and society at large.’ (www.en.wikipedia.org/wiki/Corporate_social_responsibility) A burning question which may be asked in this context: what are the duties of a firm to fulfil its social responsibility? It is hard to deny that investors watch the bottom line. They seek for best possible returns. Profitability in their opinion is the prime object but the exigencies of social responsibility urge them to reveal that their businesses have a social principle. Study of a globally recongized and operational firm such as Shell Petroleum International with respect to its claim of a societal marketeing firm may be supportive and can better explain the above mentioned two concepts. This study will also prove if this firm adheres to the prinicples of societal marketing and corporate social responsibility. Parallel to the growth of forces seeking to protect consumer from worst excesses of industrial and commercial activity has been the development of driving forces in the network of firms designed to protect the environment in which we live, the environment which we hold in trust for future generations. ‘In an unprecedented move, representatives of UAE governments, major NGOs and energy giant Shell have agreed to work towards ways of creating tripartite partnerships in sustainable development initiatives’ (Press release.UAE, 2005) A meeting was convened and attentded by different Government officials, representative of community and executives of Shell Petroleum in UAE. The role of Shell was appreciated being a corporate social responible firm endeavoring to contribute the well being of society. ‘The chief of External affairs & Competitions Department praised the role of Shell in taking initiatives by bringing together various parties from the private and public sector, along with representatives of civil society. It encourages them to be partners in endeavors that contribute to the well-being of the country. All the parties invited to the discussion are effective members of society’ (http://www.ameinfo.com/51466.html) It is worth-praising that activities of Shell acknowledge the gravity of environmental change globally. We must appreciate that they attempt to cover up their deficiencies in this area. They are always ready to face global challenges to remain compatible with the requirements of environmental change. Shell companies in a global scenario through development in obtaining new business and a fair usage of their resources rather effective use of resources in environmental impact. Company has a tendency to cooperate with the Governments, public welfare organizations and contribute to the social cause wherever they operate. A company to be engaged in societal marketing must have certain objectives towards understanding its corporate social responsibility. Shell is found to be promoting and celebrating a diverse workforce, caring about the environment, advocating human rights, employing high health, safety standards and supporting work life balance. The acceptance of corporate social responsibility by Shell is acclaimed by them as the source of their tremendous growth and achievements. This phenomenon is pointed by Mr. Ansingh, Country Head in Saudi Arabia highlighting this fact ‘A license to operate is not enough. What business really needs is a license to grow. You need to earn so much social respect that society actually prefers you to grow more rapidly than any other. As such we take a long, hard look at the needs of people and governments. Then we develop the technologies and applications that will meet those needs and expectations- in ways that are economically, environmentally and socially viable. In this way, we make a real contribution to society and create and maintain genuine partnerships that foster an environment that will benefit and grow our businesses.’ (Anguish, 2004) If we review the meaning of marketing as we have come to understand it, the impact of consumers and environmental concern should pose no threat to it as a business philosophy. The practical experience and implementation of this philosophy make us understand the fact that Shell is the second largest energy company in Europe. This is not an over-night achievement. If a company adheres to their corporate social responsibility then only a firm can enjoy the top positions in their relevant category. Societal marketing along-with the corporate social responsibility help achieve a firm its main goal of profit. If consumers believe that their social rights are protected by a firm they will have a pleasure to deal with that particular firm. Positioning of a societal marketing firm will be better than a pure marketing firm: ‘The pure marketing concept constitutes an adequate business philosophy in an age of environmental deterioration, resource shortages, explosive population growth, world-wide inflation and neglected social services.’(Kotler, 1983) Therefore Shell seems to agree with the views of Kotler as ‘they invited the schools across the UAE to enter the 10th Shell Better Environment Award (BEA), the country’s foremost initiative aimed at raising awareness of environmental issues and encouraging schoolchildren to work on projects that can contribute to the preservation of the environment.’ (Press release UAE, 2004) ‘Big business is increasingly called on to play its part in the quest for sustainable development. To this end UNESCO is gradually opening its doors to the corporate sector, inviting firms into a partnership that pays long-term dividends.’ (Unesco Sources, Jan.2000)(r.13) A long run consumer welfare is to be among the foremost factors. The public opinion is now justifiably demanding that organizations must understand that the social framework in which they operate is at least as important as the political, economic, legal and technological frameworks. Firms in their decision-making has a social as well as an economic cost-that consumer and environment welfare are as decisive for success as sales turnover, costs and profits. Shell seems to incur such kinds of social costs to a larger extent. But the corporate social responsibility which is fixed on them demands such costs. But as mentioned earlier these costs are in fact long term investments which pay ultimately. ‘The growing importance of Corporate Social Responsibility (CSR) was emphasised today as over 30 experts from around the world addressed the significance of this business practice at the first Middle East CSR Summit in Dubai - organised by Shell and supported by Dubai Development and Investment Authority’ (http://www.ameinfo.com/38389.html) The vibrant nature of human rights require the ongoing evolution in international morality, laws and ethics. The growth in the destruction of evironment and exploitation of human rights calls for the human rights laws to be more compatible and should include the environmental protections. There is a non breakable relationship between human rights and environmental health in many areas. Since Shell is operating in a global perspective we should also take into account their uniformity of policy being as a societal marketer and socio responsible firm. Unfortantely in some third world countries, the answer is NO. Globalization in fact can transform in a positive manner a society in the field of economic growth. The standard of living. Their life style, even their thinking and ultimately the culture can be retransformed many a times. Several countries in the world are infact the victims of enviornmental damages. The international community should work together to exclude such factors and sources which are damaging the evnironmental surroundings. Especailly the multi-national giants as Shell Petroleum, should be monitored and controlled by the respective Governments and public welfare organizations so these MNCs play positive role of a social marketer instead of just a marketer making profits at the cost of society and people. If we study this role of Shell globally we shall find some regions in the world, where Shell is accused for damaging the enviornment and operating against human rights. Let us focus the social activities of Shell, for instance, in Nigeria. Shell Petroeum has been alleged for being engaged in some serious charges which include: crimes against humanity, torture, arbitrary detention and racketting. Shell, however on their web site has endeavored to defend its position in this regard. ‘We have never provided any arms for soldiers in Nigeria, nor would we, and we have no connection with the military operations in Ogoni Land,’( DELTA News, 1996) In Niegeria a discovery of vast reserves of petroleum was made in the 1950s. Since then oil has been playing a mjor role in the ecnomic growth of the country. Nigera earns more than 85% of its foreign exchange from the sale of oil in the world market. MNCs like Shell control an average of 60% of the domestic oil market in Nigeria. They dominate in exploration of oil, its drilling and shipping. This huge revenue should benefit more the Nigerian people than the companies like Shell. The irony is; that situation is other way round. The MNCs are making huge profits and enjoying the benefits and a very low quantity of revenue and benfits are being passed to Nigerian people. This earning is coming at the cost of the people of Nigeria. People in Nigera are not acting as a spectator. They portested in the past and continue to do so. As Shell is earning a huge revenue from the drilling and production of oil, it has to certainly reinvest some percentage of profit back in the country. But they are not doing so and as such being condemned on their role as societal marketer. ‘Report of Chief Executive for the year 2005 highlights a serious problem that three employees and 33 contractors lost their lives at work in 2005. Ten of these fatalities occurred in road accidents, despite their major programmes in this area.’( Chief Executive letter, 2005). Not to forget motto of the firm which is ‘ Profit before employee safety’. (royaldutchshellplc.com) However their motto contradicts with the above-mentioned report. In some areas in Africa, South America and in some Asian countries social critics are of the view that Shell has one priority which is just to earn revenue, no matter how it is coming. Whether the revenue is being generated at the cost of pollution or collision with brutal administration or by exploiting people and to adopt strategies which can censor their critics It is, however quite interesting that Shell has never tried to challenge the severe allegations against it-formally. It is also worth mentioning that some journalists have also complained about the ‘silent revenge’ taken against them if they have ever tried to report any wrongdoing by the company. ‘Bad publicity’ is always detested by Shell authorities. Taking the above examples we have to analyze the role of Shell as societal marketer globally. Mostly in the third world countries the social and environmental cost of oil production is immeasurable. What are then the most important factors which are affected by such cost and are included in it? In answer to this question we may mention pollution both of air and dringking water, the loss of soil fertility, destruction of wild life etc. CONCLUSION We may conclude that societal marketing concept certainly holds an organization task to satisfy the demands and interests of its target markets. In this aspect Shell Petroleum firmly adheres to engage itself efficiently, responsibly and profitably in the oil, gas, power, chemicals and other selected businesses. Despite its primary mission to earn profit, the company strives to advocate the fact that their business has a social conscience. They spent considerable amount of their earnings on social issues like global warming, environmental security-claiming themselves to operate as excellent corporate citizens. At shell- the most challenging task seems to be the development of technology, and applications that will meet the customers’ needs and expectations. We may appreciate their utmost contribution to society, to promote an environment, which will definitely benefit and grow their business in future. This study also highlights certain obligations- on the corporate giants like Shell for instance, social and ethical etc so the corporate social responsibility lies on them can be fulfilled. In the present competitive market, business must, of course, is attractive to those groups whose trust and goodwill are essential to their economic success. Inconsistently the role of Shell Petroleum as Societal Marketer and Corporate social responsible is not standardized. In the developed countries of Europe, USA, our study shows the above picture. As stated above Shell is the second largest energy company in Europe. But this role comes in the perspective of marketing concept which is just to make profits. A company if, is claiming that they really care about social environment, has to standardized their activities globally. But this is not the case. It seems that an overall global view in social perspective is not so much appreciative. In some countries of South America, Africa and Asia, Shell tends to breach its own principles. They try to position themselves as Societal Marketer but we have highlighted their negative role in countries like Nigeria where also they are bound to protect environment, promote human rights and reinvest some of their profits back into the local communities. That is why a research in 2002 included Shell in ‘the 10 worst corporations of 2002 and termed these ten firms including Shell petroleum as Bad Apples in a Rotten System’ (The multinational Monitor, 2002) Ironically, in these regions, behind the mask of their chanting slogans to secure or to safeguard social environment, they have been responsible for an ‘ecological genocide’ on Mother Earth. Does Shell care? Does Shell show humanity? How can a company care? How can company have human feeling? Every question is in fact a Million Dollar question. So we could conclude in this manner that in the regions where the role of Shell Petroleum as societal marketer is being criticized, the company would hopefully endeavor to prevent all such acts which are tarnishing its image globally thereby making their remarkable accomplishments in other regions less appreciative. As such they have to standardized their role globally if they are to position themselves as societal marketer and corporate social responsible REFERENCE LIST DELTA News and Backgound on Ogoni, Shell and Nigeria. Newsletter# November 2, 1996 Drucker, P. The emerging theory of Manufacturing. Boston, Mass: Harvard Business Review paperback, No.90033,1991, pp.2-10 Floris Ansingh, President and Chief Executive of Shell Companies in Saudi ArabiaUnited Arab Emirates: Thursday, November 25 - 2004 at 16:01 Kotler, P. Marketing Management. The millennium edition 2000 p.25 Kotler, P. Principles of Marketing, Prentice Hall, 2nd edn,1983, p.20 McCarthy, EJ. Basic Marketing- A Managerial Approach. Homewood, III: Irwin, 6th edn, 1978, p97 Shell sustainability report 2005 www. energy vortex.com The Multinational Monitor, December 2002-Volume23-Number 12 United Arab Emirates: Sunday, January 02 - 2005 at 12:28. Press release United Arab Emirates: Wednesday, September 29-2004 at 16:16 Unesco Sources, January, 2000. unesdoc.unesco.org/images/0011/001185/118542e.pdf (http://www.ameinfo.com/51466.html www.royaldutchshellplc.com www. en.wikipedia.org/wiki/Corporate_social_responsibility Read More