Course : Business Sustainability
Effective Period: September 2023
Implementation in
Marketing
Session 19-20
Thank you
Acknowledgement
These slides have been adapted from:
Nada R. Sanders (2019). Foundations of
Sustainable Business: Theory, Function,
and Strategy. Second Edition. WILEY.
ISBN: 978-1-119-57755-3
Learning Outcomes
• LO 3: Create the implementation
framework for sustainable business
Introduction
• We need to harness the creativity and the
sophistication of marketing, and its methodologies, for
human heatth and environmental sustainability.
- Ed Mayo, CHIEF EXECUTIVE,
NATIONAL CONSUMER COUNCIL (2005)
• Organizalions bear economic, legal, and ethical
obligations to provide useful information about the
risks and benefits of their products, policies, and
services, [...] Financial analysts estimate that 70% of a
typical private firm’s assets are intangibles, like
goodwill, that can be lost when communications fail.
- U.S. Food and Drug Administration
Introduction: Marketing
Sustainability
Introduction: Marketing
Sustainability
• Marketing a product or service means introducing an
offering to the market in such a way as to inform
prospective customers of the attributes of the product
or service and inducing them into purchasing it.
• Sustainable marketing has similar goals as
traditional marketing—to encourage sales. However, it
differs in important aspects because of the unique
claims made by companies offering sustainable
products or services. Marketing sustainability means
addressing the benefits of a product or service and
consumer expectations about the company’s social,
economic, or environmental responsibility.
Segmenting the Market for
Sustainable Products
The Natural Marketing Institute found that adult
consumers across developed countries can be segmented
according to their attitude toward sustainability issues into
the following categories:
(1) Lifestyle of Health and Sustainability (LOHAS);
(2) Naturalities;
(3) Drifters;
(4) Conventionals; and
(5) Unconcerneds.
Legal and Ethical
Boundaries
Federal Trade Commission
Policies
• Deception Policy Statement: An ad is deceptive if
it contains (or omits) information that is likely to
mislead consumers acting reasonably under the
circumstances, and it is material in the sense that the
deceptive information is important to a consumer’s
decision to buy or use the product.
• Unfairness Policy Statement: An ad or business
practice
is unfair if it is likely to cause substantial consumer
injury that a consumer could not reasonably avoid, and
the risk of injury is not outweighed by the benefit to
consumers.
• Endorsement Guides: Guidelines prepared by the
FTC
that apply truth-in-advertising restrictions to third-
party seals of approval or third-party certifications.
Product/Process Information
Distinction
• Product-Related Information: Facts about a
product’s attributes, such as whether it is safe,
whether performs its intended purpose, what
ingredients it contains, and how much it costs
• Process-Related Information: Facts about the
methods and labor practices that went into producing
a consumer good.
Greenwashing
• Greenwashing is the term used to describe the
representation that a product or service is more
socially or environmentally friendly than it actually is.
The term greenwashing was coined by the
environmentalist Jay Westerveld who criticized the
practice of hotels encouraging guests to save water by
declining fresh towels while making no effort to
conserve resources as a company such as by recycling
grey water or improving energy efficiency.
• Collaboration between Enviro Media Social Marketing
and the University of Oregon developed the
Greenwashing Index. This defines greenwashing as the
act of a company or organization spending more time
and money trying to convince customers that they are
“green” than actually implementing business practices
that minimize their environmental impact.
Strategy for Marketing
Sustainability
Sustainability Marketing
Principles
• Perform market research to discern the environmental
and social concerns of the company’s customers.
• Develop products and services that have superior
social and environmental performance relative to
industry standards.
• Instead of trying to convince consumers to buy things
they don’t need, develop brands with clear practical
benefits related to important issues affecting their life.
• Strive for transparency and communicate clearly the
company’s commitment to sustainability.
Sustainability Marketing
Principles (2)
• Instead of reacting to environmental or social problems
when they become crises, proactively seek out these
issues and make reasonable efforts to resolving them.
• Develop a holistic, systems-based perspective on the
company’s situation, integrating corporate inputs and
outputs with the social, economic, and environmental
systems and resulting feedback loops.
• Design more sustainable products and services,
promote responsible product use, and facilitate
disposal practices.
Brand Development
• Line Extension: When a company introduces new
items in the same category under the same brand.
• Brand Extension: Using a successful brand to launch
new or modified products in a different category.
• Multi-Brand: Launching two or more sustainable
brands within the same product category.
• New Brand: Entering a new product category with a
new product.
Challenges
• Indirect benefits
• Trade-offs
• Target audience
• Cost
• Salience
• Credibility
Certification Programs
Guidelines for Third-Party
Certification Programs
• Marketers should disclose any material connections to
the certifying organization. Marketers should not use
environmental certifications or seals that do not clearly
convey the basis for the certification, because the
seals or certifications are likely to convey general
environmental benefits.
• To prevent deception, marketers using seals or
certifications that don’t convey the basis for the
certification should identify, clearly and prominently,
specific environmental benefits.
Guidelines for Third-Party
Certification Programs (2)
• Marketers can qualify certifications based on attributes
that are too numerous to disclose by saying, “Virtually
all products impact the environment. For details on
which attributes we evaluated, go to [a website that
discusses this product].” The marketer should make
sure that the website provides the referenced
information, and that the information is truthful and
accurate.
• A marketer with a third-party certification still must
substantiate all express and implied claims.
Certification Design
• Objectivity: Based on facts rather than intentions.
• Specificity: Criteria are defined clearly to avoid
ambiguity.
• Consistency: Criteria are the same across time.
• Functional: Equivalency Comparisons are made
between like-in-kind products only.
• Relevancy: Certification contains only information
that is relevant to the customer.
• Sufficiency: Certification contains no more
information than is necessary to avoid information
overload.
• Efficacy: Certification allows consumers to incorporate
information into purchasing decisions in real time.
Discussion
General Questions
1. Select a sustainable product and describe its
packaging.
2. What positive inferences have you made about the
product from the packaging?
3. Are these inferences justified or is this an example of
the halo effect in action?
Questions for Project
Assignment
1. How can company use sustainable marketing?
2. How should the company’s marketing strategy differ
from its original marketing strategy?
3. How should the marketing sustainability strategy be
tailored for each of the five categories of consumers
described in this chapter?
4. Explain the difference between “product information”
and “process information” in the company.
5. What are sustainability certifications should the
company apply?
Reference
Nada R. Sanders (2019). Foundations
of Sustainable Business: Theory,
Function, and Strategy. Second
Edition. WILEY.
ISBN: 978-1-119-57755-3
