Chapter 20

SUSTAINABLE MARKETING: SOCIAL

RESPONSIBILITY AND ETHICS

MARKETING STARTER: CHAPTER 20

UNILEVER: Creating a Better Future Every Day

CHAPTER OVERVIEW
Use Power Point Slide 20-1 here

In this final chapter, we look at the concepts of sustainable marketing, meeting the needs of
consumers, businesses, and society—now and in the future—through socially and
environmentally responsible marketing actions.
The chapter begins with a definition of sustainable marketing and then looks at some common
criticisms of marketing as it impacts individual consumers and other businesses. Next, it covers
consumerism, environmentalism, and other citizen and public actions that promote sustainable
marketing.
Finally, the chapter looks at how companies themselves benefit from proactively pursuing
sustainable marketing practices that bring value not just to individual customers but also to
society as a whole.
Sustainable marketing actions are more than just doing the right thing; they are also good for
business.

CHAPTER OBJECTIVES
Use Power Point Slide 20-3 here

1. Define sustainable marketing and discuss its importance.

2. Identify the major social criticisms of marketing.
3. Define consumerism and environmentalism and explain how they affect
marketing strategies.
4. Describe the principles of sustainable marketing.
5. Explain the role of ethics in marketing.

CHAPTER OUTLINE
p. 580 INTRODUCTION
p. 581

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PPT 20-2 Unilever made a greater commitment to environmental Photo: Unilever
responsibility after Paul Polman took over as CEO. While it
already had programs in place, its new Sustainable Living
Plan, launched in late 2010, was a much more aggressive
plan, with a goal to “create a better future every day for
people around the world….” According to Mr. Polman,
Unilever’s long-term commercial success depends on how
well it manages the social and environmental impact of its
actions.

The Sustainable Living Plan sets out three major social and
environmental objectives, focused on improving health and
well-being, reducing environmental impacts, and enhancing
livelihoods.

The sustainability plan is not just the right thing to do for

people and the environment, but it’s also right for the
company, and continues a path the company began long
before the introduction of the Sustainable Living Plan.
p. 582 Define sustainable marketing and discuss its importance. Learning Objective
PPT 20-4 1
SUSTAINABLE MARKETING
p. 582
Sustainable marketing calls for socially and environ- Key Term:
PPT 20-5 mentally responsible actions that meet the present needs of Sustainable
consumers and businesses while also preserving or marketing
enhancing the ability of future generations to meet their
needs. p. 583
Figure 20.1:
PPT 20-6 Figure 20.1 compares the sustainable marketing concept Sustainable
with other marketing concepts from earlier chapters. Marketing

The marketing concept recognizes that organizations thrive

from day to day by determining the current needs and wants
of target group customers and fulfilling those needs and
wants more effectively and efficiently than the competition. p. 583
Ad: McDonald’s
It focuses on meeting the company’s short-term goals by
giving customers what they want now.

However, satisfying consumer’s immediate needs and

p. 583 desires doesn’t always serve the future best interests of
either customers or the business.

Whereas the societal marketing concept considers the future

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 welfare of consumers and the strategic planning concept
considers future company needs, the sustainable marketing
concept considers both.

Sustainable marketing calls for socially and environ-

mentally responsible actions that meet both the immediate
and future needs of customers and the company.

Review Learning Objective 1: Define sustainable

marketing and discuss its importance.
for consumers, society as a whole, or other
businesses.

p. 584 Identify the major social criticisms of marketing. Learning Objective

PPT 20-7 2
SOCIAL CRITICISMS OF MARKETING

PPT 20-8 Marketing’s Impact on Individual Consumers

Consumer advocates, government agencies, and other critics

have accused marketing of harming consumers through high
prices, deceptive practices, high-pressure selling, shoddy or
unsafe products, planned obsolescence, and poor service to
disadvantaged consumers.

p. 584 High Prices

PPT 20-9
Many critics charge that the American marketing system
causes prices to be higher than they would be under more
“sensible” systems. They point to three factors—
distribution, advertising and promotion, and markup.

A long-standing charge is that greedy channel p. 584

intermediaries mark up prices beyond the value of their Photo: Claritin
services.

How do resellers answer these charges? They argue that

intermediaries do work that would otherwise have to be
done by manufacturers or consumers.

Modern marketing is accused of pushing up prices to

finance heavy advertising and sales promotion.

Critics charge that some companies markup goods

p. 597 excessively.

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 Marketers respond that most businesses try to deal fairly
with consumers because they want to build customer
relationships and repeat business.

PPT 20-10 Deceptive Practices

p. 585
Deceptive practices fall into three groups:

1. Pricing
2. Promotion p. 585
3. Packaging Photo: Deceptive
advertising
Deceptive pricing includes practices such as falsely
advertising “factory” or “wholesale” prices or indicating a
large price reduction from a phony high retail list price.

Deceptive promotion includes practices such as

misrepresenting the product’s features or performance, or
luring the customers to the store for a bargain that is out of
stock.

Deceptive packaging includes exaggerating package

contents through subtle design, using misleading labeling,
or describing size in misleading terms.

The Wheeler-Lea Act gives the Federal Trade Commission

PPT 20-11 (FTC) power to regulate unfair or deceptive acts or
practices.”

“Puffery” is defined as innocent exaggeration for effect.

p. 586 High-Pressure Selling
PPT 20-12
In most cases, marketers have little to gain from high-
pressure selling.

Such tactics may work in one-time selling situations for

short-term gain. However, most selling involves building
long-term relationships with valued customers.

Shoddy, Harmful, or Unsafe Products

p. 586
Typical product complaints: p. 586

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PPT 20-13  Products are not made well and services are not Photo: Harmful
performed well. products, soft drink
 Product safety may occur due to company
indifference, increased product complexity, and poor
quality control.
 Many products deliver little benefit, or they might
even be harmful.

Planned Obsolescence
p. 587
PPT 20-14
Critics also have charged that some companies practice
planned obsolescence, causing their products to become
p. 587
obsolete before they actually should need replacement.
Photo: Planned
obsolescence, Apple
If products don’t wear out fast enough, then companies are
charged with perceived obsolescence, changing consumer
concepts of acceptable styles to encourage more and earlier
buying.

Marketers respond that consumers like style changes; they

p. 587
get tired of the old goods and want a new look in fashion.
Or, they want the latest high-tech innovations, even if older
models still work.
PPT 20-15
Poor Service to Disadvantaged Consumers

The American marketing system has been accused of

serving disadvantaged consumers poorly. p. 588
Photo: Underserved
Critics accuse major chain retailers of “redlining,” drawing consumers
a red line around disadvantaged neighborhoods and
avoiding placing stores there.

For example, the nation’s poor areas have 30 percent fewer

supermarkets than do affluent areas. As a result, some 17
million Americans—5.6 of the population—live in low-
income areas that lack stores selling affordable and
nutritious foods.

p. 588 Marketing’s Impact on Society as a Whole

PPT 20-16 False Wants and Too Much Materialism

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 Critics have charged that the marketing system urges too
much interest in material possessions.

People are judged by what they own rather than by who p. 590
they are. Photo: Materialism

Marketers respond that these criticisms overstate the power

PPT 20-17 of business to create needs.
p. 590
Too Few Social Goods

Business has been accused of overselling private goods at

the expense of public goods.

A way must be found to restore a balance between private

and public goods. Options include:

p. 591  Making producers bear the full social costs of their

operations, or
PPT 20-18  Making consumers pay the social costs.

Cultural Pollution

Critics charge the marketing system with creating cultural

pollution.

Marketers answer the charges of “commercial noise” with

these arguments:

 Because of mass-communication channels, some ads

are bound to reach people who have no interest in
p. 591 the product and are therefore bored or annoyed.
PPT 20-19  Ads make much of television and radio free to users
and keep down the costs of magazines and
newspapers.
 Today’s consumers have alternatives.

Marketing’s Impact on Other Businesses

p. 592
Critics charge that a company’s marketing practices can Photo: Competitive
harm other companies and reduce competition. marketing practices,
Google
Three problems are involved:

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 1. Acquisitions of competitors
2. Marketing practices that create barriers to entry
3. Unfair competitive marketing practices

Review Learning Objective 2: Identify the major social

criticisms of marketing.
p. 592 Define consumerism and environmentalism and explain Learning Objective
PPT 20-20 how they affect marketing strategies. 3

CONSUMER ACTIONS TO PROMOTE

SUSTAINABLE MARKETING

Consumerism
p. 592
PPT 20-21 Consumerism is an organized movement of citizens and p. 592
government agencies to improve the rights and power of Key Term:
buyers in relation to sellers. Consumerism

Traditional sellers’ rights include:

p. 593
 The right to introduce any product in any size and
style, provided it is not hazardous to personal health
or safety; or, if it is, to include proper warnings and
controls.
 The right to charge any price for the product,
provided no discrimination exists among similar
kinds of buyers.
 The right to spend any amount to promote the
product, provided it is not defined as unfair
competition.
 The right to use any product message, provided it is
not misleading or dishonest in content or execution.
 The right to use any buying incentive programs,
p. 593 provided they are not unfair or misleading.
PPT 20-22
Traditional buyers’ rights include:

PPT 20-23  The right not to buy a product that is offered for
sale.
 The right to expect the product to be safe.
 The right to expect the product to perform as
claimed.

Consumer advocates call for the following additional

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 consumer rights:
PPT 20-24
 The right to be well informed about important
p. 593 aspects of the product.
 The right to be protected against questionable p. 593
products and marketing practices. Photo: Consumer’s
 The right to influence products and marketing desire for more
practices in ways that will improve the “quality of information
life.”
 The right to consume now in a way that will
preserve the world for future generations of
consumers.

Environmentalism

Environmentalism is an organized movement of concerned

citizens, businesses, and government agencies to protect and
improve people’s living environment.

The first wave of modern environmentalism in the United p. 593

States was driven by environmental groups and concerned Key Term:
consumers in the 1960s and 1970s. Environmentalism

The second environmentalism wave was driven by the

federal government, which passed laws and regulations
during the 1970s and 1980s governing industrial practices
impacting the environment.

The third environmentalism wave is a merging of the first

two waves in which companies are accepting more
PPT 20-25 responsibility for doing no harm to the environment.

More and more companies are adopting policies of

environmental sustainability. p. 94
Figure 20.2:
Figure 20.2 shows a grid that companies can use to gauge Environmental
their progress toward environmental sustainability. Sustainability and
Sustainable Value
Pollution prevention involves eliminating or minimizing
waste before it is created. p. 594
Key Term:
Product stewardship involves minimizing not just pollution Environmental
from production and product design but all environmental sustainability
impacts throughout the full product life cycle, and all the
while reducing costs. p. 594

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 Photo:
PPT 20-26 Design for environment (DFE) and cradle-to-cradle Environmental
practices involve thinking ahead to design products that are sustainability,
PPT 20-27 easier to recover, reuse, or recycle and developing programs adidas
to reclaim products at the end of their lives.

New clean technology. Many organizations that have made

good sustainability headway are still limited by existing
technologies. To create fully sustainable strategies, they will
need to develop innovative new technologies.

A sustainability vision serves as a guide to the future. It

shows how the company’s products and services, processes,
and policies must evolve and what new technologies must
be developed to get there. p. 596
Photo: The North
The “beyond greening” activities identified in Figure 20.2 Face
look to the future.

Public Actions to Regulate Marketing

Citizen concerns about marketing practices lead to public

attention and legislative proposals. It is complex to navigate
laws.

Review Learning Objective 3: Define consumerism and

environmentalism and explain how they affect marketing
strategies.

p. 597 Describe the principles of sustainable marketing. Learning Objective

PPT 20-28 4
BUSINESS ACTIONS TOWARD SUSTAINABLE
p. 597 MARKETING

Sustainable Marketing Principles

PPT 20-29
Under the sustainable marketing concept, a company’s
marketing should support the best long-run performance of
the marketing system. p. 597
Key Terms:
It should be guided by five sustainable marketing principles: Consumer-oriented
PPT 20-30 marketing,
Consumer-Oriented Marketing Customer value
marketing
Consumer-oriented marketing means that the company

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 should view and organize its marketing activities from the
consumer’s point of view.

Only by seeing the world through its customers’ eyes can

the company build lasting and profitable customer
relationships.
PPT 20-31
Customer Value Marketing

Customer value marketing means the company should put

most of its resources into customer value-building
marketing investments.
p. 597
By creating value for consumers, the company can capture
PPT 20-32
value from consumers in return.

Innovative Marketing

PPT 20-33 Innovative marketing requires that the company p. 597

continuously seek real product and marketing Key Terms:
improvements. Innovative
marketing, Sense-
Sense-of-Mission Marketing of-mission
marketing
p. 598 Sense-of-mission marketing means that the company
should define its mission in broad social terms rather than p. 597
narrow product terms. Photo: Amazon
p. 597
Societal Marketing Key Terms: Sense-
p. 598 of-mission
Societal marketing means a company makes marketing marketing
decisions by considering consumers’ wants and interests,
the company’s requirements, and society’s long-run
interests. p. 598
Key Terms:
Products can be classified according to their degree of Societal marketing,
immediate consumer satisfaction and long-run consumer Deficient products,
benefit. (Figure 20.3) Pleasing products,
Salutary products,
 Deficient products have neither immediate appeal Desirable products
nor long-run benefits.
 Pleasing products give high immediate satisfaction p. 598
but may hurt consumers in the long run. Figure 20.3:
Societal
 Salutary products have low appeal but may benefit

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 consumers in the long run. Classification of
 Desirable products give both high immediate Products
satisfaction and high long-run benefits.
p. 599
Review Learning Objective 4: Describe the principles of Ad: Patagonia
sustainable marketing.

p. 600 Explain the role of ethics in marketing. Learning Objective

PPT 20-34 5
MARKETING ETHICS AND THE SUSTAINABLE
COMPANY p. 601
Table 20.1: Some
PPT 20-35 Marketing Ethics Morally Difficult
Situations in
Corporate marketing ethics policies are broad guidelines Marketing
that everyone in the organization must follow.
PPT 20-36
What principle should guide companies and marketing
managers on issues of ethics and social responsibility?

One philosophy is that such issues are decided by the free

market and legal system.

A second philosophy puts responsibility not on the system p. 602

but in the hands of individual companies and managers. Photo: Marketing
ethics and social
responsibility
Written codes and ethics programs do not ensure ethical
p. 603
behavior.
PPT 20-37 p. 603
The Sustainable Company
Photo: Marketing
PPT 20-38 ethics, Under
Sustainable companies are those that create value for
Armour
customers through socially, environmentally, and ethically
responsible actions.

Sustainable marketing provides the context in which

companies can build profitable customer relationships by
creating value for customers in order to capture value from
customers in return, now and in the future.

Review Learning Objective 5: Explain the role of ethics in

marketing.

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