Business Ethics green-movement-facts
How could Sustainability (Green Movement) Conflict with Marketing Decision Making?

Introduction

In the recent years, it is widely argued that adoption of sustainability and green marketing effects are crucial to the success and performance of a firm in the competitive marketplace (Flint et. al., 2009). To a certain degree, such claim is true, as people are getting more environmentally conscious and demanding responsible acts from socially responsible corporations today (Cartwright et. al., 2006). However, it is not accurate that to adopt green marketing techniques will definitely enhance a firm’s performance or profitability in the marketplace. In many of the instances, adopting green marketing or sustainability concepts in marketing management of a firm may even hurt the profitability of the firm, as many of the actions required for sustainability management of a firm may conflict with the ideal strategies to be used in effective marketing. This paper will identified several such conflicts that may trouble marketing decision makers.

Frameworks Used in Marketing Decision Making

In this section, several frameworks often used in marketing decision making process are presented. A brief description and explanation of the marketing framework will be discussed. Then possible conflicts that could arise between sustainability and marketing decision making will be outlined.

Segmentation, Targeting and Positioning

In marketing management, STP (namely, segmentation, targeting and positioning) process is the very first step to be performed in deciding the marketing strategies, techniques and actions to be taken (Doole et. al., 2004). Three of the steps of STP will be briefly discussed as follow.

Segmentation. In determining the relevant marketing strategies, marketers should firstly try to segment the market, to analyze the characteristics of the market segment, and to formulate relevant and effective strategies to be communicated and delivered to the particular segment (Noel et. al., 2007). In this step, marketers should craft different strategies to be delivered to the different market segment. However, certain decisions can conflict with the concepts and ideas of sustainability. For example, a secondhand car seller may target the poorer income car buyers. As the poorer people cannot afford to purchase better car with greater efficiencies of less CO2 emissions, it is necessary then for the secondhand car seller to market less efficient cars for them. Thus, marketers have no choice, but to provide products that are not environmentally friendly to the market segment. In fact, it is not viable to market modern cars, with hybrid engines, high fuel efficiencies to these people as them can hardly afford these better quality products. As a result, marketers cannot choose to sell the ‘greenest’ products to the consumers as they do not have the required purchasing power. As such, the best marketing decision to be made conflicts with the ideal decisions from the sustainability perspectives.

Targeting. The second step in the STP process is to target the particular segment through the selection of generic competitive strategies. Generally, three types of strategies can be applied, namely, low costs leadership, differentiation, and niche market (Noel et. al., 2007; Hulbert et. al., 2003). In these areas, the expected profitability and financial returns are often used as the criteria to decide which forms of strategies to be pursued. However, such a decision making process, purely relying on information gathered from the market, as well as certain financial return/ profitability indicators and metrics, can produce conflicting results against those suggested by the green and sustainability concepts. For example, the return on investments for project A may be 50% and it is 20% for project B. However, it is noted that pursuing project B is more environmentally friendly. As such, marketers are now facing with dilemma to choose the best projects for business expansion purposes, and will tempted to choose project A as the potential profits to be reaped from such project is obviously higher.

Positioning. The last step in STP process is positioning. Under this step, businesses are to understand the consumers’ perceptions, behaviors and attitudes well, and then to craft marketing mix strategies to communicate to the targeted market segment (Noel et. al., 2007). By understanding how the consumers interpret a marketing campaigns, promotional events or advertisement, the markets should choose the best viable marketing messages and mixes to be delivered to the mass public. There are many instances where the best positioning decisions derived from the traditional marketing concepts will conflict with those ideal actions to be taken from a sustainability perspective. In fact, many of the effective marketing campaigns are not environmentally friendly. For example, printing of colorful, attractive and high quality brochures is useful to entice customers as well as to build the brand name of luxury products, but that is not environmentally friendly as brochures are often thrown away by customers if they are not interested. Besides, spending money on organizing parties for public is often not environmentally friendly as a lot of foods are prepared, but wasted, as organizers tend to prepare more food than necessary to avoid lost of reputation if the foods served are insufficient. Besides, in order to target the rich people, many unnecessary resources are spent on decoration, design of environment, packaging of products, or giving away free booklet or materials to the customers, and all these are largely not environmentally friendly. It is reasonable and easily understandable that these efforts are necessary to paint a luxury, branded and noble picture of the products offered by a company, but all these comes with a high costs to the environment.

Marketing Mix

Marketing Mix is a popular and yet practical concept widely adopted by researchers and managers in designing and creating value proposition to the marketplace. Under such concepts, the 4Ps framework is the most commonly used theory to design, plan and deliver value to the society. All of the four elements under the 4Ps framework will be analyzed as follow.

Product. In marketing mix, the design and offering of products or services are critical, as the perceived value and functions of the products will determine the success of the company in the marketplace. Generally, green and environmentally friendly products are easier to be promoted and sold to the marketplace, but this is not necessary the case (Albino et. al., 2009). For example, it is widely practiced by consumer electronics firm such as HP, Dell, and Canon to design easily spoiled printers (after a certain period) to be sold to the marketplace. This is to ensure that customers will come back to them to purchase another printer again in the future, if the original printer is damaged after a time period. Marketers in such segment understand that to design a too good quality printer will cause them to suffer financially, as if the printers designed will never spoiled, customers will not come back to them. However, such strategies are obviously not environmentally friendly, as this will create a lot of waste to the world, harming the environment as well as hasten the pace of global warming in the future. As a result, marketers face serious dilemma in choosing the best marketing decisions – to chase for profitability or to design ‘green’ and quality products for consumers and the society (at the expense of possibly financial losses of the company) (Kleindorfer et. al., 2005).

Price. Pricing is another critical elements in marketing mix, as consumers will compared the priced to be paid to the perceived benefits they are about to obtained from the products or services bought. Generally speaking, the price of a product can be set to be low in case the company wish to pursue a low cost leadership in the marketplace, but the product will be priced at a premium in case that the marketer is targeting a niche market (Noel et. al., 2007). Many of the time, company can attract buyers by giving extra discount to the consumers. This can conflict with the sustainability concepts, as most of the times; discounting strategy will create an impulse towards the consumers to purchase what they do not actually need. As a result, a lot of waste will be created, as people are lured to keep consuming and buying as they are tricked psychologically and emotionally to spent money. That will cause businesses or manufacturers to make more unnecessary products, which will most likely create stresses to limited natural and depleting resources around the globe.

Place. In the design of marketing mix, place refers to the location whereby the business is conducted, or the distribution channel to deliver the products to the end users. According to the theory, the distribution channel should be cost effective and responsive to customer demands. Besides, in terms of design of psychical places for businesses, consumers’ perceptions and decision making process should be investigated, so that the layout and atmosphere of the places is appealing to the end users (Hulbert et. al., 2003). For this, many of the resources will be spent on delivering a special atmosphere, feelings and environment to the customers. Many of the resources spent indeed do not deliver real benefits to the customers, but are designed purely to appeal to the customers emotionally. Thus, such a marketing strategy, to channel much of the resources into the design of psychical places for a business, is effective marketing strategies, but is nonetheless not truly environmentally friendly. Thus, effective marketing strategies obviously are not those strategies that are environmentally friendly. Marketers will have to face a dilemma to attract the customers (to growth the business) or to not spending sufficiently on the design of physical layout (at the possible expense of losing customers to competitors).

Promotion. Under the element of promotion, it is argued that a business should engage in promotional and advertising activities in communicating the company value proposition or brand name to the marketplace (Hulbert et. al., 2003). Under such elements, marketing communication strategies are crucial to the success of an organization. For example, it is highly important for a business to advertise aggressively, with creative methods and strategies, to reach the customers, as well as to leave impactful memory to the customers. However, creative advertising can mean spending excessive resources to make a product become appealing to the mass public (Eltayeb et. al., 2010). Giving away free samples, use of expensive but unnecessary packaging materials to impress consumers, printing of promotional materials, putting up large advertisement around the cities, and many others can create a lot of rubbish to the world. If the materials used or consumed in the marketing promotional activities are non-recyclable, wastage can happens. Apart from that, many of the materials used indeed can pollute the world, as disposing the unwanted materials after the promotional period may create unnecessary CO 2 emission and others compound that could pollute the environment (Hill, 2001).

Conclusion

As presented above, the commonly used marketing framework relevant for decision making process, such as the STP framework and the marketing mix (4Ps) are presented. Many of the theories used are designed to create effective marketing strategies to enhance the profitability, growth and dominance of a firm in the marketplace, but the effective strategies suggested by these framework can conflict with the concepts and ideas suggested by sustainability or green management of the firm. There are a lot of dilemmas faced by a marketer. On one hand, marketers are burdened with the need to growth the company at the fastest way possible, while on the other hand, marketers should exercise care and diligence in ensuring that the growth is sustainable. As such, decision makers should make wise judgment on the options to be pursued, in balancing the needs for highest profitability with the need for sustainable development and management of the firm.

 

References & Bibliography

Albino, V., Balice, A., & Dangelico, R. (2009). Environmental strategies and green product development: an overview on sustainability-driven companies. Business Strategy and the Environment, 18(2), 83.

Cartwright, W., & Craig, J. L. (2006). Sustainability: aligning corporate governance, strategy and operations with the planet. Business Process Management Journal, 12(6), 741.

Doole, I., & Lowe, R. (2004). International Marketing Strategy 4th ed. Thomson Learning publisher, London.

Doyle, P., & Stern, P. (2006). Marketing Management and Strategy, 4th edition, London, Prentice Hall

Eltayeb, T., Zailani, S., & Filho, W. (2010). Green business among certified companies in Malaysia towards environmental sustainability: benchmarking on the drivers, initiatives and outcomes. International Journal of Environmental Technology and Management, 12(1), 95.

Fletcher, R. & Brown, L. (2005) International Marketing: An Asia-Pacific Perspective (3rd Ed.), Prentice Hall Australia

Flint, D. J., & Golicic, S. L. (2009). Searching for competitive advantage through sustainability: A qualitative study in the New Zealand wine industry. International Journal of Physical Distribution & Logistics Management, 39(10), 841-860.

Hill, M. R. (2001). Sustainability, greenhouse gas emissions and international operations management. International Journal of Operations & Production Management, 21(12), 1503-1520.

Hulbert, J., Noel, C., & Piercy, N. (2003). Total Integrated Marketing, New York: Free Press.

Kleindorfer, P. R., Singhal, K., & VanWassenhove, L. N. (2005). Sustainable Operations Management. Production and Operations Management, 14(4), 482-492.

Noel, C., and Hulbert, J. M. (2007). Managing Marketing in the 21st Century, Bronxville, NY: Wessex.

 

 

 

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