Principals and Values of Sustainable Marketing - Assignment Example

?Sustainable Marketing Report Executive Summary From the beginning of 1980 the concept of sustainable marketing came into existence. In recent years there has been a widespread and increasing support for the subject. The Brundtland commission in its report defined sustainable marketing as the marketing required to satisfy the present need without affecting the capability of future production. Sustainable marketing takes into consideration the preservation of natural resources and cultural beliefs. This report highlights on the areas such as the principals and values of sustainable marketing, the rational of sustainable marketing and the challenges which are faced by the companies in 21st century. The project also highlights about the green marketing process and the present issues which are faced by organisation about maintaining the ecological balance of the environment. Apart from this an organisation has been chosen to have an insight of their environmental policy and marketing mix strategy which they have undertaken. In this report Hewlett Packard or what is popularly known as HP is chosen to conduct the research. Table of Contents Part I: Theory 4 Introduction 4 Context and Rational 5 Principles and Values 5 Challenges in the 21st century 6 Towards Sustainable marketing 7 Framework 9 Evaluation of Sustainable marketing 10 Part II: Application 10 Industry analysis 11 Current approach and strategy 12 Present Issues 14 Evaluation of HP’s marketing mix 14 Summary 16 Reference 16 Part I: Theory Introduction Over the last few decades marketing topics have been very much dynamic and vibrant. Among them Sustainable marketing stood out as one of the most valuable and necessary forms of marketing (Ottman, 2011, p.xi). Sustainable marketing is a process of marketing which aligns the inner organisation process and systematize the using up of resources which creates values for the stakeholders and also helps in enriching the natural and social environment. Sustainable marketing comes into action when an organisation understands that they operate with availability of limited resources and holds the responsibility of the future in preserving the natural resources. This process helps a firm in making continuous development of the social environment and restores the natural environment in which the organisation exists. It commits a firm in reducing the discharge of hazardous waste materials into the social and natural environment. Some of the examples that are generally undertaken by organisations in their operational exertion include creation of green plants, less use of virgin raw materials and more use of recycled materials. Apart from these they also try to achieve a sound waste management strategy (Basile, Hershauer & Mcnall, 2011, p.197-198). A lack of properly defined goal for organisational, environmental and societal environments creates a distraction in the achievement of successful sustainable marketing. Green marketing is a subset of sustainable marketing. Green marketing refers to everything from greening the product development process to the greening of advertisement campaigns. Greening of product and its development process is about using less finite resources and to look after fewer emissions of hazardous elements in the environment. Keeping all the factors in mind the last responsibility is to develop a green product. A green product can be stated as a product which can be recycled easily and does not degrades the environment. A green product can have many other qualities such as it saves water, able to reduce the green house effect, control on toxic elements, capacity to clean the indoor air. The final task comes in the form of green marketing which involves usage of electronic media to promote the product rather than going for print media. The main objective is to look after less usage of paper. Some companies’ use taglines in their promotional campaigns such as ‘save paper’ ‘save electricity’. It has been observed that the companies which follows green marketing conducts their advertisement campaign through social media, broadcasting media and other communication media. They try focusing on the lesser use of print media such as newspaper advertisement, magazine advertisement and other forms which involves paper such as pamphlets, hoardings or banners. Context and Rational Sustainability marketing is about the involvement of corporate in social and political processes to change the motive of common people towards sustainability. The normative rational for sustainability is about the managers and owners of business houses who wants to do some welfare works for the society. The other rational of sustainability is strategic rational which states that changes are necessary for maintaining social-ecological problems and the consumer behaviour for successful sustainable marketing (Tukker, 2008, p.131). Principles and Values The principals and values of sustainable marketing refer to the organisation’s values and goals of sustainable development. Marketing plays an important role in the achievement of sustainable development and also effects in the achievement of corporate social responsibility. Every organisation whether from the manufacturing industry, packaging industry or from any other segment have an environmental policy which showcases their values and principles towards environment (Fitzpatrick, Lewis & Verghese, 2012, p. 118-120). Generally the set of principles and values an organisation undertakes are described below: Principles and values are generally the commitment of organisation towards the environment, their employees and customers and the share holders. The principles of sustainable marketing reflect in marketing and communication, product mix, development and designing process of the product. Another principle is about telling the truth i.e. to remain honest in the marketing process. In sustainable marketing it is required that the marketer must be transparent and precise in communicating the messages. The advantage of reaming transparent in the message is that it reinforces the business reputation, demonstrates that the organisation is following the rules and regulations which also enhance the appeal of the product. Apart from the aforementioned principles there is another principle which states that organisations should obey the rules & regulation pertaining to environmental issues. The organisations should make sure that environmental claims must follow the local laws. There should not be any forged or fake claims. The environmental claims can be found on a product level, websites, point of sale promotions and advertising. Challenges in the 21st century Sustainable marketing in 21st century is one of the highly appreciated forms of marketing. It has become a necessity for the firms in order to maintain the ecological balance of the environment. In the 21st century companies get motivated by the economic factor as well as social development programs. But despite the long history of the subject, even today companies are unable to achieve social, environmental and ethical practice (Gosnay & Richardson, 2010, p.147-149). There are existences of several challenges for sustainable marketing even in 21st century. The first challenge lies in identifying the sustainable quality and of the products and services of a firm. The second challenge is based upon the consumer. The challenge is to prevent the usage of non-sustainable products and services by the consumers and encouraging them to use more ecologically and socially agreeable products and services. The third challenge lies in creating awareness in the minds of consumer about the ill effects of using a non-sustainable product and demonstration of the positive effects of using a sustainable product. The fourth challenge is to find a suitable and appropriate way to communicate with the consumers about the benefits of sustainable products. The fifth and the most important challenge is to make sure that business activities do not affect environmental and social issues (J. Stead & W. Stead, 2009, p.156-158). Towards Sustainable marketing The concept of sustainable marketing appeared during 1990’s with a view of promoting green marketing practices among the organisations. Sustainable marketing is a compulsory core competence for sustainable strategic management. It focuses on differentiating the products and services of the firm both socially and ecologically. Sustainable marketing is defined as the process of planning, executing, monitoring the process, promotion, distribution and pricing the product in such a way that it satisfies the following three conditions: a) Customer needs are satisfied. b) Organizational goals are achieved. c) The system or the process of achievement must be eco-friendly (Starik, J. Stead, & W. Stead, 2004, p.164-166). The marketing mix for sustainable marketing or green marketing mix have the same elements but in a greener way. Green Product- The product should be environmental friendly, such that it does not creates any hazards for the environment. Green Price- Green Price refers to a price which is affordable and repeat purchase can be achieved. Green Place- The distribution policy should be such where there is less need of travelling. In other words there must be distributor points in such a place where the market is easily accessible. Green Promotion- Green promotion refers to usage of social media, broadcasting media etc. thereby reducing the usage of paper. Now a day’s companies follow green marketing approaches as it helps them in positioning their product as environmental friendly and energy efficient. A live example can be cited in the context of green system. The example is new environmental friendly electric bulbs manufactured by different companies. Earlier electric bulbs used to consume double the energy that is consumed by present electric bulbs. Other example includes Eco-friendly cars which require LPG or CNG gases to run which do not cause any pollution. Slowly the car manufacturing firms are transferring the technology from petrol’s and diesels to gases. Earlier due to heavy usage of petrol’s and diesels the environment was getting hugely affected. Framework The framework of green marketing can be divided into two parts namely ecological marketing and Environmental or green marketing. Ecological Marketing Ecological marketing was based on the idea of environmental protection and conservation of resources. It can be defined as the study of advantages and disadvantages of marketing activities on the basis of pollution, consumption of energy and depletion of natural resources. It is a cause of concern for all corporate as it includes manufacturing of products by ensuring the ecological balance of nature. And the product should be biodegradable and manufactured by less use of scares natural resources. This is the reason why we find herbal toilets, no smoking zones and various stationary products from the recycled papers (Saxena, 2005, p.653). Environmental Marketing Environmental marketing can be defined as the activities intended to produce exchanges which satisfy human needs in such a way that it do not degrades the environment (Sahay, 2006, p.100-101). This is sometimes referred to as green marketing. The marketers practising this system claim that their product is manufactured by reduction or elimination of environmentally harmful substances. In order to undertake this process it is necessary to consider the conception and history of green marketing, the different types of green marketing and the rules and regulations pertaining to consumer protection (Mansvelt, 2010, p.224-225). Evaluation of Sustainable marketing There exist a few differences between the traditional form of marketing and a Sustainable form of marketing. The traditional form of marketing gives high importance to the factors like customer satisfaction and their needs or desires. On the other hand sustainable marketing focuses on values and beliefs of the consumers. The other factors which are also considered in sustainable marketing includes the preservation of natural resources and cultural philosophies (Jamieson, 2006, p.14-15). In case of sustainable marketing there are some features which justify it as a green process. The characteristics are described below: Operational sustainability- The operational sustainability of a product can be improved by reducing the energy consumption, controlling pollution, developing a green plant and a sound waste management strategy. Environmental causes- The organisations performing green marketing always try to promote the environmental issues. Part II: Application The organisation which has been chosen in order to conduct the study is Hewlett Packard. The reason behind choosing this organisation is its approach and concern towards green marketing is highly visible. Industry analysis During 1939 two friends from Stanford University Bill Hewlett and Dave Packard jointly founded Hewlett Packard or what we call it today HP. The company is headquartered in Palo Alto, USA. The first product developed by HP was ‘Palo Alto Garage’ which was an audio oscillator generally used by sound engineers. The company is based on technological solutions and has its presence in more than 170 countries. The main objective of the company is to provide technical solutions to its clients. The major products of the company includes personal computers, industry related servers, storage devices, networking products, printers, different types of software’s, and other products related to imaging. Apart from this product line HP also has a strong business line in the field of service & consultancy. The technology industry provides the base for producing chip, information & communication devices and computer systems. The companies which belongs to this industry develops or manufactures the products which increases the efficacy of cell phones, desktop pc’s, laptops, television as well as other communication devices. The growth of this industry is always noticeable compared to other industries. The micro-chips are getting smaller day by day and demand for more efficient and faster technology will always perform as a driving force for technical industry. The customers of this industry are generally corporate and individual peoples who obtain the technology to make their mode of operation simpler and flexible. HP markets its products directly to household, small to medium sized business and big organisations as well. They sell their product mostly directly or through online. Other than direct selling and online selling they also distribute their product through retailing, selling through vendor and other technology partners. Since the trading of HP is diversified into different industries such as hardware industry, software industry, IT consulting and IT services, therefore the competitors are present from all industries. The major competitors of HP are International Business Corporation popularly known as IBM, Dell Inc, Cisco systems Inc, Xerox Corporation, Seagate Technology, Apple Inc, Toshiba Corporation, Canon Inc, Cap Gemini and Accenture among the others. Current approach and strategy Hewlett Packard focuses highly on sustainable marketing. They initiate different types of sustainable programs. The company has a long history of sustainable marketing practices. It started on 1987 when the company started recycling hardware. During that period they have recovered 2.3 billion pounds by reusing the recycled products. In 2010 the company manufactured around 310 million laser jet printers and cartridges that contained their ‘closed loop’ recycling process. HP has been evolving since 3 phases of sustainability. During the 1980’s the primary concerns over the issue was pollution prevention and control. The main objective was reducing the emission from the manufacturing process. In that period HP did a great job by controlling the pollution, risk management and reducing usage of toxic materials. In 1990 the concept changed to ‘product stewardship’ which focuses on the development of tracking and managing regular issues such as customer enquiry response system, management information system, product roll-back programs, green packaging and designing environmental friendly product. Presently the concept of sustainability is about building and creating technologies that contributes to the environment development. The company has understood that pollution control and product stewardship was an old idea of sustainable marketing on the contrary they focus on combining their environmental sustainability to their core business strategy. This shows their dedication towards maintain the design of sustainability. This is the reason why HP has been ranked at the highest position in terms of corporate social responsibility by Fortune Magazine. Presently the company has developed many products keeping sustainable development in mind. The company have manufactured carbon footprint calculator which consumes less energy, paper and saves money also. Present Issues The present issues pertaining to sustainable marketing can be described below: To meet the expectations of clients- The customers have become more aware about the environmental issue, so as the reason they are demanding more environment friendly products and services. The customers are even ready to spend a few bucks extra for an environmentally sound product. Legal concern- There are different legal aspects which takes place in the market such as roll-back of products regulation, bans on hazardous materials. These regulations are spreading throughout the world. Increased cost reserves- The objective is to create value for share holders and customers. This can be achieved by reducing money spent on waste. This can also be achieved by undertaking a sound waste management system. Increasing brand value- It has been studied that customers always prefers products those are environment cautious. The other significant issues of HP is migrating climate changes, use energy more efficiently, sustainable development of product and also to look after product recycling and product reuse. Evaluation of HP’s marketing mix Green marketing is a new trend in business. It is simply a way when companies integrates the products in the organisation those which are environment friendly. Recently a study was conducted which reveals that according to 70 % consumers the social responsibility of an organisation lies in how they are active in preserving the natural balance of environment. Hewlett Packard believes heavily in green marketing. It is clearly noticeable with the environmental objectives of HP. The environmental commitment of HP states that they will always look after the environmental sustainability by responding to the issues like climate change and energy consumption. This is the reason why we notice HP goes for a green marketing mix strategy. The marketing mix of HP can be illustrated below. Product – The Company always designs the products keeping environment in mind. HP is committed towards providing outstanding energy efficient products which uses eco friendly materials and greener packaging. The eco friendly products of Hewlett Packard include energy efficient laser printers, desktops, laptops and servers. Apart from this equipments HP also offers IT solutions which reduces the emission of green house gases like CO2 into the environment (HP, n.d.). Price- Pricing in a sustainable way means to price the product in affordable way. The pricing of HP products has been made accordingly on their basis of cost of production. Place- HP believes in green supply chain management i.e. the process of using environment friendly materials and transferring them to the end user and again after the decline of product it can be reclaimed back and recycled within the environment. The entire idea behind using sustainable supply chain management is to reduce the cost and also helping the environment. Promotion- HP focuses heavily on greener promotion of its products. HP is trying its level best to minimize the use of paper in promoting its product. The new promotional tools of HP include social media like Twitter and Face-book. Then they also use their own website to promote their products. Summary After going through all the research process it can be clearly stated that sustainable marketing is more a necessity than a desire. Companies have become more cautious towards the environmental issues. They are developing an end to end greenery system to facilitate their operations. The functions includes setting up of green plant, designing the product development process in an eco friendly way, distribution and even promotional mechanism also in sustainable way. Hewlett Packard is on such company which has been undertaking sustainable development process from long time back. The company mainly focuses on recycling of products and creating energy efficient products. There are many initiatives which are undertaken by the company to promote and create awareness of environmental issues among the common people. The marketing mix strategy of the company also justifies the practise of sustainable marketing. Reference Basile, G., Hershauer, J., & Mcnall S. (2011). The business of sustainability: trends, policies, practices, and stories of success. US: ABC CLIO. Fitzpatrick, L., Lewis, H., & Verghese, K. (2012). Packaging for sustainability. US: Springer. Gosnay, R. M., & Richardson, N. (2010). Develop your marketing skills. UK: Kogan page Publishers. HP. (No Date). Environmental Information on HP products. [Online]. Available at: http://www8.hp.com/us/en/hp-information/environment/product-info.html. [Accessed on 17 April 2012]. Jamieson, W. (2006). Community destination management in developing economies. UK: Routledge. Mansvelt, J. (2010). Green Consumerism: An A-Z guide. US: SAGE. Ottman, J. (2011). The new rules of green marketing: strategies, tools, and inspiration for sustainable branding. US: Berrett-Koehler Publishers. Sahay, B. S. (2006). Green Business. India: Allied Publishers. 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