Sustainable management Metropolia 2012 Business Ethics IP week

Sustainable managementMetropolia 2012 Business Ethics IP week

9 CSR and Marketing

Case: MRI equipment

• You have been ordered to sell 7 old type MRI Scanners that are on stock, while the new model is cheaper to produce and 30% better in imaging.

• The old ones can’t be sold for a lower price as the margins are extremely small for these kind of equipment.

• What kind of marketing advertisement would you make?

LOHAS

• Lifestyles of Health and Sustainability

• Certain customer market segment of consumers willing to adapt their consumption towards more sustainable and healthier lifestyles

LOHAS profile

• Higher income, higher educated• Early adopters, influencers• 40% according to WRI in USA and 44 %

(Allianz study) in Germany, 36% of Australian shoppers, China: LOHAS alludes strongly to traditional Confucian principle of harmonious coexistence of humanity.

• But only around 15% are really devoted to sustainable consumption

Cultural Creatives

• “The Cultural Creatives: How 50 Million Peope Are Changing The World.” Paul H. Ray and Sherry Ruth Anderson, 2000

• Similar to LOHAS concept• Do the test

Green Gap

• There is a difference between what people say they do (or want to do) and the actual shown behavior.

• Why?• How to overcome this?

Does LOHAS and CC trust business?

• One OECD study found that Marketing language and competing claims on what makes a product green have caused low market penetration for some eco-labels.

• How can business communicate it’s good intentions, sustainability quality of product/service?

Labeling

Chain responsibility

Upstream: You are (partly) responsible for behavior of your suppliers, or at least you support continuation of behavior.

E. g. produced by child labor

Downstream: You are (partly) responsible for behavior of your customer, or at least you facilitate behavior.

E.g. waste disposal of your product

Chain Responsibility

Expectations of society

supplier producer wholesaler retailer consumer

NGO

Chain responsibility

Equal power Unequal power

Chain as collection of independent buyer-supplier relations

Contract model – relation buyer-suppliers is balanced

Due Care model – unbalanced buyer-supplier relationshipMost powerful should act with restraint

Chain as one coordinated effort

Covenant model – Chain can be seen as a multiple parties contract

Social cost model -The stronger actors carry a larger responsibility for coordinating the chain

Communication of CSR

Own Responsibility External control

Product Product info on package (ingredients, production method)

Certification Label(EKO, Fair trade)

Company Identity(CSR reporting, communications)

Certification standards(ISO 14000, SA 8000 etc)

Responsibility towards consumers

• JFK (1962) “Consumer Bill of Rights”• Right to be safe• Right to be informed• Right to choose freely• Right to be heard

• EU law on product liability based upon social cost theory, based upon strict liability (resp. by the risk created)

• National Advertising Codes

Assignment 6

• What is the marketing strategy of your CSR company? Give an example

• Use of labels/certification• What is their target group?• Do you consider them sincere? (e.g. is

advertisement misleading or inspirational?)

Evaluate together with assignment 5 the CSR policy of your company. From a People, Planet, Profit, and ethical point of view.

7 Team presentation (3 to 5 stud.)

• Discuss in the team the findings of assignment 5 and 6.

• Select a company (only 1 company p. team) that is most interesting to share and use in a poster.

• What is the company doing in the field of CSR?• What sustainability innovations are they

developing?• Are they truly CSR? How do they communicate it?

Tell about Marketing strategy.• Give a 5 minute presentation• Make a 10 slide PowerPoint

Assignment 8

• Do the Cultural Creative test. • What is your score? • Did you expect this? • Do you consider this test to be valid and

reliable?