Socially responsible marketing

Last updated

Socially responsible marketing is a marketing philosophy that a company should take into consideration; "What is in the best interest of society in the present and long term?" [1]

Contents

Overview

Socially responsible marketing is critical of excessive consumerism and environmental damages caused by corporations. It is based on the idea that market offerings must not be only profit-driven, but they must also reinforce social and ethical values for the benefit of citizens.

The idea of socially responsible marketing is sometimes viewed as an extension of the concept of Corporate Social Responsibility (CSR). CSR is promoted as a business model to help companies self-regulate, recognizing that their activities impact an assortment of stakeholders, including the general public. [2] CSR is sometimes described in terms a pyramid, starting with economic as its base, then legal, ethical and philanthropic actions at the top. It is in the last two layers of the CSR pyramid, ethical and philanthropic, that socially responsible marketing opportunities appear the greatest. Meeting the first two layers, economic and legal, are necessary for a business to thrive in order to engage in the later two. [2]

Socially Responsible Marketing and Ethics

Social responsibility in marketing is often discussed with ethics. The difference between the two is that what’s considered ethical in terms of business, society and individually may not be the same thing––nor do all business actions necessarily have to be socially responsible in order to be considered ethical. Some viewpoints of socially responsible behavior espouse that the qualifying marketing actions not simply meet the minimum ethical guidelines of business, but voluntarily exceed them. [3]

The Advertising Standards Authority in the UK has laid down some rules which suggest that all marketing communication should be socially responsible. Therefore any content which is irresponsible or incites such behaviour from the audience can be brought to the concern of the Authority. A variety of topics such as alcohol, violence, objectification, body image, drugs, tobacco, etc fall under the socially irresponsible category when used inappropriately by the marketer. [4]

As a Response to Mainstream Marketing

Socially responsible marketing emerged as a response to questionable marketing practices that have adverse effects on society. The major economic criticisms that the conventional private marketing system receives from are as follows:

  1. Mainstream marketing strategies generally lead to high prices. Due to the size of the chain of intermediaries in marketing, the distribution of commodities to consumers costs a lot. As a result, individuals pay higher premiums for the goods and services that they receive.
  2. Contemporary marketing relies heavily on aggressive advertising and promotion. In order to offset the costs, companies charge higher prices through excessive markups.
  3. Product differentiation is one of the most commonly used marketing tools. But this not only creates an artificial psychological value attached to higher-priced brands but also raises environmental concerns about packaging. As such, socially responsible marketing rejects all deceptive marketing practices in pricing, promotion and packaging, even if they may seem technically legal.

In addition to the economic implications, marketing exerts a significant impact on the values of the society. The advocates of socially responsible marketing argue that the current system creates false wants, i.e. encourage people to buy more than they actually need, injects constant desire for material possession, and leads to excessive spending. Too much obsession with material goods in the long run may cause damage to the society as a whole. Corporate profit should not eclipse the collective benefit of the society. Thus, socially responsible marketing draws attention to the “social costs” [1] that are embedded in the marketing, selling and consumption of private commodities. It calls for a marketing system that contributes to social and environmental sustainability, while producing profits for businesses.

Types

There are several related marketing concepts that fall under the umbrella of socially responsible marketing, these include: social marketing, cause related marketing, environmental or green marketing, enviropreneurial marketing, quality of life, and socially responsible buying. [5]

Enlightened Marketing

The philosophy of enlightened marketing is a concept that falls under the umbrella of socially responsible marketing. Enlightened marketing states that “a company’s marketing should support the best long-run performance of the marketing system. This concept contains the five principles: consumer-oriented marketing, innovative marketing, value marketing, sense-of-mission marketing and societal marketing. [1]

In consumer-oriented marketing, the company “organizes its marketing activities from the consumer's point of view.” Marketing activities focus on the needs of a defined user set. [1]

Innovative marketing states that a company must continue to improve its products and marketing efforts, recognizing that if it doesn’t, it risks losing business to a competitor that does. [1]

The principle of value marketing contends that a company "should put most of its resources into value-building marketing investments." One criticism of marketing its short term focus in the sense of promotions and minor improvements. Value marketing seeks to create long term customer loyalty by adding significant value to the consumer offer. [1]

Sense-of-mission marketing suggests a company mission be defined in "broad social terms" as opposed to "narrow product terms." This technique frames the business goal in a way that the organization can rally behind a deeper sense of purpose. [1] Millennials have become cautious of their brand choices as they are getting affected by socially responsible marketing. They prefer associating with brands that are honest, environmentally conscious, ethical, and working towards the betterment of the society. The rise of TOMS to a $400 million company is a case in point. [6]

The principle of societal marketing asks company's to consider the "consumers' wants and long-run interests, the company's requirements and society's long-run interests." [1]

Benefits to Business

The practice of socially responsible marketing has many distinct advantages for businesses who choose to embrace it.

In terms of financial advantages, the government has established a number of tax-cuts and other benefits for companies in many industries as incentives to be more socially responsible. For instance, companies that reduce their carbon emissions and pollution levels are often offered tax exemptions and other assets for their cooperation in the country's movement towards environmental awareness and responsibility.

Even in cases where pre-determined benefits like this are not available as incentives, it is still in a company's best interest in the long run to move towards more socially responsible methods. By dealing proactively with potentially harmful or socially detrimental marketing methods and deciding to promote the public well-being with their products, a company can effectively eliminate the need for legislative and regulative obstacles in the future. In other words, by making a concerted effort to be socially responsible in the first place, a company provides less of a reason for the government to develop any taxes or extra restrictions on their business in the first place, which helps them in the long run. [7]

Similarly, social responsibility in marketing helps to ensure that a company is, in fact, following the rules and this not only instills faith among the customer base, but also helps to keep the company out of any kind of trouble in terms of legal problems and also in terms of public relations. [8]

Customers also appreciate social responsibility and as a result, companies can gain business and maintain it with more ease. For example, if a company can certify their product as "green," they gain a certain degree of competitive advantage over competition and many customers will be more willing to buy their product than one that has not been certified as "green," because they perceive the value of the product to be higher than others. Further, these types of things can instill a sense of faith and goodwill in customers and cause the consumers not only to feel better about buying the product in the first place, but also feel better about buying it again. Socially responsible marketing makes sense as a business strategy because it not only broadens and expands the customer base, but increases the likelihood of developing customer loyalty and getting them to buy their product again in the future. [8]

Related Research Articles

<span class="mw-page-title-main">Marketing</span> Study and process of exploring, creating, and delivering value to customers

Marketing is the act of satisfying and retaining customers. It is one of the primary components of business management and commerce.

<span class="mw-page-title-main">Triple bottom line</span> Accounting framework

The triple bottom line is an accounting framework with three parts: social, environmental and economic. Some organizations have adopted the TBL framework to evaluate their performance in a broader perspective to create greater business value. Business writer John Elkington claims to have coined the phrase in 1994.

<span class="mw-page-title-main">Corporate social responsibility</span> Form of corporate self-regulation aimed at contributing to social or charitable goals

Corporate social responsibility (CSR) or corporate social impact is a form of international private business self-regulation which aims to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in, with, or supporting professional service volunteering through pro bono programs, community development, administering monetary grants to non-profit organizations for the public benefit, or to conduct ethically oriented business and investment practices. While once it was possible to describe CSR as an internal organizational policy or a corporate ethic strategy similar to what is now known today as Environmental, Social, Governance (ESG); that time has passed as various companies have pledged to go beyond that or have been mandated or incentivized by governments to have a better impact on the surrounding community. In addition, national and international standards, laws, and business models have been developed to facilitate and incentivize this phenomenon. Various organizations have used their authority to push it beyond individual or industry-wide initiatives. In contrast, it has been considered a form of corporate self-regulation for some time, over the last decade or so it has moved considerably from voluntary decisions at the level of individual organizations to mandatory schemes at regional, national, and international levels. Moreover, scholars and firms are using the term "creating shared value", an extension of corporate social responsibility, to explain ways of doing business in a socially responsible way while making profits.

Ethical consumerism is a type of consumer activism based on the concept of dollar voting. People practice it by buying ethically made products that support small-scale manufacturers or local artisans and protect animals and the environment, while boycotting products that exploit children as workers, are tested on animals, or damage the environment.

<span class="mw-page-title-main">Social responsibility</span> Ethical framework

Social responsibility is an ethical framework in which a person works and cooperates with other people and organizations for the benefit of the community.

A sustainable business, or a green business, is an enterprise that has a minimal negative impact or potentially a positive effect on the global or local environment, community, society, or economy—a business that strives to meet the triple bottom line. They cluster under different groupings and the whole is sometimes referred to as "green capitalism." Often, sustainable businesses have progressive environmental and human rights policies. In general, a business is described as green if it matches the following four criteria:

  1. It incorporates principles of sustainability into each of its business decisions.
  2. It supplies environmentally friendly products or services that replace demand for nongreen products and/or services.
  3. It is greener than traditional competition.
  4. It has made an enduring commitment to environmental principles in its business operations.

Value in marketing, also known as customer-perceived value, is the difference between a prospective customer's evaluation of the benefits and costs of one product when compared with others. Value may also be expressed as a straightforward relationship between perceived benefits and perceived costs: Value = Benefits - Cost.

Sustainability advertising is communications geared towards promoting social, economic and environmental benefits (sustainability) of products, services or actions through paid advertising in media in order to encourage responsible behavior of consumers.

Green marketing is the marketing of products that are presumed to be environmentally safe. It incorporates a broad range of activities, including product modification, changes to the production process, sustainable packaging, as well as modifying advertising. Yet defining green marketing is not a simple task. Other similar terms used are environmental marketing and ecological marketing.

Ethical marketing refers to the application of marketing ethics into the marketing process. Briefly, marketing ethics refers to the philosophical examination, from a moral standpoint, of particular marketing issues that are matters of moral judgment. Ethical marketing generally results in a more socially responsible and culturally sensitive business community.

Societal responsibility of marketing is a marketing concept that holds that a company should make marketing decisions not only by considering consumers' wants, the company's requirements, but also society's long-term interests.

In marketing, a company’s value proposition is the full mix of benefits or economic value which it promises to deliver to the current and future customers who will buy their products and/or services. It is part of a company's overall marketing strategy which differentiates its brand and fully positions it in the market. A value proposition can apply to an entire organization, parts thereof, customer accounts, or products and services.

Creating shared value (CSV) is a business concept first introduced in a 2006 Harvard Business Review article, Strategy & Society: The Link between Competitive Advantage and Corporate Social Responsibility. The concept was further expanded in the January 2011 follow-up piece entitled Creating Shared Value: Redefining Capitalism and the Role of the Corporation in Society. Written by Michael E. Porter, a leading authority on competitive strategy and head of the Institute for Strategy and Competitiveness at Harvard Business School, and Mark R. Kramer, of the Kennedy School at Harvard University and co-founder of FSG, the article provides insights and relevant examples of companies that have developed deep links between their business strategies and corporate social responsibility (CSR). Porter and Kramer define shared value as "the policies and practices that enhance the competitiveness of a company while simultaneously advancing social and economic conditions in the communities in which it operates", while a review published in 2021 defines the concept as "a strategic process through which corporations can turn social problems into business opportunities".

A socially responsible business (SRB) is a generally for-profit venture that seeks to leverage business for a more just and sustainable world. The objective of the SRBs involves more than just maximizing profits for the shareholders; it is also about creating positive changes and making valuable contributions to the stakeholders such as the local community, customers, and staff. In other words, the SRB is both profit-oriented and socially responsible as these companies seek to make financial gains, and at the same time, aim to improve the well being of the community. In doing so, the businesses engage in the voluntary initiatives with the aims of improving in various areas ranging from the social to environmental aspects of the society.

Sustainability brands are brands that undertake sustainable practises in the workings of their business and champion them.

Sustainability marketing myopia is a term used in sustainability marketing referring to a distortion stemming from the overlooking of socio-environmental attributes of a sustainable product or service at the expenses of customer benefits and values. Sustainability marketing is oriented towards the whole community, its social goals and the protection of the environment. The idea of sustainability marketing myopia is rooted into conventional marketing myopia theory, as well as green marketing myopia.

Traditionally, market orientation (MO) focuses on microenvironment and the functional management of an organisation. However, contemporary organisations have widened their focus to incorporate more roles, functions and emphasis on the macro environment. Firms have been concerned with short run success and often not taken into account the long-run ecological, social and economic effects from their activities. Despite growth in the MO concept, there is still a need to reconceptualise the concept with a greater emphasis on external factors that influence a firm.

Corporate sustainable profitability (CSP) revolves around the idea that companies who take responsibility from an economical, environmental and social perspective can become more profitable.

Social accounting is the process of communicating the social and environmental effects of organizations' economic actions to particular interest groups within society and to society at large. Social Accounting is different from public interest accounting as well as from critical accounting.

<span class="mw-page-title-main">Corporate environmental responsibility</span>

Corporate environmental responsibility (CER) refers to a company's duties to abstain from damaging natural environments. The term derives from corporate social responsibility (CSR).

References

  1. 1 2 3 4 5 6 7 8 Armstrong, Gary, and Philip Kotler. Principles of Marketing. 12th ed. Upper Saddle River, NJ: Pearson Education, Inc., 2008
  2. 1 2 Ferrell, O. C., and Michael D. Hartline. Marketing strategy. Mason, OH: South-Western Cengage Learning, 2011.
  3. ↑ Grewal, Dhruv and Michael Levy (2008). Marketing. McGraw-Hill 2012
  4. ↑ "Advice and guidance for socially responsible marketing communication in the UK".
  5. ↑ Vaaland, T. I., Heide, M., & Kjell Grønhaug. (2008). Corporate social responsibility: Investigating theory and research in the marketing context. European Journal of Marketing, 42(9), 927-953.
  6. ↑ "How To Use Ethical Marketing To Attract The Right Audience". Forbes. Aug 30, 2019.
  7. ↑ "Archived copy". Archived from the original on 2013-02-04. Retrieved 2013-06-08.{{cite web}}: CS1 maint: archived copy as title (link)
  8. 1 2 "Corporate Social Responsibility and competitiveness - Sustainable and responsible business - Enterprise and Industry". ec.europa.eu. Archived from the original on 2009-10-30.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.