Sustainable management Metropolia 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 supplierproducerwholesalerretailerconsumer NGO

Chain responsibility Equal powerUnequal power Chain as collection of independent buyer- supplier relations Contract model – relation buyer-suppliers is balanced Due Care model – unbalanced buyer- supplier relationship Most 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 ResponsibilityExternal control ProductProduct info on package (ingredients, production method) Certification Label (EKO, Fair trade) CompanyIdentity (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?