Sustainable Marketing

Sustainable marketing is the process of promoting products that are environmentally safe at the retail level and touting a company's commitment to sustainable practices at the public relations level. It applies traditional marketing techniques but in a specific context. This category of marketing seeks to capitalize on the increased value consumers place on eco-friendly products and companies that have a perceived commitment to sustainability in its production and supply chains.

Marketing that promotes a company's sustainable initiatives serves as a bridge between corporate responsibility and profitability. These initiatives often require a significant capital investment to change the way a company does business or to innovate its products and services so they have a more positive impact on the environment. Investments in sustainability are only worthwhile to a corporation if they result in increased profitability. While social goals are admirable, a corporation has a fiduciary duty to maximize profits for its stockholders. Sustainable marketing assumes this investment is viable by crafting messages that tap into this consumer concern with the expectation that it can be translated into purchasing decisions.

For example, a company that produces laundry detergent can design a product that has less volume, needs less packaging, and uses natural ingredients instead of chemicals. This product innovation costs the company a significant amount of money to accomplish. It will only make this investment if it believes that consumers will value the product and make a purchasing decision based on its new features. Sustainable marketing at the product level is designed to bring these new eco-friendly features to the consumer's attention. At the public relations level, the company can report to its shareholders and customers that it is a responsible corporate citizen that is concerned about sustainable product innovation for the sake of future generations.

In this way, business analysts consider sustainable marketing to have a triple bottom line, resulting in benefits to the customer, the environment, and the corporation. The real impact of sustainable marketing is still debatable, however, because consumer concerns that are identified through polling and research do not always translate into actual purchasing decisions. Purchases of sustainable products are often impacted by outside forces, such as comparative utility, cost, and availability, that can skew the impact of marketing. Sustainable marketing is as concerned with identifying when a consumer can afford to make a sustainable purchasing decision as it is in crafting the awareness message.

Now that the concept of sustainability has taken hold in the mindset of consumers and has become a value proposition to corporations, environmentalists want to move the definition forward. They would like to see it changed to reflect corporate responsibility to market in a sustainable way, one that is profitable but responsive to actual worldwide need rather than rampant consumerism. Ideally, sustainable marketing would stop encouraging irresponsible over consumption in developed nations simply to improve profits.

The End Note

Lalitaji’s Surf has served its company well. When Hindustan Unilever’s (HUL) detergent portfolio was battling cut-throat local competition and price increase a few years back, Surf Excel (yesteryear’s Surf) stayed on course, analysts point out. HUL has lined up this year’s campaign for the detergent brand in tune with its theme for the last eight years-that stains are good (daag achche hain). Replacing iconic campaigns such as the Lalitaji one and Dhoonte reh jaoge (You will keep on searching for stains in vain), this line of creative rendition has the brand advocating that mothers should give their kids the freedom to get dirty and experience life, and rest in the knowledge that Surf Excel will remove those stains. Different situations, invariably involving muck and mud, showed kids not worrying about getting their clothes soiled.

The new campaign shows how his ready wit helps a kid get one up on the senior boys in school. Priya Nair, vice-president, laundry, HUL, says, “Detergent is a category where dirt and stains have always been made out to be bad. We wanted to play on a paradox of dirt being good by showing children doing good deeds and getting dirty in the process.”

In the ad, produced by Footcandles Films, a group of older boys bully a team of kids playing cricket into giving up the pitch. As one of the kids argue with the bullies, another comes along to soothe the frayed nerves. But he is pushed into the muddy ground. Just as the kids’ team and the audience think that the game is lost, the kid who was pushed into the puddle, smears on some more mud and runs after the older children with a proposal to hug and makeup. The bullies flee and the junior lot hug each other triumphantly.

Nair says, “We wanted to occupy the emotional space in a category that has always harped on functional benefits. Only a brand which is confident of its functional attributes can move on to emotional benefits. Our brand tracks have shown mothers instantly connecting with the various executions of the theme we have presented over the years.”

Arun Iyer, national creative director with Lowe Lintas & Partners, who created the campaign says, “In this day and age of rampant violence, we saw merit in depicting righteousness or badappan as it is called in Hindi. The ad shows that not only are stains good but love too is better than violence in conquering challenges.”

Analysts have pointed out that Surf Excel has not been subjected to the same pressures as HUL’s other detergent brands in the last few years. Launched in the 1950s, Surf Excel has undergone several avatars-from the plain vanilla Surf to Surf Excel and its variants. 

Marketing Strategies

Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services. A marketing strategy is composed of several interrelated components called the marketing mix: The Marketing mix consists of answers to a series of product and customer related questions.

The Marketing Mix

1.    Market selection

                        a.    Who are the customers or subset (segment) of customers you are targeting?

2.    Product planning

                        a.    What products are the company going to design or OEM for the selected customers?

                        b.     What are the product features uniquely targeting this market?

                        c.    How will the product be packaged?

3.    Pricing

                        a.    Pricing is a quantitative expression of the value of the product to the customer.

                        b.    Pricing should be designed like a feature consistent with the use of the product.

                        c.    What will you charge for and How much?

                        d.    How will the customer pay and when?

                        e.    See also the discussion of the Price/Features Matrix.

4.    Place

                        a.    Which channel, direct, wholesale or retail channels best moves and delivers the product                                and its benefits to the selected market?

5.    Promotion

                        a.    Positioning:    What is the message that states the purpose and benefits of the product in                                  the market and how it competes?

                        b.    Selling: Direct or indirect through others?

                        c.    Communications

                                        How will people be informed about your product, showing them how it can be                                  useful, and persuading them to buy it?

                                        What role should branding play?

                        d.    Support and Service

                                        How does the customer get help if needed to make the product work and                                         replacing or repairing it when it’s broken?

Segmentation-Marketing-Processing

In order to be an effective and efficient business, you should seek out your target customer market. There are three main issues to consider when determining your target market:

Market segmentation

Market segmentation involves grouping your various customers into segments that have common needs or will respond similarly to a marketing action. Each segment will respond to a different marketing mix strategy, with each offering alternate growth and profit opportunities.

Some different ways you can segment your market include the following;

• Demographics which focuses on the characteristics of the customer. For example age, gender, income bracket, education, job and cultural background.

• Psychographics which refers to the customer group's lifestyle. For example, their social class, lifestyle, personality, opinions, and attitudes.

• Behaviour which is based on customer behaviour. For example, online shoppers, shopping centre customers, brand preference and prior purchases.

• Geographical location such as continent, country, state, province, city or rural that the customer group resides.

Targeting

After segmenting the market based on the different groups and classes, you will need to choose your targets. No one strategy will suit all consumer groups, so being able to develop specific strategies for your target markets is very important.

There are three general strategies for selecting your target markets:

• Undifferentiated Targeting: This approach views the market as one group with no individual segments, therefore using a single marketing strategy. This strategy may be useful for a business or product with little competition where you may not need to tailor strategies for different preferences.

• Concentrated Targeting: This approach focuses on selecting a particular market niche on which marketing efforts are targeted. Your firm is focusing on a single segment so you can concentrate on understanding the needs and wants of that particular market intimately. Small firms often benefit from this strategy as focusing on one segment enables them to compete effectively against larger firms.

• Multi-Segment Targeting: This approach is used if you need to focus on two or more well defined market segments and want to develop different strategies for them. Multi segment targeting offers many benefits but can be costly as it involves greater input from management, increased market research and increased promotional strategies.

Prior to selecting a particular targeting strategy, you should perform a cost benefit analysis between all available strategies and determine which will suit your situation best.

Positioning

Positioning is developing a product and brand image in the minds of consumers. It can also include improving a customer's perception about the experience they will have if they choose to purchase your product or service.  The business can positively influence the perceptions of its chosen customer base through strategic promotional activities and by carefully defining your business' marketing mix.

Effective positioning involves a good understanding of competing products and the benefits that are sought by your target market. It also requires you to identify a differential advantage with which it will deliver the required benefits to the market effectively against the competition. Business should aim to define themselves in the eyes of their customers in regards to their competition.

Organizational Buying Behaviour

Organization buying is the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.

Organization buying is the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers. (Webster and Wind)

Some of the characteristics of organizational buyers are:

1. Consumer market is a huge market in millions of consumers where organizational buyers are limited in           number for most of the products.

2. The purchases are in large quantities.

3. Close relationships and service are required.

4. Demand is derived from the production and sales of buyers.

5. Demand fluctuations are high as purchases from business buyers magnify fluctuation in demand for their products.

6. The organizational buyers are trained professionals in purchasing.

7. Several persons in organization influence purchase.

8. Lot of buying occurs in direct dealing with manufacturers.

Organizational Buying Situations

Straight rebuy

In this buying situation, only purchasing department is involved. Thet get an information from inventory control department or section to reorder the material or item and they seek quotations from vendors in an approved list.

The "in-suppliers" make efforts to maintain product and service quality. The "out-suppliers" have to make efforts to get their name list in the approved vendors' list and for this purpose they have to offer something new or find out any issues of dissatisfaction with current suppliers and promise to provide better service.

Modified rebuy

In this buying situation, there is a modification to the specifications of the product or specifications related to delivery. Executives apart from the purchasing department are involved in the buying decisions. The company is looking for additional suppliers or is ready to modify the approved vendors list based on the technical capabilities and delivery capabilities.

New task buy

In this situation, the buyer is buying the product for the first time. As the cost of the product or consumption value becomes higher, more number of executives are involved in the process. The stages of awareness, interest, evaluation, trial, and adoption will be there for the products of each potential supplier. Only the products which pass all the stages will be on the approved list and price competition will follow subsequently.

Systems buy

Systems buying is a process in which the organization gives a single order to a single organization for supplying a full system. The buying organization knows that no single party is producing all the units in the system. But it wants the system seller to engineer the system, procure the units from various vendors and assemble, fabricate or construct the system.

Consumer Behaviour

Consumer behaviour can be defined as the decision-making process and physical activity involved in acquiring, evaluating, using and disposing of goods and services. This definition clearly brings out that it is not just the buying of goods/services that receives attention in consumer behaviour but, the process starts much before the goods have been acquired or bought. A process of buying starts in the minds of the consumer, which leads to the finding of alternatives between products that can be acquired with their relative advantages and disadvantages. This leads to internal and external research. Then follows a process of decision-making for purchase and using the goods, and then the post purchase behaviour which is also very important, because it gives a clue to the marketers whether his product has been a success or not.

Consumer behaviour is a complex, dynamic, multidimensional process, and all marketing decisions are based on assumptions about consumer behaviour. Marketing strategy is the game plan which the firms must adhere to, in order to outdo the competitor or the plans to achieve the desired objective. In formulating the marketing strategy, to sell the product effectively, cost-benefit analysis must be undertaken. There can be many benefits of a product, for example, for owning a motor bike one can be looking for ease of transportation, status, pleasure, comfort and feeling of ownership. The cost is the amount of money paid for the bike, the cost of maintenance, gasoline, parking, risk of injury in case of an accident, pollution and

frustration such as traffic jams. The difference between this total benefit and total cost constitutes the customer value. The idea is to provide superior customer value and this requires the formulation of a marketing strategy. The entire process consists of market analysis, which leads to target market selection, and then to the formulation of strategy by juggling the product, price, promotion and distribution, so

that a total product (a set of entire characteristics) is offered.

Sales Management

Companies use salespeople to find, sign, and service customers, and to build revenue and profits. Sales management is the discipline of maximizing the benefits a company and its customers receive from the efforts of its sales force. Here are what other experts say:

• “A sales manager can have a narrow or a broad spectrum of responsibilities including the following: estimate demand and prepare sales forecasts; establish sales force objectives and quotas; prepare sales plans and budgets; establish the size and organization of the sales force; recruit, select, and train the sales force; compensate the sales force; control and evaluate sales performances.”
  - Robert D. Hisrich and Ralph W. Jackson, Selling and Sales Management
• “Good sales management properly applied is the least expensive, most effective, way to increase dollars of revenue and margins, market share, cash flow, return on investment, and net present value, as well as to beat the competition and make yourself a hero. . . . It costs no more to properly hire, train, compensate, motivate, and evaluate salespeople. Effective time and territory management, forecasting, planning, budgeting, and good communication and control are no more expensive than performing these same functions poorly.”
  - Robert J. Calvin, Sales Management
• “Sales management: The attainment of sales force goals in an effective and efficient manner through planning, staffing, training, directing, and evaluating organizational resources.”
  - Charles M. Futrell, Fundamentals of Selling

Note that these functions are mentioned repeatedly in these summaries of sales management:

• Sales planning
• Recruiting / staffing
• Training
• Controlling / directing
• Evaluating
• Effectiveness / efficiency
• Compensation

Distribution Decisions

The customer has rightly become the central focus for designing and implementing all decisions in marketing. Most successful companies have remained close to the customer by developing a very clear understanding of ‘consumer behaviour’ dimensions. Distribution is one of the most critical parts of the marketing-mix strategy and consumer behaviour insights strongly drive the structural and process related decisions in this area. Distribution decisions are basically ‘channel management’ decisions and the service outputs of a distribution channel (namely lot size, waiting time, spatial convenience and variety) need to be structured differently for different target segments based on their pattern of preference. A consumer with limited purchasing power would prefer a smaller lot size of a category/product for which the distribution system will have to create long, third-party based, multi-level channels where successive break-of-bulk operations will take place till at the retail level very small bulks are broken to meet the small lot size demand of the customer.

Above-the-line and Below-the-line promotion

Above-the-line promotion involves the use of advertising to reach a mass audience. It is mainly used to reach consumers but it can be used in B2B markets. Advertising creates general brand awareness. Various media can carry the advertising message. These have different strengths and weaknesses:

• Television and radio can reach a wide range of consumers. HUL does not use these media for promoting to businesses. It is difficult to measure responses. It is also expensive a typical television advertising campaign might cost a lot.
• The national press and consumer magazines are aimed mainly at consumers. As market leader, HUL has high brand awareness. It does not need to promote widely to this audience. It is also difficult to measure responses from newspaper and magazine advertising.
• Trade journals target a business audience. HUL places articles or advertorials in selected trade journals when it needs to highlight its products and services to other businesses. It also does this to differentiate its brand from competitors. This is known as 'brand defence'.

Below-the-line promotion aims to reach consumers more directly through forms of

communication other than traditional advertising channels.

Partnership

For example, Hi-Tec has targeted consumers through collaborations with several organisations. It has set up partnerships with the UK's National Trust (to promote a new walking boot) as well as with the Caravanning Club (an audience who might be interested in instantly comfortable and lightweight outdoor footwear).

Sponsorship

It uses character branding to promote its products. This means that it appoints ambassadors such as Alexandre Poussin, the world explorer, and Martin Dreyer, from the world of extreme sports, to endorse its products. Hi-Tec also uses sponsorship to promote its brand. For example, it sponsors Amr Shabana, one of the world's leading squash players.

The company also uses other below-the-line activities:

• Direct mail – Hi-Tec emails customers, linking the message to the e-commerce part of Hi-Tec's website. This means people can go directly to the Hi-Tec online shop to buy goods.
• Exhibitions – Hi-Tec promotes at trade and consumer shows. These allow Hi-Tec to give retailers and consumers the opportunity to see the products first-hand.
• Sales promotions – H-Tec offers both retailers and consumers a range of sales incentives, including discounts, to encourage them to stock or buy its products.
• Branding – Hi-Tec supplies retailers with point-of-sale materials, such as packaging and store displays and provides training for retail staff within stores.
• Promotional materials - Hi-Tec's extranet website shares material such as brand photography and press releases so retailers can use this material in their own promotions. This raises the profile of the Hi-Tec brand and ensures that it is represented consistently.

Public Relations

Hi-Tec also uses PR (Public Relations) to create a positive public perception for its products. This includes issuing press releases, writing blogs and the use of social networking sites like Facebook.

Viral Marketing

A more recent way to take advertising to a different level is through viral marketing. This is a self-generating activity in which people pass on information to other consumers through the internet. It can spread a marketing campaign more widely and more quickly than traditional advertising. This is an example of consumers becoming advocates.