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The library of essays of Proakatemia

Sustainable and ethical marketing



Kirjoittanut: Doneé Barendze - tiimistä SYNTRE.

Esseen tyyppi: Akateeminen essee / 3 esseepistettä.
Esseen arvioitu lukuaika on 14 minuuttia.

Written by Doneé Barendze, Thais Santos Araujo and Flóra Lang

 

1 INTRODUCTION 

In the 21st century we have finally concluded what sustainability actually is and how important it is for modern day business. To make it easier to understand, we have broken sustainability down into 3 different segments, more commonly known as “pillars of sustainability”. These pillars of sustainability put emphasis on the environment, economy and society. Another way to think of it is in terms of the planet, people and profit. We have changed our perspective on how businesses can approach sustainability and have focused mainly on the marketing aspects that need to be rethought if a business wants to make a sustainable difference in their approach to the market. (Purvis 2019)

 

2 ECONOMICALLY ETHICAL AND SUSTAINABLE MARKETING 

2.1 Puppet mastering economics and marketing 

The famous Derren Brown, British mentalist and illusionist is well known for playing mind games and “tricks” on innocent people. He uses unconscious manipulation in a way that makes people do exactly what he wants them to do, something like a puppet master. He is pushing the limits in new ways such as pushing his guests to do supreme stunts like attempting “armed robbery” and convincing them that they could have murdered someone. Brown is not as different from policymakers as one might think. Legislators all around the world have been using tactics not so different from Brown’s own, within areas of behavioral economics to subconsciously enforce the public to act in certain ways when it comes to topics such as:  paying taxes before the due date or diminishing racial prejudice when it comes to employment related decision-making. Although it seems harmless when magicians use magic and manipulation, it is a licit policy tool used in our modern-day economy to influence societal behavior on a larger scale, which can result in our whole economy thriving on subconscious market decisions. Marketing is a perfect example of where behavioral economics comes into play. These manipulation tools are being used by marketers to impact their target audience in different ways ranging from sales and services to brand and customer loyalty. The main question thus remains: Is it ethical? Is it ethical to unconsciously influence customers? Does it classify as magic and manipulation or is this a licit method to upgrade our society? This dilemma has been faced for quite some time already and there are many different points of views on it, but the facts remain: behavioral economics can be as good as it can be bad. This fully depends on the marketing intentions with which it is used. This is a tool that has been helping society in ways such as raising sales taxes to decrease the consumption of nicotine, but it has also played a major role in contributing to the issue of overconsumption that we are facing in the 21st century. The conclusion has been drawn that the tools themselves are not the issue, it is in the intentions of the marketer where the bigger issue lies. It depends on whether the marketing manipulation is meant to trick people into consuming useless things or if it is genuinely implemented to improve societal wellbeing. Behavioral economics can be justified by things such as improving societal lifestyles, health and economic solidity. Marketing has become the “bad guy” in recent years. The idea of promoting consumption and the usage of money by using behavioral economics has become very questionable and the outbursts about it in the media around this topic speak for itself. This is a bit of a catch 22 situation, since as with anything else, marketers also have the choice of promoting their products or services based on good or bad intentions. As sustainable entrepreneurs, it is essential to understand that our core intention around marketing needs to be to improve the economy, society and environment. There are a few ways to promote this intention. (Griffith 2017) 

  •  “Acting as a champion for the customer within the wider organization”

While other fields center around internal factors such as finances, human resources and performance, marketing is the one field in which one has to put oneself into the shoes of the customer and look at the bigger picture. It is a constant process of evaluating what is best for the profitability of the company as well as what is best for the customer – increasing customer encounters, supporting just pricing tactics, establishing customer and brand loyalty and using customer feedback to improve products and services. An increased awareness about customers unconscious driving forces will help enlighten us to meet their demands.  

  •  “Connecting people with opportunities that can benefit them”

Marketing communication mainly revolves around reaching the perfect target audience, people who are genuinely interested in buying a product or service. The point is not to “spam” potential customers with information about brand information, we all know this strategy is no longer serving a purpose at all and is instead misusing valuable resources and it only leads to bad brand perspectives. The point is actually targeting so specifically that every consumer reached will one way or another reap benefits from an opportunity they are presented with, if they decide to. An increased perception of consumer behavior can assist in targeting the ideal audience and avoiding unnecessary spamming. 

  •  “Improving customer experience”

Daily pleasant interactions between consumers and brands fully rely on carefully planned marketing strategies. Customers are facing overstimulation when it comes to making purchase related choices, it is not always enjoyable. It is mentally overstimulating and agonizing to stare at fifty different brands of the same product, trying to figure out which will be the best choice. Research has also proved that “post-purchase regret” is a big issue faced and creates a lot of mental tension on the consumer. The main marketing role is to create loyal and identifiable brands, which are known for providing a consistent pleasant experience both while purchasing and post-purchasing.  

It is inevitable for unethical marketing to take place and for marketers to use behavioral economics to negatively manipulate their consumers into purchasing bad intentioned products or services, but as sustainable entrepreneurs, it is important to take on a new perspective around this topic and to finally open our eyes to what is happening in the world around us.  

 

3 ENVIRONMENTALLY ETHICAL AND SUSTAINABLE MARKETING

3.1 Greenwashing

The marketing industry found in the massive number of environmental warnings over the last decades a big opportunity. Companies started to get the attention and trust of consumers by advertising green and eco-friendly efforts in the production and the life cycle of their products and services.   

The term “greenwashing” has been broadly used in discussions and the media. A good definition for the term is “the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service”. (Terrachoice 2010)

Developing environmentally friendly products and services is often not profitable. Due to the profit barrier, the misuse of eco-friendly terms has been grossly overused. The lack of a proper regulatory framework allowed in the past and keeps allowing now greenwashing in marketing. Any attractive green phrase or non-meaningful certificate is vaguely checked by clients and unsupervised by a meaningful organization.   

Currently, the biggest risk for a company to use greenwashing is to suffer a boycott by activist groups resulting in a downgrade of reputation and loss of trust. Once more, even if a company is caught in a misleading eco-friendly advertisement, it is still hard to verify the accuracy of facts because of the lack of rules on what is an extra effort and what the minimum required.  

3.2 Seven sins of greenwashing

Terrachoice is a Canadian-based environmental marketing agency acquired by UL Environment in 2010. They already posted the six sins of greenwashing back in 2007, and now the same report has an updated list of seven sins of greenwashing. The list supports the understanding of a company or a consumer to figure out whether a company’s marketing is greenwashing or not. As a consumer, it is still possible to identify, at a prominent level, companies greenwashing. When companies use terms such as “organic,” “sustainable,” “eco-friendly,” etc., they need to be asked about the “seven sins of greenwashing”. (Terrachoice 2010) The items named in the seven sins of greenwashing are very self-explanatory: the sin of the hidden trade-off, the sin of no proof, the sin of vagueness, the sin of worshiping false labels, the sin of irrelevance, the sin of lesser of two evils and sin of fibbing.   

For instance, Guy shared in his book the bank HSBC greenwashing case, which we can identify as the sin of the lesser of two evils. Guy studied a vast number of advertisements for over four years and wrote about many big companies claiming to be environmentally friendly. On the website of HSBC, you could see an endearing polar bear with the phrase “‘Stroke him.” After a click, the polar bear engages with the spectator and invites them to check their footprint with the phrase “Want to play a part in his future? Help us protect his world today.” Accessing the next page, you can see tips to decrease your personal footprint and the great efforts the bank is making to reduce it as well. At this point, the client visiting the website is already touched by the actions and efforts of the company and believes the brand would be environmentally sustainable. Even if HSBC, as a large company, has been making great efforts in-house for the environment and looking progressist, it’s HSBC’s investments where the real carbon issue exists. (Pearse 2012) HSBC invests in one of the biggest mining companies exporting coal in the world, Rio Tinto. They own about 20% of the company, taking into consideration only 20% of the carbon footprint of Rio Tinto, which would be fifty times higher than the carbon-neutrality efficiency of HSBC as a whole. This is a perfect example of the sin of the lesser of two evils because, for the final user or client, it’s really hard to know the real numbers or real footprint of a company. If a company’s marketing is not ethical, greenwashing is a powerful tool.  

The aim is not to support companies that use this serious topic to promote themselves while doing the opposite, harming the environment. A company does not need to be free of carbon footprint to use environmentally sustainable words in their marketing. The term nowadays should be correct to use when referring to the way an organization is being more efficient and effective in its environmental efforts. There is right now in the Europe union a regulatory text to disclaim what is to be sustainable and what is not, what is the minimum to do done and reported, and what needs to be done to have the extra mile in the topic (Council of the EU 2022). The extra mile will be relevant for companies because that is the piece they can use in their marketing to stand out in the crowd. The reports will be accredited by independent auditors or certifiers, and these reports’ rules will start to be applied from January 1st, 2024, and January 1st, 2026. The rules have different requirements deadlines. (Council of the EU 2022) 

When these changes start in force, the industry will need to do more than stand in the crowd in your marketing using environmentally friendly terms; the companies will need to understand their values and what they want to uphold in their journey. The reports will force this in-house reflection.  

For now, the clients can only rely on their research about the company or books like Greenwash by Pearse. Put pressure on the companies and encourage them to improve their environmental efforts and to be honest in their marketing approach. Stopping using the terms would not be the best possible achievement; the world needs real efforts. Although, marketing-wise, a collective effort, including small and large companies being honest about their product or service, would support users to decide on supporting a brand or not. The real change is more green innovation and real green products on the shelves. All the products will have a footprint, and the marketing of it needs to be honest. If they are doing a good job not stepping into one of the seven sins and going over their comfort zone to do something for the world, they should be very welcome to use environmentally friendly words in their marketing. Marketing can be intelligent and creative, but it’s not ethical to hide the planet’s destruction with charming ads for profit.  

 

4 SOCIALLY SUSTAINABLE AND ETHICAL MARKETING 

4.1 Social Marketing 

4.1.1 Introduction to social marketing 

Social marketing is a field of marketing that aims to influence one’s behavior regarding different social, economic, and environmental issues, such as healthcare, education, or pollution. (Kotler & Lee 2011, 2-3) The goal of social marketing is not to scare people, but to help them by offering solutions for things they don’t want to do and making those things desirable, fun, and easy to do. (Smith 2011) 

The term itself has been in use since the 1970s and although the idea is pure behind it, it got tangled up with corporations and governments trying to influence people, but with the wrong kind of message. The difference between social marketing and commercial marketing is that while both might influence one’s behavior, the main goal for the latter one is financial gain from that given campaign. (Kotler & Lee 2011, 14-15) 

4.1.2 The original 4 Ps plus another 4 P 

In traditional marketing, one needs to observe their target audience and act based on that. Usually, the 4Ps are used to determine a successful marketing campaign.  

  • Product: The product that is being sold, its quality, its brand, and its packaging, format (physical or virtual) and design. 
  • Price: The retail price of the product, possible discounts, payment methods, and options, such as monthly or annual payment plans. 
  • Place: The retail location of the product, delivery methods, and channels. 
  • Promotion: The sales channels of the product, such as email, advertising, and PR. 

In addition to the 4Ps, social marketing involves another 4P step for it to be successful. 

  • Publics: For example an organization that is passionate about the cause.  
  • Partnership: TV, radio, or advertising companies that can help create a channel to sell the idea or product. 
  • Policy: Looking at what policies the campaign creates or encourages. 
  • Purse strings: Funding, sponsoring, and budgeting of the product by corporations, organizations, or crowdfunding. 

(Maubert 2012)  

4.1.3 Social marketing example 

In the 1990s, in Texas, an average of 62% of children were put into car seats when driving. This number was only 19% in the Hispanic community. After research was conducted, it was found that among Hispanic families, most are religious and say that whatever happens on the road is God’s will. As a social marketing campaign by 2000, only 3 years later, the number of car seat users went up to 72%. The solution was simple but brilliant. By having priests bless the car seats, parents were more willing to use them. (This example reflects the principles of social marketing, where a campaign not only helps individuals but also society as a whole. (Kelly 2019) Social marketing promotes ethics and sustainability.  

4.2 Social sustainability 

4.2.1 Introduction 

Sustainability as a whole focuses on creating and sustaining an environment for both present and future generations. Social sustainability, which is one of the pillars, focuses on people and their lives, such as their living and working environment, education, and health. On top of focusing on the people, social sustainability also targets society, by magnifying the individuals in the equation. 

When one aims for social sustainability, especially in a company setting and can be targeted from many angles. 

Social sustainability in a non-business setting is a little bit different in some respects from the corporate one, as it observes more of the health and personal environment availabilities and choices (Ministry of Social Health 2020), however, the main frame is very similar. (To read more about Finland’s approach towards social sustainability, visit this link.) 

4.2.2 Stakeholders 

In order to ensure a sustainable work environment, the firm needs to make sure that all stakeholders, employees, all members of the supply chain, and customers, are well taken care of. In the case of the employees and the members of the supply chain, it means fair compensation and a mentally and physically safe work environment. From the customers’ perspective, it shows more from the pricing, the way they are dealt with, and similarly a mentally and physically safe shopping experience. (Fischhoff, Agarwall & Gilvesy 2021) 

4.2.3 Community 

Although communities are not as part of a company in a different way, they are still stakeholders, but external stakeholders to be specific. Each organization is part of a community and vice versa, the community is part of the organizations. They are in symbiosis, so in order to keep a well-working community, all parties considered need to listen to each other and tend to each other’s needs. While it goes both ways, companies usually have more power, so they do more of the listening and take this as an opportunity to give back to the community and society in general. (Fischhoff, Agarwall & Gilvesy 2021)  

4.3 Social responsibility in marketing and let’s wash 

4.3.1 Introduction 

Social responsibility in general is the principle of a business and its consumer that not only looks at economic (such as money) and practical (such as function) advantages when conducting their cooperation but also looks at the effects it leaves on the world. (Ganti 2022) When ‘marketing’ is added to the term, it merely changes the distance where business can reach. (The Investopedia Team 2022) 

4.3.1 Femvertising and femwashing 

Femvertising is used for the empowerment of girls and women by sending feminist messages, using different kinds of marketing tools. (Crase 2017)  

The representation in femvertising needs to be diverse and realistic to be successful. After a survey in the UK that The National Lottery and Sport of England has conducted, they realized that more women would like to do sports and be active. For this reason a commercial was made  within the “This Girl Can” campaign to encourage women, using the key components of being diverse and realistic, while not being aggressive and forceful about it. (Adobe Creative Cloud Express 2017) 

Femwashing is a marketing phenomenon that overuses and stereotypes women and feminism in order to be more profitable.  

Using feminism to increase sales isn’t usually the problem at its core, the issue starts when the company doing so doesn’t represent the same values behind the scenes. And while many companies actually represent the same value, they still capitalize from “genderizing” certain products, such as pink razors or women’s lotions. (Ballout 2021) 

Although many think that putting women on advertisements such as posters, say a few well-thought-out quotes about feminism, and give special offers to women is the way to solve gender inequality and create diversity, but it is far from enough if it even helps at all. (Jonek 2021)  

Jonek offers a few solutions to avoid femwashing, such as having a diversity strategy, setting KPIs (Key Performance Indicators), and having diversity included in the organization’s OKRs (Objectives and Key Results). Besides that, the more data is available, the better the operations can be adjusted. Although many companies would like to make the change, it is important to know, that it takes time, money, and other resources. (Jonek 2021) 

4.3.2 Rainbow-washing 

The term, rainbow-washing represents the overusing of the LGTBQ+ communities’ symbols by corporations, mostly the rainbow flag, while not making any meaningful changes that represent it in the operations. The representation is this case is surface level and periodic (pride month). Although it is difficult to look into what a company does within their four walls, but it can be seen, at least on a surface level, whether they are actual supporters or not. Actual supporters may give part of their profit from the rainbow-products and openly support LGTBQ+ communities through politics. Companies who don’t support LGTBQ+ people would only use the rainbow flag for visibility and to gain profit, while supporting anti-LGTBQ+ politicians and would discriminate against the queer community in their recruiting process. (Bandera 2022)  

4.3.3 Pinkwashing 

“Pinkwasher: (pink’-wah-sher) noun. A company or organization that claims to care about breast cancer by promoting a pink ribbon product, but at the same time produces, manufactures and/or sells products containing chemicals that are linked to the disease.” 

Although, in Finland it is restricted by law and companies need to pay for the usage of the pink ribbon (https://roosanauha.syopasaatio.fi/yhteistyon-periaatteet/), in many countries pinkwashing is an issue, and like in other “washing” terms, it is often only part of a marketing campaign. While, some businesses have good intentions, it is always better to directly donate towards the breast cancer foundations and research facilities. If one would like to buy a product that directly represents breast cancer, it is advised to look into the fine prints, where the given business is actually donating the money they promise, and how big share of the profit goes to such organizations. (Schumer 2022) 

5 CONCLUSION 

Overall, sustainability has many layers, and mixing it with ethical marketing can put one’s mind through a lot of thought. While the world is far from perfect, the situation in the past years has become better and more awareness surrounds sustainability, not only from the environmental but also from the perspective of the other pillars. Knowing the principles is key to successful, ethical, and sustainable marketing. 

  

  

References 

Adobe Creative Cloud Express. 2017. Femvertising: What Is It and How to Do It Well. Uploaded on 9.3.2017. Read on 26.11.2022. https://www.adobe.com/express/learn/blog/femvertising-what-is-it-and-how-to-do-it-well  

Ballout, N. 2021. Femwashing: Masking bad practices, not smells. Uploaded on 9.4.2022. Read on 27.11.2022. https://www.linkedin.com/pulse/femwashing-masking-bad-practices-smells-nathalie-ballout/  

Bandera, B. 2022. GENUINE PRIDE OR CORPORATE RAINBOW WASHING? Uploaded on 24.6.2022. Read on 27.11.2022. https://www.fairplanet.org/story/genuine-pride-or-corporate-rainbow-washing/  

Crase, A. n.d. #femvertising. Read on 27.11.2022. https://express.adobe.com/page/c3pWfMJ0gWJpl/  

Fischhof, M., Agarwal, D. & Gilvesy, J. 2021. What Is Social Sustainability? Uploaded on 13.12.2022. Read on 23.11.2022. https://nbs.net/what-is-social-sustainability/  

Frances, E. 2014. 6 sins of greenwashing/a study of environmental claims in North American Consumer Markets /TerraChoice Environmental Marketing Inc. (November 2007), Academia.edu. Available at: https://www.academia.edu/3480493/6_sins_of_greenwashing_A_Study_of_Environmental_Claims_in_North_American_Consumer_Markets_TerraChoice_Environmental_Marketing_Inc_November_2007_ (Accessed: November 27, 2022).  

Ganti, A. 2022. Social Responsibility in Business: Meaning, Types, Examples, and Criticism. Updated on 26.7.2022. Read on 26.11.2022.  

Godin, S. 2011. All marketers are liars: The power of telling authentic stories in a low-trust world. New York: Portfolio.  

Griffith, L. 2017. Behavioral Economics in Marketing. Is it Ethical? Read on 24.11.2022. https://www.linkedin.com/pulse/behavioural-economics-marketing-ethical-liz-griffith/   

 https://www.investopedia.com/terms/s/socialresponsibility.asp  

Jonek, D. 2021. Attention, Femwashing! Uploaded on 28.10.2021. Read on 22.11.2022. https://www.womentor.at/blog/attention-femwashing  

Lee, Nancy R. & Kotler, P. 2011. Social Behavior: Influencing Behaviors for Good. Forth Edition. Read on 23.11.2022  

Ministry of Social Affairs and Death. Socially Sustainable Finland 2020 – Strategy of Social Affairs and Health. Read on 27.11.202. https://julkaisut.valtioneuvosto.fi/bitstream/handle/10024/74057/URN%3ANBN%3Afi-fe201504223802.pdf?sequence=1  

New rules on corporate sustainability reporting: Provisional political agreement between the Council and the European Parliament (2022) Council of the EU. Available at: https://www.consilium.europa.eu/en/press/press-releases/2022/06/21/new-rules-on-sustainability-disclosure-provisional-agreement-between-council-and-european-parliament/ (Accessed: November 27, 2022).  

Pearse, G. 2012. Greenwash: Big Brands and Carbon Scams. Collingwood, Vic.: Black Inc.  

Purvis, B et al. 2019. Three Pillars of sustainability: In search of conceptual origins. Read on 28.11.2022. https://link.springer.com/article/10.1007/s11625-018-0627-5   

Schumer, L. What Is Pinkwashing? Some Breast Cancer Awareness Products Exploit the Disease for Profit. Uploaded on 18.2.2022. Read on 27.11.2022. https://www.goodhousekeeping.com/life/money/a39027557/what-is-pinkwashing-breast-cancer/  

Sins of greenwashing. n.d. UL Solutions. Available at: https://www.ul.com/insights/sins-greenwashing (Accessed: November 15, 2022).  

Smith, B. 2011. Reinventing Social Marketing. TEDxPennQuarter 2011. Uploaded on 25.10.2011. Watched on 22.11.2022. https://www.youtube.com/watch?v=IECY9LJvTf4  

Spacey, J. 2018. 5 Types of Marketing Economics. Read on 23.11.2022 https://simplicable.com/new/marketing-economics.   

Team, T.T.S. 2018. Terrachoice: The sins of greenwashing – home and Family edition 2010, Two Sides Nordics. Available at: https://nordics.twosides.info/NORD/terrachoice-the-sins-of-greenwashing-home-and-family-edition-2010/ (Accessed: November 15, 2022).  

The Investopedia Team. 2022. Why Is Social Responsibility Important in Marketing? Updated on 1.5.2022. Read on 27.11.2022. https://www.investopedia.com/ask/answers/042215/why-social-responsibility-important-marketing.asp  

The Mount 2012. Mount Minutes – What is Social Marketing. Uploaded on 17.12.2022. Watched on 22.11.2022https://www.youtube.com/watch?v=Bx_DnXenbHU   

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