Lecture Global marketing management (7th edition): Chapter 20 - Masaaki Kotabe, Kristiaan Helsen

Chapter sustainable marketing in the global marketplace. After studying this chapter you will be able to understand: The problems associated with cultural stereotypes, how culture influences behaviors at the negotiation table, common kinds of problems that crop up during international business negotiations, the similarities and differences in communication behaviors in several countries,...

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Global Marketplace

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Chapter Overview

1 Global Corporate Citizenship

2 Major Areas of CSR

3 The Case for Sustainability

4 Challenges for Sustainability Strategies

5 Sustainable Marketing and Global Consumers

6 Developing and Implementing a Sustainable

Strategy

7 Global Stakeholder Engagement Programs

8 Sustainable Marketing Mix Policy for the

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• While the idea that a company has societal

obligations has been around for decades, corporate social responsibility (CSR) has never been more

prominent on the corporate agenda.

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1 Global Corporate Citizenship

• Corporate social responsibility (CSR) is “the company’s status and activities with respect to its perceived societal obligations.”

• The European Commission defines CSR as “a concept whereby companies integrate social and environmental concerns in their business operations and in their

interaction with their stakeholders on a voluntary basis.”

• The United Nations Global Compact (UNGC) is a

framework that the UN established in 2000 to help

companies in adopting sustainable and socially

responsible strategies It stipulates 10 principles in the

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Exhibit 20-1:

The UN Global Compact’s Ten Principles

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1 Global Corporate Citizenship

• The ISO 26000 provides a template for social responsibility in areas such as:

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2 Major Areas of CSR

• Corporate social responsibility includes:

– Corruption and Bribery

– Environmental Concerns

• Energy consumption

• Basic brand attributes

• Desire to buy green/green big-ticket items

• Attention to packaging

– Supply Chain Accountability

– Commitment toward customers

– Community Support

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Exhibit 20-4: Examples of Water Saver

Initiatives

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Exhibit 20-5: Interbrand 2014 Green Brands

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Exhibit 20-6: Overall Access to Nutrition

Ranking

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3 The Case for Sustainability

• Reputation in Consumer Markets

– In a 2002 survey covering 12 countries on why

consumers pick global brands, “social responsibility” came out as the third-most-important element

– Sustainability means meeting today’s needs while

safeguarding resources for the future

– Firms with a good CSR image could also get

rewarded with higher brand loyalty and the ability to charge a price premium

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3 The Case for Sustainability

– Reputation in labor and equity markets: being

perceived as a good corporate citizen can help a

company in recruiting the best talent and keeping its employee turnover rate low

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4 Challenges for Sustainability Strategies

• Cross-border differences in cultural values and

ethical conduct create moral confusion

– Cultural relativism vs ethical imperialism

– Poor infrastructure can force companies to scale back their aspirations

– Decisions in one country can affect a company’s

global image

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Exhibit 20-7: Conflicting CSR Images

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5 Sustainable Marketing and Global

Consumers

• With the rise of social media, consumers are rapidly alerted when a global brand has a harmful impact at the other end of the planet Consumer behaviors are also affected by:

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Exhibit 20-8: GFK Roper’s Global Segmentation of Environmental Consumers

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Exhibit 20-9: The Biggest Challenges to

Buying Green Products/Services

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6 Developing and Implementing

a Sustainable Strategy

• To create a suitable CSR strategy, a company must:

– Set objectives and targets

– Understand the operating environment

– Specify strategic sustainability initiatives

– Implement

– Develop metrics for monitoring

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Exhibit 20-10: Highlights of H&M’s

Conscious Actions in 2012

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Exhibit 20-11: Colgate-Palmolive’s Key Performance Sustainability Indicators

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Exhibit 20-12: Starbuck’s Global Responsibility Plan – Goals and Progress

(2014)

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7 Global Stakeholder Engagement

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8 Sustainable Marketing Mix Policy

for the Marketplace

• Meeting consumer needs and desires creates

corporate challenges for global companies in areas of:

– Sustainable packaging

– Sustainable pricing

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Exhibit 20-13: Coca-Cola Billboard in the

Philippines Absorbs Air Pollution

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8 Sustainable Marketing Mix Policy for the

Marketplace

• Developing sustainable products and services

– Sustainable products or services often suffer from a poor image in the mind of consumers

– Some multinationals have focused on making their product development and testing more sustainable.– Some steps focus on the ways products are made by striving to save energy and lower water use at

manufacturing facilities

– Sustainable packaging initiatives focus on the three

Rs of remove, reduce, and recycle

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8 Sustainable Marketing Mix Policy for the

Marketplace

• Sustainable Pricing: a major obstacle for many

customers

– Highlight to consumers the overall savings potential of

products during their lifespan

– Premium pricing as a prestige signal

• Communication and Sustainability

– Inform the public about the firms’ firm’s sustainability

achievements

– Persuade that products offer good value

– Educate consumers

• Sustainability and Distribution Channels

– Support small-scale distributors

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Exhibit 20-15: Percentage of Consumers Not

Willing to Pay a Price Premium for Green

Products

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9 Crisis Management and Consumer

Boycotts

• Crisis can damage a company’s reputation

– Have a crisis management team

• Monitor all situations

• Handle crisis vigorously

• Build a reputation to protect it

• Communicate with stakeholders during a crisis

• Be prepared to rebuild brand reputation after the crisis

is resolved

– Consumer boycotts

• Companies should stay out of these issues if possible.

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