Fair trade marketing

Fair trade marketing is about making sure small producers are paid enough to cover their costs and have enough to live on.

The argument against fair trade is that it distorts the market and encourages oversupply, resulting in further price falls. The advantageous price paid to producers could result in dependency.

There are two basic components:

  • Providing a working model of international trade that makes a difference to producers and consumers.
  • Challenging business practice by modifying the dominant economic model.

The labelling/certification scheme is important in brand differentiation.

Fair trade works well with the idea of an ‘alternative high street’ – towns like Garstang and Hebden Bridge.

Mainstreaming can result in growth in what still remains a niche. However, mainstreaming could also result in dilution of the message.

Firms could attempt to enter the market and redefine it to better suit the marketing strategies.

Sustainability and green marketing

… is about:

  • Ensuring actions do not impact on the biosphere or threaten its long-term viability.
  • Balancing economic, environmental and social goals and consequences.

The diagram on page 21 of the B324 Block 3 course book is a good reminder of the main goals of sustainability, according to Schaltegger, et al., 2003.

Sustainable marketing is arguably an oxymoron because marketing is traditionally about driving consumption.

Some factors driving growth of green marketing:

  • Firms seeing it as an opportunity to differentiate.
  • Firms recognising their obligations to be more environmentally responsible.
  • Government bodies forcing firms to be more so.
  • Competitors adding pressure by being more green.
  • The increased high cost of waste disposal.

A key concept to remember is that of holism in green marketing.

Another interesting concept to remember is the dominant social paradigm and some of its key dimensions:

  • Economic dimension
  • Technological dimension
  • Political dimension

Some challenges for green marketing to be effective:

  • Must be led from the top.
  • Must be integrated.
  • Must be marketing led.
  • Must be backed by actions.

Firms must try to avoid “hitting the green wall”.

We are still very much stuck in the second age of green marketing!

Responsible marketing and CSR

CSR is about firms voluntarily taking responsibility for the wider consequences of their actions. These consequences are not necessarily intended by the firm, or paid for by its customers, but manifest as side effects.

Responsible marketing is CSR applied to marketing practice: that is, firms taking on responsibility for the wider social and environmental impacts of their marketing strategies.

Ideally, companies should engage in CSR because it is the right thing to do – accepting they have moral obligations to wider stakeholders and society, and not just their shareholders. However, there are also strategic reasons why companies might wish to engage in CSR:

  • Social responsibility is becoming more important to customers
  • Embracing CSR can enhance reputation and brand image.

There are three main attitudes companies may display towards CSR:

  • Doing the legal minimum in terms of compliance
  • Realising CSR is important in terms of reputation, but not really committed
  • Being genuinely committed to CSR and factoring it into all business decisions.

Carroll’s (1991) four-part model of CSR is an interesting one. Carroll argues that true social responsibility involves meeting all four layers of the model.

There is a diagram of the model on page 83 of the B324 Block 3 course book.

Ethical issues in marketing

Market Research:

  • Unauthorised use of personal data
  • Intrusive questions
  • Coercion
  • Deception around purpose/use of research
  • Causing embarrassment/hindrance/offence

Target Marketing:

  • Vulnerable consumers
  • Marketing to children
  • Customer exclusion (poor, racial & ethnic minorities, older consumers)

Products:

  • Kotler’s classification of products (e.g. Deficient products or Immediately satisfying products with negative long-term effects)
  • Product safety
  • Packaging issues
  • Planned obsolescence
  • Emotional appeals in branding

Price:

  • Anti-competitive pricing (predatory pricing, price fixing)
  • Price discrimination between consumers
  • Price deception (hidden costs)
  • Artificial promotions/sales
  • Price gouging (exceptionally high prices due to demand)

Promotion:

  • Untruthful advertising
  • Artificial endorsements
  • Misleading comparisons
  • Advertorials
  • Product placements
  • Reinforcing negative stereotypes
  • Unauthorised direct mail
  • Prizes with strings attached
  • Intrusiveness

Distribution (Place):

  • Channel stuffing
  • Bribes/gifts
  • Price fixing
  • Allowances/limits

Ethical conflicts in marketing

Arguments in favour of marketing:

  • Stimulates consumption
  • Benefits the economy
  • Improves living standards
  • Encourages efficiency and innovation

Arguments against marketing:

  • Focused on profit
  • Can have undesirable outcomes
  • Encourages materialism
  • Can have negative environmental impacts
  • Disadvantages some consumers
  • Power is in the hands of marketers

A useful diagram to refer to when considering ethical conflicts in marketing is Corey’s (1996) ‘Force Field’. This diagram illustrates some of the conflicting pressure marketing managers have to face, and is on page 17 of the B324 Block 2 course book.