PR OFESSUR FR B E TR IEB S W IR TS CHA FT S L EHRE BR AU- UND L EB EN S M I T TE LI N D US TR IE

Marketing and Management in the Food Industry Discussion Paper No. 1

Sustainability Marketing: Blueprint of a Research Agenda

Frank-Martin Belz

May 2005

ISBN 3-938236-00-0

Marketing and Management in the Food Industry Discussion Paper No. 1

Sustainability Marketing: Blueprint of a Research Agenda

Frank-Martin Belz

____________________________________________________________________
Technische Universitt Mnchen (TUM Business School) Professorship for Brewery and Food Industry Management Alte Akademie 14, D 85354 Freising, Phone +49-8161-71 3279 Fax +49-8161-71 3209 http://www.food.wi.tum.de

Kurzzusammenfassung
Nachhaltigkeit ist eine zentrale Herausforderung fr das Marketing im 21. Jahrhundert. Durch die Integration von sozial-kologischen Aspekten kann Marketing wertvolle Beitrge fr eine nachhaltige Entwicklung leisten. In dem vorliegenden Papier wird eine in sich geschlossene Konzeption des Nachhaltigkeits-Marketing entwickelt, die aus sechs Schritten besteht: Analyse der sozial-kologischen Probleme; Analyse des Konsumentenverhaltens; normatives Nachhaltigkeits-Marketing; strategisches Nachhaltigkeits-Marketing; operatives Nachhaltigkeits-Marketing und transformatives Nachhaltigkeits-Marketing. Jeder Schritt wird in Krze erlutert. Zum Abschluss werden ein Forschungsprogramm entworfen und offene Forschungsfragen gestellt. Die Ziele bestehen darin, konzeptionelle Grundlagen zu schaffen und weitere Forschung in dem faszinierenden Bereich des NachhaltigkeitsMarketing anzuregen.

Schlsselbegriffe
Marketing, Nachhaltigkeit, nachhaltige Entwicklung

Abstract
Sustainability is one of the main marketing challenges in the 21st century. By integrating social and ecological criteria, marketing may make valuable contributions to sustainable development. The present paper proposes a comprehensive conception of sustainability marketing, defined by six steps: analysis of socio-ecological problems; analysis of consumer behaviour; normative sustainability marketing; strategic sustainability marketing; instrumental sustainability marketing; and transformational sustainability marketing. Each step is described in some further detail. In the end, a blueprint for a research agenda is suggested and open research questions are raised. The aims of the paper are to clarify the concept of sustainability marketing and to inspire further research in this fascinating field.

Keywords
Marketing, sustainability, sustainable development

Contents

1 2 3

Sustainability as a Marketing Challenge ................................................... 1 Definition of Sustainability Marketing ...................................................... 1 Conception of Sustainability Marketing .................................................... 3
3.1 3.2 3.3 3.4 3.5 3.6 3.7 Socio-Ecological Problems......................................................................................4 Consumer Behaviour...............................................................................................8 Normative Aspects ................................................................................................11 Strategic Aspects ....................................................................................................13 Instrumental Aspects.............................................................................................17 Transformational Aspects.....................................................................................19 Specifics...................................................................................................................21

Research Agenda......................................................................................... 23

About the Author...................................................................................................... 1

Sustainability Marketing

Sustainability as a Marketing Challenge

Ecological and social issues are mega trends of the twenty-first century. Considering the growth of the world population from 6 billion in 2000 to approximately 9 billion in 2050 these problems will not vanish. In this future scenario marketing plays an ambivalent role: On the one side marketing promotes a consumer society and materialistic lifestyles, which impose problems on the social and natural environments. On the other side marketing helps develop and diffuse sustainability innovations such as solar houses, renewable energies, hybrid cars, organic food, and fair trade products. Key questions in sustainability marketing are: How do you develop and market sustainable products and services successfully in and beyond niches? Sustainability marketing delivers superior value to customers in a way that it maintains or improves the consumers well-being as well as the social and ecological environments. It creates customer value, social value and environmental value. The present paper defines sustainability marketing (chapter 2), proposes a comprehensive conception of sustainability marketing (chapter 3) and raises open research questions (chapter 4). The aims of the paper are, first of all, to clarify the concept of sustainability marketing and secondly, to inspire further research in this area by setting an agenda.

Definition of Sustainability Marketing

Sustainability marketing embraces the idea of sustainable development, a development that meets the needs of the present without compromising the ability of future generations to meet their own needs (World Commission on Environment and Development 1987). Meeting the needs of the present means intra-generational equity, i.e. equality between North and South. Considering the needs of future generations implies inter-generational equity, i.e. equality between one generation and another. Sustainable development is a continuous process whose eventual outcome will be sustainability with its three components: environmental, social and economic. Although there is a lot of win-win-win talk which highlights the congruence of economic, environmental and social goals, sustainable development is not a concept of harmony. Sustainable development deals with trade-offs, continuously balancing economic, environmental and social goals in a responsible way. In marketing, these kinds of conflicts and trade-offs become more obvious than in any other business function. Marketing, in general, may be defined as building lasting and profitable customer relationships (Kotler/Armstrong 2004, p. 5). Far from telling and selling, modern marketing analyses customer needs and wants, develops products that provide superior value, and prices,

Frank-Martin Belz

distributes and promotes them effectively to selected target groups. Two core marketing activities are attracting new customers by promising superior value and keeping current customers by delivering satisfaction. Customer focus, value and satisfaction are not ends in themselves, but means to increase sales and profits. Sustainability marketing goes beyond conventional marketing thinking. If marketing is about satisfying customer needs and building profitable relationships with customers, sustainability marketing may be defined as building and maintaining sustainable relationships with customers, the social environment and the natural environment. By creating social and environmental value, sustainability marketing tries to deliver and increase customer value. Sustainability marketing aims at creating customer value, social value and environmental value, meeting the triple bottom line (Elkington 1999). Similar to the modern marketing concept, sustainability marketing analyses customer needs and wants, develops sustainable products that provide superior value, and prices, distributes and promotes them effectively to selected target groups. Throughout the whole process sustainability marketing integrates social and ecological aspects. Sustainable marketing is not synonymous to sustainability marketing. The adjective sustainable means durable, long-lasting, or ever-lasting. Hence, sustainable marketing is often interpreted as a kind of marketing, which builds long-lasting customer relationships effectively without any particular reference to sustainable development or consideration of sustainability issues. That is why the term sustainable marketing might be misleading and is not used here. Green marketing (Charter/Polonsky 1999; Ottman 1998; Peattie 1992), eco-marketing (Belz 2001; Meffert/Kirchgeorg 1998) and environmental marketing (Coddington 1993; Peattie 1995; Polonsky/Mintu-Wimsatt 1995) are concepts closely related to sustainability marketing. Developed during the 1990s, these concepts mainly focus on the natural environment. They are concerned with the integration of ecological aspects into conventional marketing thinking. Societal marketing is a term coined by Kotler/Armstrong (2004, p. 14-15). Societal marketing questions whether the pure marketing concept overlooks possible conflicts between consumer short-term wants and consumer long-run welfare: Is a company like McDonalds, for example, that senses, serves, and satisfies individual short-term wants, always doing what is best for consumers and society in the long run? The basic idea of societal marketing is to balance company profits, consumer wants, and societys interest. Societal marketing is one of the principles of enlightened marketing, which is a positive response to consumerism and environmentalism (Kotler/Armstrong 2004, p. 627-656). Other principles of enlightened marketing are consumer orientation, innovation, value, and sense-of-mission. These principles also apply to sustainability marketing.

Sustainability Marketing

Corporate Social Responsibility (CSR) refers to the responsibility of companies to do good deeds for the social and natural environment (e.g. donations, scholarships, and sponsoring). If CSR goes beyond corporate giving and relates to the nature of the business, it is close to sustainability marketing. Often, it is argued that CSR creates customer value, retains current customers and attracts new ones. However, the link between CSR and customer relationships is rather weak and empirical evidence is widely missing. Unlike sustainability marketing, CSR does not focus on delivering customer value. Seldom does CSR deal with the tradeoffs and the difficult task of balancing economic, ecological and social goals, especially evident in the field of sustainability marketing.

Conception of Sustainability Marketing

Sustainability marketing integrates social and ecological criteria into the whole process of marketing. From a managerial point of view, six steps can be differentiated (exhibit 1):

1. Step: Analysis of Socio-ecological Problems

2. Step: Analysis of Consumer Behavior

3. Step: Normative Sustainability Marketing

4. Step: Strategic Sustainability Marketing

5. Step: Instrumental Sustainability Marketing

6. Step: Transformational Sustainability Marketing

Exhibit 1: Conception of Sustainability Marketing

1. Step: Analysis of the social and ecological problems, generally and specifically with respect to products which satisfy customer needs and wants;

2. Step: Analysis of consumer behaviour with special respect to social and ecological concerns;

Frank-Martin Belz

3. Step: Corporate commitments to sustainable development in the mission statement, development of sustainability visions, formulation of sustainable principles and guidelines, setting of socio-ecological marketing objectives and goals (normative aspects of sustainability marketing);

4. Step: Sustainability segmentation, targeting and positioning, and timing of market entry (strategic aspects of sustainability marketing);

5. Step: Integration of social and ecological criteria into the marketing-mix, i.e. products, services and brands, pricing, distribution and communication (instrumental aspects of sustainability marketing);

6. Step: Participation in public and political change processes, which transform existing institutions towards sustainability (transformational aspects of sustainability marketing).

The first two steps begin with an analysis of the companys situation. In sustainability marketing it is crucial not just to know consumer needs and wants, but also to find out about the ecological and social problems of products along their whole life cycle from cradle to grave. The intersection of socio-ecological problems and consumer wants sets the ground for sustainability marketing. It indicates new market opportunities for innovative companies. Steps three to five describe the implementation of sustainability marketing. Social and ecological criteria are fully integrated into the mission statement, strategies and marketing-mix. Hence, sustainability marketing moves from analysis to action. Step six is one of the specifics of sustainability marketing. It is about the commitment of companies to sustainable development and their active participation in public and political processes in order to change the existing framework in favour of sustainability. In the following chapters, the six steps of sustainability marketing will be discussed in some more depth.

3.1

Socio-Ecological Problems

The overall human pressure on the natural environment is the result of three factors: population, consumption per person and technology. This can be expressed through the famous IPAT-formula introduced by Ehrlich/Holdren (1971):

Impact = Population x Affluence x Technology

Sustainability Marketing

Population is the total number of people living on planet Earth, affluence relates to the amount each person consumes, and technology determines how many resources are used and how much waste or pollution is produced for each unit of consumption. The world population grew from 2.5 billion in 1950 to 6 billion in 2000 and is projected to grow to 8.9 billion by 2050 (United Nations 2003, p. 1). In the future, most of the population growth is expected to take place in developing countries, whereas the population in industrialized countries is likely to stagnate or even decline (e.g. Japan, Germany, France and Italy). During the twentieth century, the consumption per capita grew significantly in industrialized countries. Most people in North America, Japan and Germany, for example, possess material goods like cars and computers, television and telephones, food and fancy clothes. They enjoy a kind of lifestyle never ever experienced before in the history of mankind. The majority of people in developing countries strives for such a lifestyle. During the twenty-first century the consumption per capita in developing countries like China and India is expected to grow further. In 2002 there were already approximately 239 million people in China and 121 million people in India belonging to the global consumer class (Gardner/Assadourian/Sarin 2004, p. 6-7). This group is larger than the consumer class in Western Europe. The technology part of the formula can be broken down into two separate elements: the amount of resources used to produce each unit of consumption (input side), and the amount of waste or pollution generated by each unit of consumption (output side). An increase of energy efficiency and resource productivity decreases the human impact on the natural environment. Some argue that an increase of energy efficiency by the Factor 4 will help us reduce the worldwide energy consumption and stabilize the global climate while maintaining our lifestyle (von Weizscker/Lovins/Lovins 1998). Others argue that more radical changes and an energy efficiency revolution by the Factor 10 are needed (Weaver/Schmidt-Bleek 2000). The best-known standpoints often emphasize only one of the three factors as the dominant cause of the rising human impact on the natural environment: inexorable population growth, excessive consumption, or polluting technology. The IPAT-formula gives the big picture and makes clear, that all three factors must be included, although their relative importance may vary at different times and in different places (Harrison/Pearce 2001, p. 7). Where does marketing come in? As said before, marketing plays an ambivalent role: On the one hand it promotes a consumer society and materialistic lifestyles, which impose problems on the social and natural environments. On the other hand marketing helps develop and diffuse sustainability innovations to make the energy efficiency revolution come true. Thus, sustainability marketing is mainly concerned with the third part of the IPAT-formula. Sustainability marketing can also facilitate new lifestyles, which are less materialistic and more sustainable, dealing with the second part of the equation. However, sustainability marketing

Frank-Martin Belz

is not suitable to deal with world population growth. Clearly, here are the limits of sustainability marketing. One of the main political goals is to fulfil basic human needs. Human needs are one of the basic concepts underlying marketing (Kotler/Armstrong 2004, p. 6). Human needs include: basic physical needs for food, clothing, warmth, and safety; social needs for belonging and affection; and individual needs for knowledge and self-expression. Wants are the forms that human needs take as they are shaped by society and individual personality (Kotler/Armstrong 2004, p. 6). The need for food may be satisfied with a hamburger or a vegetarian dish. If wants are coupled with buying power, they create demand. Not just from a social, but also from an ecological point of view, basic physical needs are quite important. As calculated by the Wuppertal Institute for Climate, Environment and Energy, the fulfilment of needs for food, clothing, warmth and safety induces a large amount of energy and material flows. Take Germany as an example of an industrialized country: In this case, housing and living, fulfilling the basic human needs for shelter, warmth, and safety, are responsible for approximately thirty percent of the energy and material resources. The food chain from stable to table consumes one fifth of the material and energy resources (BUND/Misereor 1997, p. 103, 108). The high amounts of material and energy flows often impose problems on the natural environment.

Living E ating Leisure Other

29% 38% 31% 32%

20% 13%

17%

20%

Material Flows

Energy Flows

Exhibit 2: Basic Human Needs, Material and Energy Flows as exemplified by Germany

The differentiated analysis of the material and energy flows builds a bridge between aggregated environmental data and consumption. The material and energy flows on national levels are hints to look at, when it comes to socio-ecological problems. However: Which impact do specific products and services have on the natural and social environments? Which are

Sustainability Marketing

the main ecological and social problems in the case of commercial buildings, coffee, cotton shirts, and computers? To identify the socio-ecological problems, the whole life cycle of the product from cradle to grave has to be taken into account. The stages of the socio-ecological product life cycle include: extraction of raw materials, transportation, production of preproducts, production of final products, distribution, use, re-use, disposal, and recycling (Welford 1995, p. 99). The socio-ecological product life cycle is not to be mistaken for the product life cycle (PLC), which is commonly used in marketing and which has five distinct stages: product development, introduction, growth, maturity, and decline (Kotler/Armstrong 2004, p. 330-337). The social and ecological problems vary from one product category to another. Exhibit 3 shows the social and ecological problems of brick buildings. On the horizontal axis of the matrix are the stages of buildings, on the vertical axis the different ecological and social dimensions. The black fields in the matrix indicate high impact on the natural and social environments, the grey fields medium impact, and the white ones low impact. Life Cycle Analysis (LCA) tries to quantify the impact on the natural environment and health by weighting the different factors and adding them up to a single factor.

Maintenance Demolition
Low Impact

Raw and building Material

Impact Waste Soil Water Air Noise Energy Resources Ecosystems Health
Legend:

High Impact

Medium Impact

Exhibit 3: Socio-Ecological Impact Matrix - Example Brick Buildings

Reuse Recycling Waste

Transportation

Stages

Planning

Construction process

Use

Frank-Martin Belz

Generally, there are ecological problems on global, regional and local levels. Climate change, the destruction of the ozone layer and the loss of biodiversity are global problems asking for international solutions and actions. Soil erosions, water shortages, and noise emissions are rather regional and local problems, to be solved on national and local levels. Regarding social problems, a differentiation between industrialized and developing countries is useful. As a rule basic human needs are fulfilled in industrialised countries. The majority of people is well-off. In this context social problems are matters of a good life, including well-being, health, obesity, high rates of unemployment, etc. In developing countries, especially in least developed countries, basic human needs are not necessarily fulfilled. Often, social problems are a question of survival, dealing with poverty, hunger, malnutrition, child labour, discrimination of women, and so on. Due to globalisation, companies increasingly engage in these countries, finding themselves confronted with new and diverse, sometimes even contradictory ecological, social and economic demands (Crane/Matten 2004, p. 17).

3.2

Consumer Behaviour

Consumer behaviour includes the purchase, use and post-use of products. The main body of marketing literature is primarily concerned with the first stage, the process and act of buying (Kotler/Armstrong 2004, p. 178-205). In the context of sustainability, all three stages of consumer behaviour are important. Many significant contributions that consumers can make towards environmental and social quality come in product use, maintenance and disposal, or in delaying a purchase, or avoiding it altogether (Peattie 1999, p. 66). Sustainable consumption considers ecological and social criteria during all three stages, i.e. the purchase, use and post-use of products. It responsibly balances ecological, social and economic criteria.

What do I want?

Where is my list of prices and features? Information search

What are the benefits for me?

How soon can I buy one?

When shall I buy a new one?

Need Recognition

Evaluation of alternatives

Purchase decision

Postpurchase behaviour

Do I really need it?

Where is my sustainable consumer guide?

What are the socio-ecological costs?

Shall I make a purchase?

How long can I make it last?

Exhibit 4: Consumer Buyer Decision Process Sources: Kotler/Armstrong 2004, p. 198 and Peattie 1995, p. 84

Sustainability Marketing

The buyer decision process consists of five stages: need recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behaviour. The model in exhibit 4 shows all considerations that arise when consumers face a new and complex purchase situation. Throughout the process the average consumer asks: What do I want? Wheres my list of prices and features? What are the benefits for me? What shall I purchase? How soon can I buy one? And when shall I buy a new one? In addition to that, the socioecological consumer also raises questions like: Do I really need it? Wheres my sustainable consumer guide? What are the socio-ecological costs? Shall I make a purchase? How long can I do without one? How long can I make it last? How can I best use the old one (Peattie 1995, p. 84)? These twofold questions underline the ambivalent character of products: On the one side products create socio-economic values, on the other side they also imply impact on the ecological and social environments. When a customer has a choice between two or more product alternatives, he or she will take the offer, which promises the highest perceived value a customers evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers (Kotler/Armstrong 2004, p. 17).

Use Benefits

SelfEsteem

Recognition

Edification

Benefits

Individually perceived Benefit-Cost-Balance

Costs Product Price Costs of Purchase Costs of Use Costs of Post-Use

Exhibit 5: Customer Perceived Value Difference between all Benefits and Costs Source: Belz 2001, p. 78

Generally, there are four different kinds of product benefits: The basic benefit is the function of the product. Additional benefits are self-esteem, recognition, and edification from doingit-yourself. Take, for example, a sports car: Such a car is far more than a mode of transportation (use benefits). It is prestigious and stylish, thus filling the owner with pride (self-esteem) and raising his popularity (recognition). Tuning the car is great fun for fanatics uplifting

Frank-Martin Belz

their spirits (edifaction). The evaluation is not complete without considering the costs, which go beyond the price of a product. Purchase costs, usage costs, and post-usage costs have to be taken into account as well. Purchase costs include the costs for searching a product (search costs), gathering information on prices, specific features and comparing it to alternative marketing offers (information costs), and finally getting the product (transportation costs). Usage costs are often underestimated and not taken into account at the moment of purchase. In the case of long-lasting products such as houses, cars, washing machines, and refrigerators, a considerable amount of money is paid for energy during the usage stage. Customers do not judge product benefits and costs accurately on an objective basis. They act on perceived value, which may differ largely from one customer to the other (Kotler/Armstrong 2004, p. 17). The individual perception and evaluation of benefits and costs is based on a number of personal and situational factors such as socio-ecological awareness, socio-ecological knowledge, disposable income, peer group, and purchasing situation. Based on individually perceived benefits and costs three different groups can be differentiated: Socio-ecological actives; those that can be socio-ecologically activated; and socio-ecological passives (Belz 2001, p. 79). The first group has a very high level of socio-ecological consciousness (socio-ecological active). From their point of view, social and environmental product features go along with a lot of self-esteem and recognition. That is why they are willing to make compromises with other product benefits and/or accept higher costs. Usually, this group is rather small and represents the innovators of sustainable products. The second group has a high level of socioecological consciousness (those, that can be socio-ecologically activated). They associate social and environmental product features with some self-esteem and recognition. The members of this group are often willing to pay a higher price for the perceived value added, but they are reluctant to make any compromise when it comes to the quality of the product. To a certain extent, this group is open for sustainability innovations. They represent the adopters. The third group is not particularly conscious about social and ecological issues (socio-ecological passive). Socio-ecological product features are not perceived as value added. Thus, this group is not willing to make any compromises with respect to performance or price. They represent the average consumer and the laggards of sustainability innovations. This kind of differentiation is rather general, but gives a good first insight into the target groups of sustainability products and markets. Consumer behaviour is not necessarily consistent with respect to social and environmental issues. It is rather product and context specific. One and the same consumer may pay a lot of attention to socio-ecological criteria in one area (e.g. food), whereas in another he does not care about it at all (e.g. automobiles, leisure). If social and ecological aspects are entangled with individual benefits such as taste, health etc., they have a good chance of being mar-

10

Sustainability Marketing

keted successfully. To sum it up: Marketing sustainable products successfully means taking all benefits and costs from the customers point of view into account. If sustainable products have a higher perceived value than conventional products, they will be bought and used.

3.3

Normative Aspects

In the beginning of the twenty-first century many companies claim to be committed to sustainable development, assuming economic, ecological and social responsibility. Multinational corporations as well as small- and medium-sized companies explicitly express their commitment towards sustainability (exhibit 6).

Company BP

Sustainability Statement

Source

Sustainability means the capacity to endure as a www.bp.com group, by renewing assets, creating and delivering Sustainability products and services that meet the evolving needs 2004 of society, delivering returns to our shareholders, attracting successive generations of employees, contributing to a flourishing environment and retaining the trust and support of our customers and the communities in which we operate.

Report

Dean Foods

Dean Foods is committed to nurturing and support- www.deanfoods.com ing the communities where we do business Our About us: Community community support efforts are focused in three main Involvement areas - health/nutrition, education/arts and environmental stewardship/conservation. IKEA wants its products to have the minimum pos- www.ikeasible impact on the environment. And for these group.ikea.com products to be manufactured in a socially responsiOur Responsibility ble manner. Shell companies commit: To conduct business as www.shell.com responsible corporate members of society, to observe Statement of General the laws of the countries in which they operate, to Business Principles express support for fundamental human rights in line with the legitimate role of business and to give proper regard to health, safety and the environment consistent with their commitment to contribute to sustainable development.

IKEA

Shell

11

Frank-Martin Belz

Toyota

We, Toyota Motor Corporation and our subsidiaries, take initiative to contribute to harmonious and sustainable development of society and the earth, based on our Guiding Principles. We aim for growth that is in harmony with the environment throughout all areas of business activities. Wherever we do business, we actively promote and engage, both individually and with partners, in philanthropic activities that help strengthen communities and contribute to the enrichment of society.

www.toyota.co.jp Responsibilities: Contribution towards Sustainable Development

Unilever

We are committed to managing our social and envi- www.unilever.com ronmental impacts responsibly, to working in partOur values: Environnership with our stakeholders, to addressing social ment and Society and environmental challenges and to contributing to sustainable development. www.wholefoodsmar ket.com Our core values: Caring about Our Communities & Our Environment

Whole Foods We support sustainable agriculture. We respect our environment. We recognize our responsibility toMarket wards our local communities. We give a minimum of 5% of our profits every year for community projects. Our trade partners are our allies in serving our stakeholders. Exhibit 6: Corporate Commitments to Sustainable Development

One critic sarcastically says: It would be a challenge to find a recent annual report of any big international company that justifies the firms existence merely in terms of profit, rather than service to the community. Such reports often talk proudly of efforts to improve society and safeguard the environment by restricting emissions of greenhouse gases from the staff kitchen, say, or recycling office stationary before turning hesitantly to less important matters, such as profits (Crook 2004, p. 3). No doubt, there is a grain of truth in this critical remark. An interesting field for future research is the discrepancy between rhetoric and reality. Nevertheless, corporate sustainability statements, guidelines, and principles are important normative foundations for sustainability marketing. It is signalling to build up reputation and trust, both internally and externally. On the one hand sustainability statements and guidelines may help marketing management and employees in strategic and instrumental decision making. On the other hand they send signals to society and market partners along the whole product chain to strive for sustainability. Well-intended corporate sustainability statements and codices are of little use, if they are not integrated in the goal-setting process. Sometimes ecological, social and economic objectives

12

Sustainability Marketing

are complementary. The win-win-win rhetoric is based on this assumption and presents some anecdotal evidence for such instances. However, in many cases there are trade-offs between ecological, social and economic objectives, which have to be carefully and responsibly solved by decision makers. Finding the right balance between ecological, social and economic goals is a demanding challenge and a continuous process. It also depends on institutions: The more institutions are in favour of sustainability and the more external effects are internalised, the easier it is for decision-makers in marketing to balance the triple bottom line. The socio-ecological objectives in sustainability marketing can be qualitative (e.g. the enhancement of renewable energies) or quantitative (e.g. 20% of the total revenue with renewable energies in 2020). It is problematic if these aims are counterbalanced by evaluation and income systems based on short-term profits.

3.4

Strategic Aspects

If companies are committed to contribute to sustainable development and if there is a match between socio-ecological problems and consumer needs and wants, what kind of strategic implications does that have? If sustainable product innovations like passive houses, organic food, fair trade products, and hybrid cars are developed, what is the winning positioning strategy? Who are the main target groups of sustainability innovations? What is the unique sustainable proposition (USP)? When is the right moment in time to enter the market with sustainable products? By definition, sustainable products make a contribution to the solution of socio-ecological problems and have some kind of a competitive advantage over other products with respect to the socio-ecological dimension. Generally, there are three possibilities to make use of this unique sustainable proposition (USP) in the positioning of sustainable products (exhibit 7). In the first case, the socio-ecological dimension plays quite an important role in the positioning of sustainable products. The socio-ecological advantage is communicated as the primary benefit, performance and price are secondary. In the second case, the socio-ecological dimension plays a significant, but not a dominant role. It is treated equally to performance and price. In the third case, the socio-ecological dimension is an integral part of quality and performance. It is neither more nor less than a supporting dimension. The sustainable positioning depends on a number of influencing factors such as consumer preferences, competitive offers, and brand assortment. The first positioning may be suitable for small pioneers following a niche strategy and aiming at the socio-ecological active customer group. Since the sustainable niche is rather limited, it is not a viable option for medium-sized or large companies. The second positioning aims at those that can be socio-ecologically activated. If companies manage to combine the socio-ecological dimension with classical buying criteria such as

13

Frank-Martin Belz

taste, freshness, design, durability and so on to motive alliances, this customer group is open for sustainability innovations. In many markets they represent an important, growing segment. The third positioning might be suitable for companies, which aim at the mass market. The social and environmental performance of a product is taken for granted and is not necessarily communicated to the consumer.

Price/Quality

Price

II
Ecology/ Social

Price

III

Ecology Social

Quality

Ecology Social Quality

Exhibit 7: Unique Sustainable Propositions (USP) Source: Meffert/Kirchgeorg 1998, p. 279

In the beginning of the 21st century a number of consumer goods markets are characterized by polarization, i.e. the middle segment erodes, whereas the lower price segment and the upper quality segment gain significance and market shares. Customers either demand lowpriced products with good value or they ask for high quality products and premium brands, which promise a high value added. In this respect, consumer behaviour is not necessarily consistent: The same consumer may buy low-priced food products, while driving a premium car. Or the same consumer may buy food in a discounter store in the morning, while go wining and dining in a gourmet restaurant in the evening. Depending on the product category and situation, the importance of value and price may vary for the consumer. However, more than ever the consumer either demands low-priced products or premium brands. As a consequence the classical market structure changes. In the past, the shape of the market was like an onion, with the middle segment taking most of the market share. In the future, the market will look like a bell with a large price segment and a growing premium segment on top. Such a transformation has already taken place or is about to take place in a number of markets (e.g. cars, furniture and food). The structural market changes will produce winners and losers. For those products and brands, which compete in the middle segment and which do not have a clear positioning in the perception of the consumer, it will be difficult to survive in the market. Products and brands which are clearly positioned in the upper or lower segment offering a unique selling proposition in the consumer perception,

14

Sustainability Marketing

are likely to thrive. Each segment can be divided into a number of sub-segments and niches. Take for example, the quality segment in the food market: Here functional food, convenience products, regional specialities, organic and fair trade food products compete with each other. There are also hybrid products like organic, ready-made meals, which successfully merge contradictory trends and demands like convenience and naturalness. What kind of consequence does the market polarisation have for positioning of sustainable products? An obvious opportunity is to position socio-ecological innovations in the quality segment and follow a niche strategy. Take for example, organic and natural reform stores, which put a lot of emphasis on socio-ecological aspects targeting at the socio-ecological active customer group. Large organic retail chains like Whole Foods Markets in the USA and Basic in Germany try to appeal to a broader customer group. Their stores are located in urban areas and offer a wide assortment of organic and natural food products. They appeal to socio-ecological active as well as to those that can be activated. The two retail chains grow in stagnant food markets, which are characterised by fierce price competition and substitution competition. Nevertheless, they just represent a segment of the whole market. The positioning in niches or sub-segments may be attractive for smaller pioneering companies. It is hardly applicable to medium-sized or large companies. However, multi-segmentmarketing with a clear multi-brand-concept may be a viable option for them. Take for example Migros, the largest food retailer in Switzerland, which offers two different retail brands: M-Bio is positioned in the premium segment and fulfils the high quality standards of controlled, certified organic farming. M-Budget is clearly positioned in the price segment, fulfilling the social-ecological minimum standards, which are set by Migros and go beyond legal requirements. Another example is Frosta, a leading producer of frozen food in Europe. In the German market Frosta offers frozen food according to the Frosta purity standard, i.e. no conservatives and additives at all. Frosta fish food is labelled with the Marine Stewardship Council (MSC) and comes from sustainable fishing. Some Frosta vegetable products stem from organic farming and are labelled accordingly (Naturland). Frosta brands products are positioned in the quality segment. They combine health, ecology and social aspects with classical buying criteria like quality, freshness and convenience to motive alliances. Besides, Frosta produces retail brands for key accounts to make use of the production capacity and take part in the volume market. For non governmental organisations (NGOs) it is important to attach importance to the quality as well as to the price segment to upgrade socio-ecological product standards. Due to the public pressure, the Swedish furniture retailer IKEA was made to pay attention to sustainability issues in purchasing and pre-production (IKEA 2004). Similarly, the Swedish textile retailer H&M assumes social and ecological responsibility along the whole textile chain

15

Frank-Martin Belz

(H&M 2004). Both companies are positioned in the price segment and aim at price-sensitive consumers. These are the socio-ecological passives, which are hardly willing to pay a higher price for socio-ecological benefits. By means of the public pressure the customers of IKEA and H&M get a socio-ecological value for free. From the point of view of the companies under scrutiny, the main aim is not so much socio-ecological differentiation, but rather keeping brand image and corporate reputation. Besides positioning, the question of timing is important: When is the right moment to introduce sustainable innovations to the market? Is it worth entering the market at an early stage and leading the market? Or is it better to wait and follow at a later stage depending on the growth and market development? If companies enter the market at an early stage and the technological innovations are not perfected yet or the consumers are not sensitive to the sustainability issues at hand, the main challenges consist in continuous product improvements and consumer education (= primary market entry barriers). If companies enter at a later stage and the leading company has already established the reputation of a socioecological pioneer and gained significant market shares, the main challenge is rather about fighting the competitor, not so much about informing the consumer (= secondary market entry barriers). Exhibit 8 shows the two different kinds of market entry barriers, which indicate the optimal moment of time to enter the market.

Market entry barriers Primary consumer related market entry barriers Secondary competitor related market entry barriers

Year

Exhibit 8: Market Entry Barriers and Optimal Timing

A good example for an early entry and a successful pioneer strategy is Toyota and its hybrid car Prius, which literally means to go before. The Toyota Prius combines an electric motor with a gas engine to deliver 114 horsepower. The electric motor starts the car and oper-

16

Sustainability Marketing

ates at low speed. At higher speed the Prius automatically switches to the gasoline engine. Under normal driving conditions, the hybrid emits 104 CO2 and runs at 4.3 litre per 100 kilometres. The car looks stylish and comfortably seats five. It is available all over the world. In 2005 the hybrid was awarded the car of the year prize in Europe. The car has a very positive image and sells well. For Toyota, it is the basis for a system of hybrids from compact mini-cars to luxury sedan, sport-utility vehicles and even commercial trucks. As a consequence Toyota leads a wave of hybrids (Kotler/Armstrong 2004, p. 137-139). Will Toyota gain first-mover advantages? Or will the German and American carmakers successfully introduce hybrids too, and overcome secondary market entry barriers?

3.5

Instrumental Aspects

To implement the sustainability marketing strategies, a comprehensive marketing mix has to be developed. In the heart of sustainability marketing are sustainable products, that reduce the environmental burden, consider social aspects, and satisfy customer needs better than competing offers do. Sustainable products are defined as products that have a higher socioecological efficiency than other products in the same category. By definition, sustainable products are not absolute, but relative measures in dependence on the status of knowledge, latest technologies and societal aspirations, which change over time. A product, that meets the highest social and environmental standards today, may be considered normal or even outdated tomorrow. Three-litre-cars which are highly energy-efficient, but still run on gasoline may be substituted by hybrid or fuel cells cars in the near future. To analyse the socioecological problems systematically, the whole life cycle of the product from cradle to grave has to be taken into account. The stages of the socio-ecological product life cycle include: extraction of raw materials, transportation, production of pre-products, production of final products, distribution, use, re-use, disposal, and recycling (Welford 1995, p. 99). The idea of the product life cycle from cradle to cradle goes even further and is oriented towards a circular economy. The re-use and re-cycling are integrated into the design and marketing of products. Closing the loop will become more important in product categories like houses, automobiles, and electric appliances not just due legal requirements. The economic growth in Asia, especially in China and India, will lead to a higher demand for raw materials and energy world-wide, resulting in rising prices in the upcoming years. Thus, there are more economic incentives for ecological behaviour. In addition to closing the loop, the use of renewable resources and energy plays an important role. Good examples are sustainable forests, which are labelled by the Forest Stewardship Council (FSC). The wood from sustainable forests is the basic input for products like paper packaging, cartons, wooden houses and furniture.

17

Frank-Martin Belz

Empirical studies show that the two target groups of socio-ecological active and those that can be activated are willing to pay a (slightly) higher price for sustainable products. However, it is necessary that the social and ecological claims are credible and deliver a perceived value added for the consumer. The higher price for sustainable products is justified by higher production costs. However, it may be time to rethink pricing of sustainable products (Peattie 1999, p. 61-62). Take, for example, 81Fnf High-Tech and Holzbau in Germany, which offers wooden energy-efficient houses at affordable prices. The company cuts costs by means of a functional design, the use of wooden elements industrially produced and the close cooperation with handicraftsmen. The costs savings are passed on to the customer, resulting in prices for the sustainable houses comparable to common houses. The price strategy of 81Fnf High-Tech and Holzbau is to offer more for the same. According to information economics, there are three different kinds of product qualities: search, experience, and credence qualities (Darby/Karni 1973). Search qualities can be inspected by the customer prior to the purchase of a product (e.g. colour and price of a shirt). Experience qualities can be experienced by the customer after the purchase of the product (e.g. colour and fit of the shirt after washing). In contrast, credence qualities cannot be inspected or experienced by the customer neither before nor after the purchase of the product (e.g. no child labour in the production of the shirt). In this case the customer has to trust the information given by the company or a third party organisation. Not always, but often social and ecological qualities are credence qualities (e.g. organic farming or payments of fair wages). That is why credibility, reputation and trust play quite an important role in the communication of sustainable products. An effective way of informing consumers and building confidence is the use of sustainability labels. Unlike brands, which are owned and managed by companies, labels are awarded by independent third parties, i.e. governmental bodies or non governmental organisations (NGOs). If labels are well-known and the socioecological claims credible, they help convincing sceptical consumers and overcoming buying barriers. Two examples of sustainability labels are the Marine Stewardship Council (MSC) and the Forest Stewardship Council (FSC). A difficult task for marketers of sustainable productions is to establish the right balance between information and animation. If there is too much information, hardly anybody will listen; if there is too much animation, the socioecological message might not be credible. A way out of this predicament is a kind of infotainment, using emotionalising pictures besides text in advertisement to evoke positive emotions in the audience. Yet another possibility is to differentiate between mass communication and public relations, as practiced by DaimlerChrysler: In the case of the smart, the ecological aspects are hardly touched upon in advertisements, whereas in public relations they play an important role. The main message in mass media refers to the product benefits and the smart lifestyle.

18

Sustainability Marketing

A high degree of distribution is essential to market sustainable products successfully beyond niches. The vast majority of potential customers is not willing to accept higher purchasing costs in the form of time and money. Bio Suisse, the marketing association of organic food products in Switzerland, pursues a multi-channel distribution strategy. Until 1992 organic food products were sold directly at the farm, at the weekly markets or in alternative stores, imposing high costs on the consumer. In the meanwhile organic food products are distributed on a national level by large retail chains like Migros and Coop, are available in restaurants and can also be ordered on the internet. Another new form of distribution is sustainability centres, which offer sustainable products and services at the same place in the same area (e.g. organic food products, natural products, healthy products, repair services, and car sharing).

3.6

Transformational Aspects

The sixth and last step is one of the specifics of sustainability marketing. It is about the commitment of companies to sustainable development and their active participation in public and political processes changing the existing framework in favour of sustainability. Transformational sustainability marketing (Belz 2001, p. 91-99) is suitable for the most advanced companies, i.e. the sustainability pioneers and leaders. The rationale for such efforts is as follows: Within the present institutional framework, the successful marketing of sustainable products is possible, but limited in width and depth. The institutional design fails to set positive incentives for sustainable behaviour. On the contrary, it allows and often even enhances unsustainable behaviour. That is why changes in institutions are necessary to expand the intersection between socio-ecological problems and consumption and to set up the conditions for the successful marketing of sustainable products beyond niches. Sustainability pioneers and leaders can participate in enlightened self-interest changing the public and political institutions and thus enhancing sustainable development. They can help develop the free market system towards a socio-ecological market system on the global level. The more social and political institutions favour sustainable consumption, the easier it is for companies to market sustainable products beyond niches. Transformational sustainability marketing is a kind of mega marketing, which consists of 6 Ps: Besides product, price, promotion, and place, there are public and politics (Kotler 1986). Exhibit 9 shows two levels of integrative sustainability marketing: Strategic and instrumental sustainability marketing takes place within the present institutional framework, whereas transformational sustainability marketing intents to change the institutional framework itself (Belz 2001).

19

Frank-Martin Belz

The idea of integrative sustainability marketing is based on the concept of integrative business ethics (Ulrich 1998). The objectives of transformational sustainability marketing are to make institutional changes that either set positive incentives for the purchase and use of sustainable products, or set negative incentives for the purchase and use of conventional products.

Transformational Sustainability Marketing SocioEcological Problems Customers Needs and Wants

Strategic/ Instrumental Sustainability Marketing

Exhibit 9: Integrative Sustainability Marketing Source: Belz 2001, p. 92

Examples of transformational sustainability marketing are: public support of companies for an ecological tax reform; voluntary agreements of socio-ecological industry standards; development of sustainability labels in co-operation with non governmental organisations (NGOs). Unlike brands, sustainability labels are awarded by independent third parties. Sustainability labels create transparency in the market and communicate customers a socioecological value added. The largest Swiss retailer Migros is engaged in international stakeholder dialogues to set up compulsory standards and label criteria for sustainable palm oil, which is used in a number of food products such as margarine, croissants, and puff-taste. However, transformational sustainability marketing is not restricted to large companies, which operate internationally. It is also applicable for small- and medium-sized companies, which operate on local or national levels. Take, for example, Neumarkter Lammsbru and Riedenburger, two Bavarian breweries: They consider regionalism the best way to meet the triple bottom line of ecological, economic and social goals (Belz/Pobisch 2005, p. 15). They believe and invest in organic farming and regional supply. Consequently, both of them are engaged in Local Agenda 21 processes. Neumarkter Lammsbru participates in the Local Agenda 21 of Neumarkt by working on a city model that strives towards sustainable development. Riedenburger organised a regional day in co-operation with the Association for

20

Sustainability Marketing

Valuable Ecological Areas, in order to increase awareness for the region and the quality of regional food. Both breweries are also members of the association of organic food producers (AOEL), which aims at promoting sustainability in politics and public. The business association seeks to enhance environmental and consumer protection, raise the consciousness for high quality food, expand product declarations and further develop norms for ecological food products. In the end, it is important to note, that transformational sustainability marketing is not simply another form of lobbying enforcing corporate and business interests. As said in the beginning, it is about the true commitment of companies to sustainable development and their active participation in public and political processes. It is a discourse with stakeholders to realize institutional frameworks for a market system that is stable, fair, and just, serving the vital purposes of human beings and good life (Ulrich/Maak 1997, p. 33-35).

3.7

Specifics

What is special about the conception of sustainability marketing? To what extent does sustainability marketing differ from conventional marketing approaches? There are at least six specifics of sustainability marketing: 1. Ecological and social problems: In conventional marketing literature, the ecological and social problems of products along the whole life cycle are hardly considered. Therefore, the analysis remains on a rather superficial level. Usually, the situation of the natural environment is briefly analysed as part of the macro environment of the company. The shortages of raw materials and increased pollution are mentioned without any further consequences for the conception of marketing (Kotler/Armstrong 2004, p. 123-124; Peattie 1999, p. 63). In contrast, the analysis and identification of ecological and social problems are points of departure in sustainability marketing. 2. Intersection: The identification of the intersection between socio-ecological problems and consumer behaviour is crucial for sustainability marketing. Social activists with big hearts put a strong emphasis on the solution of socio-ecological problems, but widely neglect consumer wants and demand. They follow a kind of anti-marketing or alternative marketing approach. Mainstream marketing mainly focuses on consumer demand overlooking the social and ecological environments. Sustainability marketing tries to find solutions to the socio-ecological problems and at the same time meet customers demand.

21

Frank-Martin Belz

3.

Normative aspects: In conventional marketing, the long-term aim is the building of profitable customer relationships. Traditional marketing goals are increases in sales, profits and market shares. In contrast, sustainability marketing aims at sustainable and profitable relationships with customers, the natural environment and the social environment, thus meeting the triple top line. Besides common marketing goals like sales, market shares and profits, ecological and social objectives are also important. Furthermore, sustainability marketing critically questions underlying assumptions and reflects key concepts of marketing (e.g. needs, wants, and consumer sovereignty).

4.

Information asymmetries: Social and ecological qualities of products are often credence qualities (e.g. organic farming or fair trade products). The customer has to believe the information given by producers or third parties with respect to the social and ecological qualities of products. These kinds of information asymmetries open the door for opportunistic behaviour on the supply side, which may lead to scepticism on the demand side and, finally, to non-purchases and market failure. That is why signalling, credibility and trust are crucial in sustainability marketing.

5.

Transformational aspects: In conventional marketing, the macro environment is often taken for granted. Many companies regard external forces as uncontrollable elements they have to adapt to (Kotler/Armstrong 2004, p. 132). In sustainability marketing, the macro environment is perceived as a constraint to overcome. Within the existing framework, there are few economic incentives to behave in a sustainable way, both for producers and consumers. To change the existing frameworks in favour of sustainability, common efforts of governments, non-governmental organizations and companies are necessary, on local, national and international levels.

6.

Time aspects: Classical marketing is focussed on sales and transactions. It is rather short-term oriented and has a bias towards the present. Modern marketing represents a paradigm shift from transactions towards relations. That is why it is called relationship marketing (Christopher/Payne/Ballantyne 1991). It aims at building lasting customer relationships in order to produce high customer equity. Sustainability marketing goes much further. It aims at building lasting relationships with customers, the social environment and the natural environment. Thus, long-term thinking and futurity are fundamental components of sustainability marketing (Peattie 1999, p. 58).

In the final chapter, the blueprint of a research agenda in sustainability marketing is developed and some open research questions are raised.

22

Sustainability Marketing

Research Agenda

Sustainability marketing is a relatively new and dynamic field of research. As sustainable development evolves and becomes institutionalised in politics, society, and economics, sustainability marketing will also evolve in the future. The proposed conception of sustainability marketing provides a general framework to explore questions of sustainability in relation to marketing. However, sustainability marketing in practice is not general, but contextspecific. Some important influencing factors are: the industry, in which the company competes; the products and services offered by the company; the ecological and social impact of its products and services; the consideration of environmental and social criteria in customer buying behaviour; the convictions of owners and managers of the company; etc. These factors determine the kind and the extent of sustainability marketing. These factors are not mutual, but relate to each other. The industry largely defines the needs and wants to be satisfied, the customers to be served, the products and services to be offered, and the socioecological problems to be faced. Based on the matrix in exhibit 10 there are two avenues of research in sustainability marketing: The first one is contextualisation (vertical arrow) and the second one specialization (horizontal arrow).
Industries satisfying needs

Aspects of Sustainability M. Socio-ecological Problems Consumer Behavior Normative Strategic Instrumental

Housing Living

Eating Drinking

Moving Mobility

...

(1) (2)

Transformational

Exhibit 10: Sustainability Marketing Blueprint of a Research Agenda

The first avenue tries to contextualise sustainability marketing. It explores normative, strategic, instrumental and/or transformational aspects of sustainability marketing in the context of industries, countries and regions. Take, for example, the PhD thesis by Alex Villiger

23

Frank-Martin Belz

(2000): He examines the development of organic food products from the niche towards the mass market in Switzerland. He analyses strategic, instrumental and transformational aspects of sustainability marketing in the case of the major Swiss food retailers Migros and Coop. The main result of his comparative case study is a better understanding of sustainability marketing in niches as opposed to sustainability marketing beyond niches. The second avenue selects one or two specific aspects of sustainability marketing and tries to analyse it in further detail. Instead of analysing several aspects of sustainability marketing in one specific situation, the researcher puts the focus on a certain aspect of sustainability marketing (e.g. Advertisement Between Information and Animation). An excellent example, which falls in this avenue, is the PhD thesis by Andrew Crane (2000), who explores the moral meaning in green marketing. One of the main findings of his study is the process of amoralisation, i.e. the removal of moral meaning from the green marketing process, or from the objects of green marketing. The nature of research in sustainability marketing is not restricted to a certain paradigm. It might be conceptual or empirical research, qualitative and/or quantitative studies. Overall, the research field sustainability marketing is still in a preliminary stage. There are numerous open research areas and questions:

Socio-Ecological Problems and Consumer Behaviour How did the ecological and social problems evolve over time? How are ecological and social problems perceived by media, marketers and consumers? Does market research screen ecological and social problems (systematically)? Do marketers use tools such as Life Cycle Analysis (LCA) in decision making? If so, why and how do they use it? What kind of socio-ecological problems influence consumer demand? Which do not? Why?

Normative Sustainability Marketing Fineman (1997) differentiates three dimensions of morality: conventional morality is the ideal morality espoused by the organization in written documents; private morality relates to the personal moral positions of individuals; and enacted morality is

24

Sustainability Marketing

the accepted moral rules in use. To which extent is sustainability integrated in marketing principles and guidelines (conventional morality)? Are marketers and salespeople concerned with ecological and social issues (private morality)? Do marketers and salespeople consider sustainability issues in their daily business (enacted morality)? To what extent do the three dimensions of morality correspond to each other? Is there a discrepancy between rhetoric and reality in sustainability marketing? Why? And to what extent? Can short-term and long-term goals be resolved in sustainability marketing? How?

Strategic Sustainability Marketing How can innovative product and services be developed, solving social and ecological problems? Which are the drivers for socio-ecological innovations? Why do companies develop social and ecological products? What role do customers play in the development of new socio-ecological products and services? What is the optimal timing for introducing new sustainable products and services (e.g. hybrid cars)? What are the advantages and disadvantages of early market entry strategies (in comparison to follower strategies)? Are there any specifics of sustainability timing strategies? What role do media, public and political agents play in this context? How can socio-ecological products and services be market successfully in niches, market segments, and mass markets? Which are the main target groups of socioecological products and services? What role do social and environmental attributes play in the strategic positioning of products and services?

Instrumental Sustainability Marketing Is it necessary and advantageous to promote social and environmental attributes of products and services? If so, to what extent? Advertising for sustainable products and services faces a dilemma: On the one hand it is supposed to be credible, on the other hand entertaining. How is this dilemma

25

Frank-Martin Belz

solved? What is the right balance between information and animation in sustainability advertisement? What are the specifics of social and ecological sponsoring as opposed to sports and cultural sponsoring? Is socio-/eco-sponsoring just part of Corporate Social Responsibility (CSR) or is it part of an integrated sustainability communication concept?

Transformational Sustainability Marketing Which institutions hinder (foster) successful sustainability marketing? Are companies engaged in transformational sustainability marketing? What kind of companies and why? To what extent do companies manage to change institutions? Which effect do these changes have on the company and its products? Which relevance do pilot projects and co-operations between companies, governmental and non-governmental organizations have for transformational sustainability marketing? Does consumer dialogue help transform demand towards sustainability?

The research questions raised above are not easy to answer. We struggle with these kinds of questions both in theory and practice. Nevertheless, these questions are important to ask and certainly worthwhile studying. Sustainability is one of the main challenges in marketing and will gain great importance in the 21st century. Be invited to join the journey of exciting research, which is theoretically interesting and practically highly relevant.

26

Sustainability Marketing

References

BELZ, FRANK-MARTIN (2001): Integratives ko-Marketing. Erfolgreiche Vermarktung von kologischen Produkten und Leistungen (Integrative Eco-Marketing. Successful Marketing of Ecological Products and Services), Wiesbaden. BELZ, FRANK-MARTIN/POBISCH, JASMIN (2005): Shared Responsibility for Sustainable Consumption? The Case of the German Food Industry, Discussion Paper No. 4, Marketing and Management in the Food Industry, Freising, Mnchen. BUND/MISEREOR (EDS.) (1997): Zukunftsfhiges Deuschland. Ein Beitrag zu einer global nachhaltigen Entwicklung (Sustainable Germany. A Contribution to Sustainable Development), Basel, Boston, Berlin. CHARTER, MARTIN/ POLONSKY, MICHAEL JAY (EDS) (1999): Greener Marketing. A Global Perspective on Green Marketing Practice, Sheffield. CHRISTOPHER, MARTIN/ PAYNE, ADRIAN/ BALLANTYNE, DAVID (1991): Relationship Marketing. Bringing quality, customer service and marketing together. Oxford et al. CODDINGTON, WALTER (1993): Environmental Marketing. Positive Strategies for Reaching the Green Consumer, New York et al. CRANE, ANDREW (2000): Marketing, Morality and the Natural Environment, London and New York. CROOK, CLIVE (2005): A Survey of Corporate Social Responsibility, in: The Economist, January 22, 2005, p. 3-18. DARBI, M.R./KARNI, E. (1973): Free Competition and the Optimal Amount of Fraud, in: Journal of Law and Economics, Vol. 16, 1973, p. 67-88. EHRLICH, P.R./HOLDREN, J.P. (1971): Global Ecology: Readings towards a Rational Strategy for Man, Hartcourt, Australia. ELKINGTON, JOHN (1999): Cannibals with Forks: The Triple Bottom Line of 21st Century Business, Oxford. FINEMAN, S. (1997): Constructing the Green Manager, in: British Journal of Management, vol. 8, no. 1, p. 31-38. GARNDER, GARY/ ASADOURIAN, ERIK/ SARIN, RADHIKA (2004): The State of Consumption Today, in: The Worldwatch Institute (ed.): State of the World 2004, Special Focus: The Consumer Society, New York, London, p. 3-21.

27

Frank-Martin Belz

H&M (2004): Corporate Social Responsibility Report 2003, Stockholm. HARRISON, PAUL/ PEARCE, FRED (2001): AAAS Atlas of Population and Environment, California, USA. IKEA (2004): IKEA social and environmental responsibility 2003. KOTLER, PHILIP (1986): Megamarketing, in: Harvard Business Review, no.3, p. 117-124. KOTLER, PHILIP/ ARMSTRONG, GARY (2004): Principles of Marketing, 10th edition, New Jersey. MEFFERT/KIRCHGEORG (1998): Marktorientiertes Umweltmanagement (Market Oriented Environmental Management), 3rd edition, Stuttgart. OTTMAN, JACQUELYN A. (1998): Green Marketing. Opportunity for Innovation, 2nd edition, Lincolnwood, Illinois. PEATTIE, KEN (1992): Green Marketing, London. PEATTIE, KEN (1995): Environmental Marketing Management. Meeting the Green Challenge, London. PEATTIE, KEN (1999): Rethinking Marketing. Shifting to a Greener Paradigm, in: Charter, Martin/Polonsky, Michael Jay (eds.): Greener Marketing. A Global Perspective on Greening Marketing Practice, Sheffield, p. 57-70. POLONSKY, MICHAEL/ MINTU-WINSATT, ALAM T. (EDS.) (1995): Environmental Marketing. Strategies, Practice, Theory, and Research, New York, London. ULRICH, PETER (1998): Integrative Wirtschaftssethik (Integrative Business Ethics), 2nd edition, Bern, Stuttgart, Wien. ULRICH, PETER/MAAK, THOMAS (1998): Integrative Business Ethics A Critical Approach, in: CEMS Business Review, Vol. 2, p. 27-36. UNITED NATIONS (2003): World Population Prospects. The 2002 Revision, New York 2003. VILLIGER, ALEX (2000): Von der ko-Nische zum kologischen Massenmarkt. Strategien und Perspektiven fr den Lebensmittelsektor (From the Eco-Niche towards the Ecological Mass Market. Strategies and Perspectives for the Food Sector), Wiesbaden. VON WEIZSCKER, ERNST/LOVINS, AMORY M./LOVINS, L. HUNTER (1998): Factor 4, London. WEAVER, PAUL/ SCHMIDT-BLEEK, FRIEDRICH (2000): Factor 10. Manifesto for a Sustainable Planet, Sheffield.

28

Sustainability Marketing

WELFORD, RICHARD (1995): Environmental Strategy and Sustainable Development. The Corporate Challenge in the 21st Century, London, New York. WORLD COMMISSION ON ENVIRONMENT AND DEVELOPMENT (1987): Our Common Future, UN World Commission on Environment and Development, New York.

29

Sustainability Marketing

About the Author

Frank-Martin Belz, born 1966, is Professor for Brewery and Food Industry Management at the Technische Universitt Mnchen (TUM Business School), Academic Director of the Master Consumer Science and leader of the joint research project Sustainable Consumption and Consumer Policy in the 21st Century. He studied Business Administration at the universities of Giessen and Mannheim (Germany), majoring in marketing. In 1995 he received his PhD at the University of St. Gallen (Switzerland). Between 1995 and 2001 Dr. Frank-Martin Belz was senior researcher and lecturer at the University of St. Gallen, participating in various interdisciplinary and international research projects. In 1998 he became executive manager of the oikos Foundation for Economy and Ecology, setting up the oikos virtual campus and the international oikos PhD summer academy. In 2001 Frank-Martin Belz was appointed Professor for Business Administration at the University of St. Gallen. He published a number of works in the areas of corporate environmental management and sustainability marketing, including six books and several papers in Business Strategy and the Environment, Die Betriebswirtschaft, Die Unternehmung, Marketing ZfP, and UmweltWirtschaftsForum. He has also been invited to speak on the topic of sustainability marketing at a range of conferences and seminars in Western Europe, North America, and Asia.

Discussion Papers Marketing and Management in the Food Industry

No. 1

Belz, Frank-Martin (2005): Sustainability Marketing: Blueprint of a Research Agenda, May 2005, ISBN 3-938236-00-0

No. 2

Karstens, Birte (2005): Vom ko- zum Nachhaltigkeits-Marketing: Eine kritische Literaturanalyse, January 2005, ISBN 3-938236-01-9

No. 3

Mller, Susan (2005): Normatives Nachhaltigkeits-Marketing: Motivlage von Unternehmen sozial-kologischer Pionier- und Leadunternehmen der Lebensmittelbranche, January 2005, ISBN 3-938236-02-7

No. 4

Belz, Frank-Martin / Pobisch, Jasmin (2005): Shared Responsibility for Sustainable Consumption? The Case of the German Food Industry, January 2005, ISBN 3-938236-03-5

No. 5

Brndli, Christian (2005): Preisgestaltung von Bioprodukten im Lebensmittelhandel - Ein internationaler Vergleich, February 2005, ISBN 3-938236-04-3

All discussion papers are available as a free download at http://www.food.wi.tum.de In print, they can be ordered for 20 at any bookshop or directly at the Professorship for Brewery and Food Industry Manangement.

____________________________________________________________________
Technische Universitt Mnchen (TUM Business School) Professorship for Brewery and Food Industry Management Alte Akademie 14, D 85354 Freising, Phone +49-8161-71 3279 Fax +49-8161-71 3209 e-mail: jeanette.kralisch@wi.tum.de, http://www.food.wi.tum.de