Sustainability as it relates to marketing is an important issue for students (and managers) to wrestle with. The subject of sustainability can get complicated. This video offers a quick and simple overview that might lead to some in-class discussion. I have also posted this at Learn the 4 Ps.
One of the many challenges to selling in developing countries is getting customers to buy products that cost more up-front but save in the long-term. Consider solar power in Kenya. Even a price of $80 for a small portable solar power generator and light bulbs is out of reach for many poor Kenyans used to paying for electricity with monthly bills in smaller increments. Many use kerosene to light their homes — which is more expensive and more taxing on the environment.
Now a company called eight19 has a new business model that is bringing lower cost solar power into the homes of many of Kenya’s poor. They use a system where consumers pay a $10 deposit for a portable solar power unit, two LED bulbs, and an adapter to charge cell phones. Consumers then buy scratch cards which allow them to use the unit – paying for energy as they go, but also paying off the unit over time. After 18 months they own it, and they can continue to receive electricity for free or they could buy another unit and add more power. See also “Starting from scratch” (The Economist, January 24, 2012).
Unilever has produced some memorable campaigns – it is behind the Dove Campaign for Real Beauty and those wild Axe ads.
Now Unilever’s using its marketing expertise to change behavior in the developing world — hopefully making its growth more sustainable. For example, it has had to get creative to promote hand-washing in many parts of the world (see poster used in Indonesia). Unilever’s Sustainable Living Plan aims to cut its products environmental impact in half while doubling sales. You can read an interview with the Unilever CEO and better understand how its creative priorities have changed as it tries to change consumer behavior in many ways – see “Unilever CEO Paul Polman On The Packaged Goods Giant’s Creative Shift” (Fast Company, Co.Create, January 12, 2012).
Big company PR or truly a new way of doing business? I am really hoping for the latter. Unilever and Coca Cola are talking the talk — let’s hope they keep walking the talk. We recently had Coca Cola CEO Muhtar Kent on our campus and I really believe the company is committed to sustainability, see “Coke CEO: Sustainability is world’s most critical issue,” (Coloradoan, November 17, 2011). Unilever makes similar claims in “Unilever’s CMO: ‘We need to walk ahead of our consumers’” (Bizcommunity.com, December 1, 2011) — see Unilever’s Sustainable Living Plan here.
Our students continue to be interested in sustainability and want to know how companies are doing in this regard. These articles suggest some efforts by some of our largest firms to recognize a triple bottom line: profits, people, and planet. You might want to share some of these with your students.
It sure sounded like a great idea. The idea, draw attention to global warming and the plight of polar bears. The bears have been a Coca Cola holiday symbol for almost 100 years — so the actions also fit with the brand’s heritage. Coke did this by changing the iconic red cans to white for the holidays. It sure sounded like a good idea. Unfortunately, the new cans confused consumers — especially Diet Coke drinkers who confused the white can with their familiar silver Diet Coke cans. This article, “Bad News, Bears: Coke Pulls Back on White Cans in Holiday Campaign to Save Polar Bears” (brandchannel, December 1, 2011) describes many interesting elements to the story. For example, by monitoring social media, Coca Cola marketing managers heard complaints early. This case is also a demonstration of a low involvement product that consumers buy out of habit. In the end, it probably marks a mis-step by the soft drink giant. But I would say, if you take chance, you will make mistakes sometimes. And this whole outcome, like the New Coke introduction 25 years ago, may yet generate positive publicity for the brand. Also posted at Learn the 4 Ps.
This article has examples that can be used in teaching consumer behavior, market research, brand management, packaging, and advertising & promotion.
Sanitation is a huge problem in many emerging markets. The World Health Organization estimates that 37% of the world’s 7 billion people do not have access to hygienic toilets. Entrepreneur David Auerbach smelled an opportunity (literally as the inspiration came from a particularly nasty bathroom in China). Auerbach’s new company Sanergy, is using a franchise model as it starts out in Kenya. Local entrepreneurs pay $500 for a Sanergy toilet (often using local microlenders). They charge $.05 per use, and the toilets are emptied daily, with the waste brought to fertilizer plants. Read more at “Cleaning Up: David Auerbach’s Sanergy” (Bloomberg Businessweek, October 13, 2011)
This provides examples of entrepreneurship, franchising, sustainability, and international (developing) markets.
Food distributor Sysco touches all of our lives. We have an extended example about Sysco in the latest editions of Basic Marketing and Essentials of Marketing. Sysco is a progressive distributor and you can read about how Sysco addressed a surprisingly difficult challenge from Michigan State University’s food services. MSU wanted more local produce — supporting local farmers and theoretically helping the environment. This short article “Sysco’s Produce Division Makes Room For Local Farmers” (Fast Company, October 19, 2011) includes a graphic that you might be able to squeeze onto a PowerPoint if you want to show a very current example when you teach channels of distribution.
Over at his Effective Marketer blog, Daniel Kuperman offers a nice summary overview of “Unleashing the Power of Marketing” (an HBR article from last October). His post, titled “Reinventing Marketing at GE” (July 7, 2011) provides a nice case study example that could be used at one of a couple different areas in the introductory marketing course — with strategy planning, business marketing, or implementation. In chapter 3 in both Basic Marketing and Essentials of Marketing we use the GE ecomagination campaign as an extended example of sustainability. I also posted this at Learn the 4 Ps – as Daniel neatly summarizes key marketing roles, some of which our students need to recognize and master to be successful in the long-run.
A growing concern for global warming and our environment began about four years ago and fueled the growth of brands like Method and Clorox’s Green Works. Then – bam! — the economy tanked. Now consumers have a decision — do they pay a bit more for a greener product? It appears that the economy is winning out. Sales for “green” products have slowed or declined in the last couple of years. Read more in “As Consumers Cut Spending, ‘Green’ Products Lose Allure” (New York Times, April 21, 2011).
It might be interesting to ask students how the economy has affected their purchases. Do they think that these products will pick up in sales after the economy gets back on track?
This video features two of our favorite companies — Zappos and UPS. It features an interview with UPS Senior V.P. Bob Stoffel who discusses how the company works with Zappos to better serve Zappos customers. It describes a couple of good examples about how UPS adds new sources of value as a full-service logistics supplier. For other clips from the interview click here — other clips consider global trade and sustainability. You can also read an interview in this article – “Bob Stoffel’s UPS green dream,” (Fortune, December 16, 2010).
At 3:36, the video is relatively short, and while it only features talking heads, I think it might work well early in a class on logistics customer service (we have a logistics chapter in our books) or supply chain management. Warning, you have to put up with a 30 second commercial before the video starts.
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