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SUSTAINABILITY MARKETING
Ken Peattie.
1. Introduction
Within any consumer society most of what we consume will have been marketed to us. Not just the goods and services that we associate with the notion of ‘ consumption ’, but also the public services we use, the charities we patronize, the politicians we vote for, the places we visit and even the institutions and ideas that we think of as part of our society. There will be exceptions to this, such as when people grow their own food, make their own furniture or entertainment, or generate their own energy. In poorer countries consumption on a self- sufficiency and barter basis outside the formal economy may be the norm for many citizens. Within consumer economies however our consumption is facilitated and influenced by marketing thinking, processes and practices, and for that reason marketing sometimes takes the blame for the unsustainable nature of our consumption (Kjellberg 2008). Despite this, marketing can play a pivotal role in developing more sustainable systems of production and consumption within our societies in future (Belz and Peattie 2012).
The term ‘ Marketing ’ can refer to an academic discipline, a business process, an organizational function or division or a management philosophy. The focus of all of these is the customer. In business-to-business or organizational marketing, customers will be companies or public sector organizations. Such marketing is still relevant to the sustainability of consumer lifestyles, since marketing practices within industry supply chains will strongly influence the sustainability of consumer goods (see Sharma et al. 2010). However the form of marketing most visible, both in scholarship and in daily life, and which forms the focus of this chapter, is consumer marketing. A growing phenomenon within marketing practice over the last three decades has been the intersection between societal concerns about sustainability, consumer behaviour and the marketing of products and services across a range of key markets (many of which are discussed in Part 5 of this book). This in turn has been reflected in a growing body of research into the influence of marketing processes and practices on elements of consumption such as product choice, price sensitivity, consumer satisfaction and post-purchase consumption behaviours.
2. Marketing and sustainability—An evolving relationship
Marketing has continually evolved throughout history, from the informal marketing practices of pre-industrial artisans through to the sophisticated social media and relationship-based marketing of the 21st^ century. During the first half of the 20th^ century, marketing scholarship evolved from the study of how to efficiently sell and distribute products to consumers, to increasingly sophisticated efforts to research and understand consumers, and to develop products and services to meet their needs. During the 1960s and 1970s what is often referred to as the ‘ modern mainstream marketing ’ emerged based on a ‘ marketing philosophy ’ centring companies’ efforts around the needs and wants of the customer as the means to deliver profits and growth (Bartels 1988). It also emphasized research to understand the customer and the marketing environment, which then allowed for the effective targeting of a customised ‘ mix ’ of marketing variables at specific market segments.
By the late 20th^ century, this conventional mainstream was being challenged on several fronts including its failure to address marketing’s socio-environmental impacts. Another critical school of thought focused on the discipline’s preoccupation with marketing as an economic transaction and on the tangible products provided to consumers. Such critics argued that the field needed to evolve to reflect a service provision mindset, partly due to the increasing dominance of services markets within developed economies. They called for marketing to be reconsidered as a process of building and managing relationships with customers with an emphasis on the intangible dimensions of those relationships and the companies behind them (Vargo and Lusch 2004).
2.1 The marketing-sustainability relationship. The relationship between marketing and socio-environmental sustainability can be categorized into three ‘ ages ’ (Peattie 2001a). It began with ‘ ecological marketing ’ in the 1970s that focused on pressing environmental problems, such as air pollution, depleting oil reserves, and the environmental impact of pesticides (e.g. Henion and Kinnear 1976). It impacted a narrow range of industries and largely focused on technical solutions to resource use, pollution or waste concerns (e.g. the addition of catalytic converters to cars). The 1980s era of ‘ environmental marketing ’ focused on developing products with superior socio-
(Getzner and Grabner-Krauter 2004). A particularly important sub-type is social marketing (Kotler and Lee 2007) which involves non-commercial organizations using commercial marketing techniques to change peoples' behaviours to contribute to social goals linked to health, environmental protection and social equity (discussed further in section 7.5).
2.2.1 Services marketing The largest marketing sub-discipline is services marketing which recognizes the distinctive characteristics of marketing intangible services compared to tangible products. Although sustainability issues are reflected in research for specific services (such as ecotourism or ethical banking), in the generic services literature there is a comparative lack of consideration of sustainability (van der Zwan and Bhamra 2003). This is surprising given that service provision has a key role in the potential transformation to a more sustainable economy through the substitution of resource intensive product elements of companies' offerings with services (van der Zwan and Bhamra 2003). This is most obvious in ‘ use ’ services where instead of owning a product, customers access the benefits of use through rental or leasing arrangements (e.g. car-sharing services versus car ownership and use). A core strategy for the dematerialization and improved sustainability of many markets is through ‘ product-service systems ’ that integrate elements of tangible products and service provision through innovative business models (Tukker 2004). However van der Zwan and Bhamra (2003) note that the success of such business models depends on understanding how consumers perceive behaviours such as renting and leasing as a different form of consumption to purchase and ownership, and on designing strategies to address consumer concerns about issue such as the continuity of service provision.
2.3.2 Macromarketing Like economics, marketing scholarship has a dual focus. Micro-marketing considers the efforts of particular companies to develop attractive and profitable offerings, including more sustainable offerings, for their customers. Macro-marketing seeks to systematically consider the inter-relationship between marketing as a field and society as a whole with an emphasis on the (often unintended) socio-environmental impacts (Hunt 1981). This ‘ big picture ’ view of marketing remains a field of academic interest for a specialist few, whilst the mainstream field has increasingly focused on the technical minutiae of micro-marketing (Wilkie and Moore 2003). In relation to environmental concern, in a review of marketing research between 1971 and 1997, Kilbourne and Beckman (1998) noted that up until 1995 it was
dominated by micro-marketing, managerialist studies, after which more macro-marketing and critical studies emerged (but remained a minority). This chapter will focus on micro- marketing perspectives and the ways in which marketing scholars and practitioners seek to understand and influence consumers and their behaviour.
3. Understanding consumers
Effective marketing depends upon gathering research data on consumers and the influences on their behaviour, and applying analytical approaches to interpret the data in search of insight. It is worth noting that marketing oriented research into sustainable consumption is heavily biased towards purchasing aspects of consumer behaviour. This is unsurprising, since from the marketer’s perspective purchases ultimately remain the yardstick of success or failure. Another aspect of consumer behaviour that features relatively prominently is recycling as a post-purchase behaviour. Other elements of consumption including non- consumption decisions (particularly through product boycotts), product repair and maintenance, product re-sale and the sharing of products all feature in the research literature but comparatively rarely. Recent research has seen attempts to develop more multi- dimensional notions of pro-sustainability consumption behaviours (PSCBs) such as Webb et al.’s (2008) ‘ Socially Responsible Purchase and Disposal Scale ’ encompassing pro- sustainability purchasing choices, recycling and avoidance/reduced use of products due to their environmental impact.
3.1 Marketing research Researching and analysing consumers to understand how to promote PSCBs is an endeavour that marketing scholars and practitioners have engaged in over the past decades. However this research has focused on a narrow range of markets, particularly packaged goods and other relatively low involvement purchases (Prothero et al. 2011). It has also tended to focus on consuming differently in terms of substitutions between product types rather than on consuming less (Mont and Pleyps 2008). There has been some exploration of lifestyles of voluntary simplicity (Bekin et al. 2005) or anti-consumption (Cherrier et al. 2011), but the majority of research focuses on individual purchases rather than a broader understanding of consumption as a process, consumer lifestyles and alternatives to purchasing (including consumption reduction).
22 and for a broader review of segmentation bases see (do Paco and Raposo 2009; Straughan and Roberts 1999).
One type of consumer that may be particularly important to understand is the so-called ‘ early adopter ’. More sustainable consumption behaviours may be achieved through engaging consumers with innovative products and services, encouraging consumers to adopt new types of behaviour, or engaging consumers in new types of business model to deliver benefits to them. Marketing innovative products such as electric vehicles requires early adopters to take a lead that more conservative consumers can later follow, in order for markets to grow beyond small niches (Gärling and Thøgersen 2001). Bhate and Lawler (1997) found that willingness to choose more sustainable product offerings was associated with innovativeness as a personality trait.
3.4 Consistency in sustainable consumer behaviour The focus of behavioural modelling and segmentation studies has been to identify those consumers most likely to respond positively to pro-sustainability marketing offerings, and therefore those consumers who are relatively consistent in their PSCB. Unfortunately perhaps the most common observations about research in the field concern (a) the contradictory results and the lack of consistency about the significance of many of the key bases on which consumers have been segmented (do Paco and Raposo 2009; Kilbourne and Beckmann 1998; Straughan and Roberts 1999), and (b) that the behaviour of particular consumers will vary considerably in different contexts. For example Dolnicar and Grun (2009) found that consumers rarely maintained their ‘ at home ’ PSCBs when on holiday.
The notion that there is a particular group of ‘ green ’ consumers goes against the proposition of Kardash (1976) that all consumers (barring a contrary few) are potentially environmentally-responsible consumers in that, given the choice between two products that are identical in all respects other than their socio-environmental performance, they will choose the more sustainable option. Therefore variations in consumers’ willingness to purchase greener products can partly be understood by their perception of any other differences between sustainable and conventional goods and services. Perceived differences of price, value, convenience, reliability or technical performance will vary across different purchase contexts. Peattie (2001b) proposed two explanatory factors for the success of sustainable market offerings:
(1) The degree of compromise involved which could be a price premium, the need to travel further to make a purchase or accept some reduction in technical performance. Although consumer acceptance of premium prices is one of the most widely researched topics via ‘ willingness-to-pay studies ’ (see 7.4.2.1 and Chapter 30), Bhate and Lawler (1997) found that consumers were more willing to accept price increases than an increase in the effort required to access more sustainable products (2) The degree of confidence consumers have in the significance of the relevant socio- environmental issue, the sustainability benefits of the offering and the contribution that a purchase will make, which equates to the notion of perceived consumer effectiveness (PCE) which has been shown to be a significant influence on their PSCB (Straughan and Roberts 1999)
McDonald et al. (2006) provided an empirical test of a simplified version of these factors by asking consumers to score 40 PSCBs according to the consumer effort required and the perceived difference/contribution they make towards sustainability. This revealed that perceived effort and difference are influential in consumers’ propensity to engage in PSCB, that individuals tended to exhibit relatively consistent patterns in their attribution of effort or worth to a range of PSCBs, and whilst some PSCBs were perceived relatively consistently by consumers (e.g. switching off lights or engaging in kerbside recycling perceived as high worth/low effort), others such as purchasing organic produce, composting or ethical banking were perceived very inconsistently across consumers in terms of effort and worth.
The subject of consistency across PSCBs was also explored by McDonald et al. (2012) as they attempted to understand how consumers reconcile sustainability concerns with their lifestyles. A key group identified in their study were ‘ Exceptors ’, consumers who generally followed-through on their sustainability oriented values within their lifestyle, but would treat certain categories of consumption (such as use of a private car or foreign holidays) as distinct from their other everyday consumption activities as an exception.
3.4.1 Attitude/behaviour gaps An important stream of research concerns the apparent gap between consumers’ pro- sustainability attitudes, values and expressed intentions and their actual behaviours and actions (Pickett-Baker and Ozaki 2008; Prothero et al. 2011). Several explanations are offered for such attitude/behaviour (or value/action) gaps. One is simply that consumers over-
its complexity (see for example Bagozzi et al. 2002), and any model that is testable will be unrealistically simplistic. Consumer behaviour reflects a wide range of consumers' demographic, psychographic, attitudinal and behavioural traits; and also the context in which consumer decision making and behaviour takes place in time, place, social linkages and other situational factors. Finally consumer behaviour will reflect what it is that the consumer is being offered and how they perceive both that offer and the company behind it. Research evidence suggests that consumers will respond positively to CSR initiatives amongst companies that go beyond improvements to individual products and their production systems (Brown and Dacin 1997). Success partly depends on promoting issues that consumers perceive as consistent with the nature of the product and business, since they can respond negatively if they perceive companies to be inappropriately or insincerely appropriating socio-environmental issues for marketing purposes (Sen and Bhattacharya 2001).
4 Influencing consumers—The marketing mix
Once marketers have targeted a market, their strategy is implemented through a ‘ marketing mix ’ of variables. The standard mix model is the ‘ 4Ps ’developed by McCarthy (1960) of Product, Price, Place (referring to distribution) and Promotion. Despite decades of criticism, its memorability and simplicity have allowed it to endure. However, it has been criticized from a sustainability perspective for over-emphasizing product and production issues at the expense of consumers and consumption (Belz and Peattie 2012).
4.1 Offerings to consumers A company’s offering to its consumers can usefully be thought of as a ‘ bundle of benefits ’, or as a solution to a particular want or need. The move towards providing ‘ solutions ’ rather than products is more typical of business-to-business marketing, but it also resonates with both the shift towards a service-based logic in marketing (Vargo and Lusch 2004), and with a move towards product-service systems as a means to create more sustainable consumer markets (Tukker 2004).
Improved socio-environmental performance of an offering can come via specific features (such as low-energy appliances or low emission vehicles), through production or service delivery characteristics (such as recycled paper, organic food or ethical banking), or from additional services or attributes (such as provision for recycling end-of-life product). Many
environmental product attributes such as recyclability or recycled content, low energy or low emission performance, or a reduction in ecologically sensitive ingredients requires their specification through a design-for-environment process (Chen 2001). Some sectors are using processes of ‘ co-design ’ to work collaboratively with consumers in search of environmental improvements and innovation (Lebel and Lorek 2008). Heiskanen and Lovio (2010), in a study of the low-energy housing market in Finland, found that close cooperation between builders and prospective purchasers led both to design innovations and improvement in householders’ use of energy saving features.
Whether or not perceived sustainability performance impacts consumer perceptions of technical quality is a subject of some controversy. Research from Landor Associates (2007, quoted in Connelly et al. 2011) shows that consumers associate improved socio- environmental performance with an increase in technical product quality, whilst other research suggests that consumers may draw negative inferences about the technical performance of more sustainable products (Luchs et al. 2010).
4.2 Cost/price issues Whether or not consumers are willing to pay a premium for more sustainable products has been a core research topic, particularly through ‘ willingness-to-pay ’ studies in markets such as green energy and organic food (see for example Laroche et al. 2001). Since the influence of pricing on sustainable consumption behaviour is central to Chapter 15, this field of research will not be explored further here. However, two points are worth making. The first is that such studies perpetuate a view of sustainable products as luxuries that command a premium price, and of their conventional competitors as ‘ normally ’ priced. In many cases more sustainable product prices reflect the internalization of socio-environmental costs that conventional competitors treat as externalities and leave unmet. Unfortunately research is rarely phrased in terms of whether or not consumers view as acceptable conventional products with unrealistically low prices because they are subsidized by environmental destruction and human suffering (Belz and Peattie 2012).
The second point worth noting is that the transformation of markets towards more sustainable systems of consumption and production may make conventional notions of price less applicable as we move away from business models based on the sale of products towards more product-service systems. In such cases price becomes less meaningful than the
linked to the style of appeal and ‘ depth ’ of green-ness presented. Other research has sought to understand such advertising's influence on consumers, but has tended to produce contradictory results (Leonidou et al. 2011). There is also direct mail advertising, although its associations with generating waste as indicated by the term ‘ junk mail ’, make it a challenging medium to use for sustainable consumption based messages (Belz and Peattie 2012).
4.4.2 Sales promotion Sales promotion covers a range of techniques that seek to elicit a response from consumers (usually a sale, but also possibly a product trial or the gathering of information) through the offer of additional benefits as a ‘ special offer ’. Vouchers, coupons, contests, free gifts, samples, multi-buy offers, cash-back offers, loyalty schemes and consumer clubs are just some of the promotions used by companies. Their role in stimulating sales, and in the case of ‘ buy-one-get-one-free ’ type offers, potentially encouraging over-consumption, has led to criticism of promotions as marketing tools. Despite the prevalence of sales promotion offers in the retailing of packaged foods in particular, there is surprisingly little research exploring their role and effectiveness in influencing consumer behaviour in relation to sustainability. In one study Thøgersen (2009) found that the use of a promotional one month travel card did significantly increase consumers’ willingness to commute by public transport. Behavioural change was even to an extent evident several months after the promotional offer ended, which is in line with broader findings about short-term promotions’ ability to break habits and change longer-term behaviours.
4.4.3 Selling Personal selling is more usually associated with industrial than consumer marketing. However there are consumer markets including cosmetics, cars, new homes and high technology goods in which selling plays a key role, and these include some of the most significant contributors to consumers’ ecological impacts (Belz and Peattie 2012). Despite the important role that sales staff could play in the sustainability marketing communications process, the research literature relating to this is very limited and skewed towards industrial markets.
4.4.4 Public relations, sponsorship and events Products may be promoted through a range of activities under the umbrella terms of public relations including press releases, product launch events, celebrity endorsements, sponsorship
activities and ‘ experiential ’ marketing. The most comprehensively researched amongst these media is public relations where there is a significant overlap with corporate brand communications and CSR strategies (Gregory 2007). Research in relation to these media tends to focus on individual cases and rarely with a direct link to their influence on consumer behaviour.
4.4.5 Point-of-sale In-store communication provides opportunities for retailers and manufacturers to engage with consumers on sustainability issues during the shopping and purchasing process, and at a moment that many purchase decisions are made. In a comparison of in-store communications practices amongst leading UK grocers, Jones et al. (2011) found that most such communication was about promoting, rather than restraining, consumption. Sustainability communications tended to be insignificant compared to communications about value and special offers. With the exception of Marks and Spencer's ‘ Plan A ’ communications materials that were thematically linked, most in-store communication addressed sustainability issues in a piecemeal way including topics such as FairTrade, local sourcing, use of re-usable shopping bags, sustainably sourced fish and recycled packaging.
4.5 Interactive marketing Online and mobile phone based communication has been a key growth area in marketing communications in recent years. Leonidou et al. (2011) noted that a common means to connect companies' print advertisements to their environmental agenda was through a reference to online environmental resources (either a specific environmental website or an environmental section of the conventional site). The benefits of communicating online with consumers about sustainability are considerable. Online resources can provide as much depth and detail on product ingredients, production methods and supply chain impacts as the consumer wants. The interactive nature of online communication allows companies to create a dialogue about sustainability improvements, allowing any expressed consumer concerns or scepticism to be tackled directly. Online media also allow consumers to self-select the sustainability issues that most concern to them, allowing companies to develop more customized communication than conventional mass-media campaigns providing blanket messages (Minton et al. 2012).
independent certification of product claims that reflect a full life-cycle analysis of the product’s socio-environmental performance.
4.8 Greenwashing Another stream of research concerns ‘ greenwashing ’ and the ways in which environmentally oriented product claims and other marketing communications vary between those that are factually accurate and acceptable, and those that are flawed due to omissions, ambiguity or claims that are untrue/misleading (Kangun et al. 1991). Research into greenwashing has generally focused on understanding it as a marketing practice rather than on its impact on consumer perceptions and behaviour. However studies like that of Chen and Change (2013) have shown that greenwashing reduces consumers’ trust and increases their uncertainty and perceived risks.
5 Social marketing
Social marketing reflects the use of commercial marketing techniques by governments and public sector bodies to promote behavioural change in the pursuit of social goals. Although the majority of applications and research studies concern health behaviours, since being established as a field in the early 1970s, social marketing has been applied to an increasingly wide range of behaviours linked also to injury/accident prevention, community involvement and environmental protection (Kotler and Lee 2007). Although social marketing campaigns typically target people with behavioural change interventions in their role as citizens, there can be a significant overlap with their role as consumers. Health campaigns promoting dietary improvement, promoting cycling and walking behaviours over driving, or promoting responsible alcohol consumption all focus on important aspects of consumption. Environmental social marketing campaigns tend to focus on energy, water and waste reduction, and the promotion of PSCBs such as recycling, car sharing, safe pesticide use, and the consumption of local and seasonal produce (Peattie and Peattie 2011).
Community-Based Social Marketing addresses the behaviour of citizens at a collective community level (McKenzie-Mohr 2000), recognizing that many elements of consumption (such as energy, transport, recycling and food purchasing) are largely dependent on the provisioning systems within a community and the choices they offer to consumers. Individually, consumers may face very restricted choices in terms of being able to accept or
reject what is offered. At its simplest level, consumers cannot car share on their own. Collectively communities can make sustainable consumption behaviours more feasible, more impactful and can widen the choices available to consumers through the development of community food, energy, transport or waste schemes (Carrigan et al. 2011). A combination of community-based social marketing campaigns to motivate consumers, and sustainable community enterprises aiming to develop and market sustainable goods and services on a community basis may represent one of the most promising pathways towards substantively more sustainable consumption. It will however take marketing practice and research away from the familiar territory of international scale systems of production and consumption and supply chains that have come to dominate the research agenda in recent decades.
6 Future research agenda
Chabowski et al. (2011), conducted a bibliometric evaluation of the structure of scholarship in marketing and sustainability taking in 1,320 sustainability-focused articles in 36 academic marketing and business journals over a 51 year period. On exploring their results, perhaps the most remarkable finding goes unremarked in the paper itself: that for a discipline that prides itself on its customer orientation, consumers and their behaviour are conspicuous only by their relative absence. The majority of studies focus on marketing strategies, organizational cultures, processes and activities, resources, performance measures and profitability, the ethics and conduct of marketers, advertisers, sales staff and other employees, and the relationship between marketing, CSR and corporate citizenship. Of 35 ‘ clusters ’ of marketing and sustainability literature identified in the study, only one explicitly mentions ‘ consumers ’ and that is in relation to their response to CSR strategies rather than specific marketing efforts. Marketing as a field appears fascinated by the impact that sustainability concerns are having upon itself, whilst leaving the consumer's response comparatively under-researched. Given that progress towards more sustainable systems of consumption and production will depend upon consumer responses to the sustainability agenda and to the innovations in products, services and business models that companies introduce, this is both baffling and worrying.
Prothero et al. (2011) and Chabowski et al. (2011) both review the existing literature on marketing and sustainability and seek to identify future research opportunities. Many of their
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