The Dove Campaign for Real Beauty - Pearson

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Chapter 2 Sustainable marketing: marketing ethics and social responsibilitySecondary smoking is another example of a negative externality, but not all externalities arenegative. Where more than one in three people install anti-theft vehicle tracker systems in theircars, a positive externality occurs since the overall car crime rate goes down. Similarly, if morethan one in ten install radar-controlled cruise control systems, the stop-start motor congestionon the roads declines for all drivers.The social cost of goods such as SUVs or their bull bars may appear trivial to a buyer who isignorant of the third-person costs, or because the events that incur the third-person costs, suchas running over and killing a child, are rare.The remoteness of negative externalities can lead to their neglect. In the nineteenth century,many people in England were ignorant of the squalor of working-class life until it was graphicallyillustrated in novels like Charles Dickens’ Oliver Twist. Likewise, the cruelty of slavery wasinvisible to early generations, although not to later ones. In this century, it is not apparent that apair of trainers that you buy was produced in a Third-World sweatshop or that a piece of hardwoodfurniture would involve destroying tribal areas in Borneo or the Amazon basin.As the SUV examples show, marketers can achieve an immediate return from supplying goodswhere a third party pays the cost. Is the strategy sustainable? In the case of SUVs whose safety isillusory, it is akin to selling a dangerous good based on mythical safety claims. This flies in theface of the basic marketing concept. There is also a danger of a consumer backlash. In manycountries SUVs and the perceived anti-social attitudes of their owners have become something ofa joke. In other cases, banning the offending behaviour can wreck once-lucrative markets, as isoccurring with bull bars and smoking in public places. Democratic governments have the abilityto protect their own people from negative externalities, although it often takes pressure groupsto stimulate action.Where negative externalities are borne by distant peoples, the impulse for government actionis diminished. Hence the emergence of campaigners who use all the skills of modern marketingto communicate their concerns – Live Aid and Live Eight, aimed at the G8 summit in Scotland,are global examples. Like Nike in sportswear and B&Q in wood, enlightened marketers also seethe danger of reputation loss such as that which Nike faced or the opportunity to make theirproducts more appealing to concerned customers, as did B&Q by making sure their wood camefrom renewable sources.Many of the earlier concerns of environmentalists were the impact of pollution and otherpractices upon people who live now. Excessive use of private transport was a problem becauseof the environmental pollution and congestion it causes here and now. Global warming, however,implies that the true cost of our love of heating, air-conditioning, flying, power boats, electricalequipment that is instantly available and private motorised transport will be borne by futuregenerations or even during the lifetime of current students.Environmentally harmful consumptionEnvironmentally harmful behaviour is not new. The ancient Greek philosopher Aristotlerecognised that: ‘That which is common to the greatest number has the least care bestowed uponit.’ For a long time this did not matter beyond the local community. Over-fishing may havedestroyed the cod banks off North America’s coast, London was smothered in its Dickensiansmog, the Easter Islanders destroyed their lush tropical island, and the colonists of Greenlandovergrazed their land, making its name seem oddly inappropriate, but elsewhere in the world itdid not matter. These are all cases of The Tragedy of the Commons, a term derived originallyfrom a parable published by William Forster Lloyd in 1833. 49 Over-exploitation occurs becauseconsumption benefits individuals who are motivated to maximise their own use of the resource,while the costs of exploitation are distributed to all.“That which is common to the greatest number has the least care bestowedupon it.“The Tragedy of theCommons—Free access tofinite resource ultimatelydooms the resource byover-exploitation.111
Part 1 Marketing nowFree riders—People whoconsume more than theirfair share of a resource,or shoulder less than afair share of the costs ofits production.The global tragedy of the commons now affects us all because the common good is the wholeenvironment. Industrialisation means that our combined consumption can now destroy the airwe all breathe and the atmosphere that protects us from the sun’s rays. Marketing’s endeavoursthat result in destroying our shared environment by fulfilling the immediate needs and wants ofcustomers are clearly not sustainable. What does sustainable marketing offer?The world’s greatest generators of greenhouse gases are electricity and heat (26 per cent),deforestation (18), agriculture, industry and transport (14 each) and waste (4). In all sectors,some marketers have gained a strategic advantage, embracing the need to look to the needs oftomorrow’s markets. Denmark’s Vistas is growing fast as the world’s leading producer of windturbines but big money is catching up. GE has made ‘green is green’ their mantra. It has set upEcomagination that brings together businesses, like wind turbines, that are intrinsically green,with its other businesses that are more environmentally sound than the competition. GE isgenerally highly successful but its Ecomagination businesses are growing by 12 per cent perannum compared with 9 per cent for GE as a whole. Likewise Bombardier, which makes planesas well as being a global leader in rail technology: the Pendolino trains they make for VirginTrains already consume 76 per cent less fuel than road or local air travel, but Virgin Trains is nowpioneering Europe’s first biodiesel-powered Voyager trains that cut CO 2 by a further 14 per cent.These companies, along with many others, including Alstom and Siemens, are in an increasinglystrong position compared with those whose response to environmental concerns wasdenial. While Alstom, GE, Siemens, Vistas and the like were embracing sustainable marketing, theGlobal Climate Coalition (GCC) of big carbon emitters aimed to ‘shoot the messengers’, castingdoubt on the science of global warning and greenhouse gas reductions. After GCC collapsed,the Competitive Enterprise Institute championed denial, running an ad proclaiming: ‘Carbondioxide: they call it pollution, we call it life.’ Even Exxon has now broken from this alignment ofdoubters. 50These differing responses to sustainable marketing cut across industries. As a result, in theautomotive industry Toyota, Nissan, PSA Peugeot Citroën and Renault are well positioned for afuture cleaner-energy low-cost exposure to the changing market and strengths in low-carbontechnologies. In contrast, BMW, Ford and GM, with their dependence on SUV and sporty cars,are highly exposed. As GM’s vice-president of R&D now recognises: ‘This industry is 98 per centdependent on petroleum. GM has concluded that that’s not sustainable.’ 51Indications are that marketers cannot rely on the behaviour of today’s consumers to providethe market signals to shift to sustainable marketing. A few people are committed to ethicalconsumption and many enjoy the warm glow of doing good when they buy, but consumers areconfused and there is little sign that they will buy ethical products that cost more or performless well than the norm. It is a free-rider problem: most wealthy consumers are enjoying beingfree riders where their immediate descendents and the world’s poor pay. 52“Consumers are enjoying being free riders where their immediate descendentsand the world’s poor pay.Today’s free-riding consumers are benefiting from an externality that has a time dimension.The people who will pay are not born yet, so why bother? Environmentally damaging goodscarry with them a double incentive not to act now. Besides, the negative externality is tomorrow’sproblem, so we can free-ride. If everyone else constrains their lifestyle or invests to cut back theirenvironmental impact, we can benefit from a better environment without contributing anything.But what if we all free-ride? As an example, BA’s customers have the chance to pay just £5 tooffset the carbon emissions of a flight from London to Madrid but fewer than 1 per cent do. Thelink between our actions and the consequences are so remote that someone else can pick up thetab. Even when the economic benefits accrue directly to consumers, few respond.“112
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The Dove Campaign for Real Beauty - Pearson

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