Marketing developments

Citation

Pitta, D.A. (2010), "Marketing developments", Journal of Consumer Marketing, Vol. 27 No. 3. https://doi.org/10.1108/jcm.2010.07727cab.001

Marketing developments

Article Type: Marketing developments From: Journal of Consumer Marketing, Volume 27, Issue 3

Edited by Dennis A. PittaUniversity of Baltimore

Marketing needs to confront sustainability

Sustainability has become the word company’s use to reference a variety of efforts to achieve some peace with the environment. In the classic dictionary sense, acting sustainably means living in a way today that will not compromise the ability of others (and presumably oneself) to live tomorrow. In practice, this includes such activities as developing “green” products, controlling carbon emissions, preserving scarce resources, and making sure the world’s population can be fed. Applied to the strategic and operational marketing decisions of organizations, sustainability encompasses decisions that range from product development to supply chain configuration.

The problem is that sustainable marketing efforts are often taken defensively, in response to a legal mandate, or meekly, in an effort to do just enough to behave in a socially responsible manner. While neither of these rationales is patently wrong, they tend to sub-optimize results, and they can generate little enthusiasm in the company. They also potentially miss a major opportunity.

Pursuing green business – the role of innovation

The role of innovation in achieving sustainable strategy has been documented (Nidumolu et al. 2009). In numerous industries, new knowledge has been applied to reduce the negative impact of corporate activities on the environment. One example is energy, where reliance on carbon-emitting fossil fuels is begrudgingly giving way to electricity, a cleaner though costly technology. More exotic options, from a variety of biofuels, loom on the horizon (see for example http://www.technologyreview.com/specialreports/specialreport.aspx?id=10). These efforts to generate a sustainable solution are laudable. They are also costly, time consuming and risky.

An important question for management is whether profitable markets exist for sustainable innovation. Will customers pay more for a new product when the primary added benefit is environmental protection, an intangible result that someone else may enjoy? When that question was posed to the Chief Sustainability Officer of a Fortune 100 packaging company, the answer was an emphatic “no way”. Her company, Meadwestvaco Corporation, has found that costs of new materials must remain competitive for margin conscious product managers to show interest in eco-friendly attributes. Whether it is doubt that green products actually work as promised, or inability to transfer the relevance of today’s actions to future years, cost remains the key decision input when making packaging decisions. In most product categories, the general public may perceive value in preserving the ecosystem, but most people are not quite ready to pay for this outcome. A tough economy exacerbates this situation. Facing this dilemma, marketing managers with an eco-minded consciousness may want to add the sustainability attribute, but they also have to keep overall costs stable. But this is not the only alternative. It may be possible to use innovative design to make the overall product more attractive, in addition to achieving sustainable outcomes. This requires a different approach to strategic marketing.

Apple’s successful music player and mobile phone products provide an instructive example. The company develops innovative products to disrupt established markets. In addition to offering extraordinary customer experience, the products achieve iconic status by looking better, feeling better, and being better packaged. These benefits are emphasized through personal interaction, both person-to-person and product-to-person, offered through a transformational retail experience.

Sustainability is not one of the attributes claimed by Apple products, but one gets the feeling that if desired, this property would be creatively worked into the mix, to be embraced by brand loyal buyers. The key take-away is that no single design outcome is the focus of a strategic plan. A number of experiences are sought, and new products are not launched until they can deliver on them. Therein lies a solution for selling sustainability to a market that is not willing to pay for it. Build the green feature into a collection of attributes, making sure added value is provided through the array of benefits.

Sustainability through innovative design

The mindset needed for innovative strategy involving design differs from the resource-based emphasis that characterizes competition-based strategy so popularly taught today. Traditional planning models build core competencies to develop and market offerings where opportunities appear greatest. Research is applied to identify attractive opportunities. Objectives are set and resources then applied where needed to seize and hold competitive advantage.

As suggested by Hartmut Esslinger, founder of the design firm frog, strategies that emphasize rational, measurable solutions will not work in a world that faces a more complex value equation (Esslinger, 2009). Emotional, ambiguous, and expensive solutions will be required. Research is still important, but intuitive understanding of customer behavior is vital. Emphasis shifts to developing insights regarding the role of design in achieving an array of customer experiences. These can include sustainable outcomes, but as one of several sources of product satisfaction. Product development itself must be a collaborative process. Engineers and marketers, who tend to be numbers driven, must join with creative forces to explore visionary solutions to customer problems. Creativity and discipline are the necessary ingredients for successful new products. And finally, commercialization strategies that encompass multiple market responses must be developed and implemented. Innovative solutions require as much internal as external marketing.

Conclusion

These steps require much more detail before they can be successfully used. But it is important to remember that detail should not be confining. The mindset needed for innovative solutions requires openness to novel ideas, shared platforms, and fuzzy outcomes. Flexibility will be a key driver for strategic decision making in a world where consumer outcomes are diffused, not prescribed.