Societal Marketing

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SOCIETAL MARKETING

SOCIETAL MARKETING

1. Societal Marketing
2. Societal Marketing V/s Managerial Marketing
3. Developing a Model of the Impact of Societal Marketing on
Corporate Image
4. Public Policy Towards Marketing

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SOCIETAL MARKETING

Societal Marketing

The societal marketing concept is an enlightened marketing concept that holds that a
company should make good marketing decisions by considering consumers' wants, the
company's requirements, and society's long-term interests. It is closely linked with the
principles of corporate social responsibility and of sustainable development.

The concept has an emphasis on social responsibility and suggests that for a company
to only focus on exchange relationship with customers might not be suitable in order to
sustain long term success. Rather, marketing strategy should deliver value to customers in a
way that maintains or improves both the consumer's and the society's well-being.

Most companies recognize that socially responsible activities improve their image
among customers, stockholders, the financial community, and other relevant publics. Ethical
and socially responsible practices are simply good business, resulting not only in favorable
image, but ultimately in increased sales.

Societal marketing should not be confused with social marketing. The societal
marketing concept was a forerunner of sustainable marketing in integrating issues of social
responsibility into commercial marketing strategies. In contrast to that, social marketing uses
commercial marketing theories, tools and techniques to social issues. Social marketing
applies a “customer orientated” approach and uses the concepts and tools used by
commercial marketers in pursuit of social goals like Anti-Smoking-Campaigns or fund
raising for NGOs.1

This theory emphasizes that organizations should not only think of cut-throat policies to
achieve targets and jump ahead of competitors but should have ethical and environmental
policies and then back them up with action and regulation.

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SOCIETAL MARKETING

It may sound appropriate and ethical, but societal marketing concept is hard to
implement as not all companies have a social conscience. Whether it is legal and essential in
industries like the tobacco and liquor industry needs analysis as they have a tremendous
influence on consumer welfare.

Societal Marketing V/s Managerial Marketing

Many people are critical of some industry practices – saying that they are the sort of
unethical, socially irresponsible marketing behavior that ultimately leads to government
regulation.

Societal marketing is a broadening, but not a replacement of managerial marketing.

In managerial marketing, manager develops a marketing program to plan, price,


promote and distribute products and services to earn profit and satisfy customer’s wants.
While in societal marketing, he develops a same marketing program but he also considers the
societal consequences in the same.

E.g. In case of automobile marketing we consider social aspects of auto production and use
– air pollution, traffic congestion etc. with the planning of marketing mix.2

Marketing executives have a three fold responsibility – to their firm, to their workers
and to their customers. For their firms their job is to provide a satisfactory net profit over the
long-run. For their employees, their responsibility is to provide a good working environment.
For their customers their job is to market want-satisfying goods and services at the lowest
reasonable cost.

Marketing executive should have a high degree of social responsibility simply because
it is morally correct thing to do. While this is simple and beautiful in concept, it is far more
difficult to put into operation.

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SOCIETAL MARKETING

A societal orientation is needed to build the public confidence in business and to justify
the privilege of operating in our economic system. A socially responsible attitude is needed if
business is to retain its social power.

Developing a Model of the Impact of Societal


Marketing on Corporate Image

While some businesses view corporate social responsibility (CSR) as an image


enhancement tool with no tangible benefits, many organizations are increasingly concerned
about managing social issues to benefit stakeholder interests.3 In today’s increasingly
competitive and changing marketplace CSR can become a competitive advantage.4

Specifically, consumers’ perceptions of a firm’s corporate social responsibility have


been shown to influence their attitudes toward a company5; particularly when committing to
a purchase.6 CSR is reflected in practice by businesses adopting a societal marketing focus.
Societal marketing has been shown to have a positive impact on consumer attitudes and
behaviour in various countries. Indeed many companies attribute societal marketing as a
major success factor.7 Societal marketing as a business philosophy can be implemented in
many ways including concern for the environment, employee schemes and involvement in
specific social causes or cause related marketing.

Despite the increasing support for CSR and societal marketing, a scarcity of research
still exists in this field, particularly in relation to corporate image.8 Hence the purpose of this
research is to develop a model of the influence of a societal marketing program on the
attitudes of consumers to corporate image. This model will then be used as the basis for
future empirical testing.

Given the purpose of this research, model development begins by defining corporate
social responsibility and its link to societal marketing before exploring the impact of societal
marketing on corporate image. Next, we define corporate image and outline various models

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SOCIETAL MARKETING

of corporate image formation. On this basis our model of factors influencing consumer
attitude to corporate image is proposed.

Corporate Social Responsibility and Societal Marketing

While there is no widely accepted definition of corporate social responsibility (CSR),


the World Business Council for Sustainable Development (WBCSD) defines CSR as ‘the
commitment of business to contribute to sustainable economic development, working with
employees, their families, the local community and society at large to improve quality of
life.9 Hence, CSR is the voluntary adoption by companies of responsibilities beyond purely
economic or legal responsibilities.10

The societal marketing concept introduces corporate social responsibility (CSR) into
marketing practices. Societal marketing incorporates a focus on the consumer’s and society’s
well-being.11 Research executed in many countries has consistently shown that consumers
express a more positive attitude toward a company that practices societal marketing, and
additionally prefer to purchase the products of these companies However, little research has
considered how and why this relationship between societal marketing and consumer attitudes
occurs, or to uncover the conditions favoring or hindering the development of this
relationship.

Corporate Image

Various definitions of corporate image exist. Corporate image is sometimes seen as


synonymous with corporate reputation12 or as different to corporate reputation but
interrelated.13 Corporate image is the net result of the interaction of a person’s beliefs, ideas,
feelings and impressions about a company and exists in the mind of that person. Corporate
image is the totality of a stake holder’s perceptions of the way an organization presents itself,
either deliberately by controllable sources or accidentally by uncontrollable sources.

The Model
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SOCIETAL MARKETING

Drawing on previous research, a model of the impact of societal marketing on


consumer attitudes toward corporate image is presented in figure 1, based primarily on
models from Cornelissen (2000), Balmer and Gray (2000) and Stuart (1999). This model
proposes that consumers’ attitude towards corporate image is influenced by three key factors:
corporate marketing communications in general, the specific features of the societal
marketing program implemented by the company, and consumer demographics.

Societal Marketing
Program

Program Symbolism
Behavior
Corporate
Marketing Program Demographic
Communication Communications Characters

 Primary
 Gender
Communication
 Age
 Secondary
Communication  Education
Level
 Tertiary
Communication  Income
Level

Consumer’s Attitude
towards
Corporate Image

Figure : A model of the impact of societal marketing on consumer’s attitude towards


corporate image

Source: Cornelissen, J., 2000. Corporate Image: An Audience Centered Model, Corporate Communications: An International
Journal. 5(2), 119-25; Stuart, H., 1998. Exploring the Corporate Identity/Corporate Image Interface: An Empirical Study of
Accounting Firms, Journal of Communication Management. 2(4), 357-71; Balmer, J.M.T. and Gray, E.R., 2000. Corporate
Identity and Corporate Communications: Create a Competitive Advantage, Industrial and Commercial Training. 32 (7), 256-62.

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SOCIETAL MARKETING

Corporate marketing communications relates to the overall communication of the


company to consumers as distinct from communication specifically related to the societal
marketing program. There are three types of corporate marketing communications: primary,
secondary and tertiary. Primary communication refers to communication directly to or with a
consumer or initiated by a consumer including direct interaction with a staff member,
attendance at corporate seminars or events and visiting a company’s website. Secondary
communication is identified as a system for visual identification and formal corporate
communications, for example through advertising, public relations, graphic design and sales
promotion. Typically secondary communication is media interpretation that is
communication through a third party. Several researchers support mass communication.
Tertiary communication refers to word-of-mouth and the dominant role of corporate
marketing communications in corporate image formation.

Hence Proposition 1 is :

Corporate marketing communications will influence consumers’


attitude toward corporate image. 14

The second factor proposed to influence attitude to corporate image is based on the
features of the specific societal marketing program adopted by the company. Three key
components of the societal marketing program are: symbolism, behaviour of management
and employees and finally communications regarding the specific societal marketing
program. Elements of symbolism include visual identity and other tangibles such as logos or
names that specifically idenitfy a particular societal marketing program. Management
behaviour considers the support and value given to the societal marketing program by
management, while employees’ behaviour addresses the quality of service delivered by
employees involved in the societal marketing program. Similarly to general corporate
marketing communications, communication specifically concerned with the societal
marketing program used to communicate the details of the program to the target audiences.

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SOCIETAL MARKETING

Hence Proposition 2 is :

Consumers will have a positive attitude toward a corporation that


implements a societal marketing program.

Finally, demographic factors have also been shown to influence corporate image. Our
model includes the specific demographic variables of gender, educational level, age and
income level. Briefly, females tend to have more positive attitudes toward firms
implementing societal marketing than males.15 Additionally, highly educated and higher
income consumers were shown to be more favorable to companies supporting causes.16
However, the influence of age on attitudes toward firms implementing societal marketing is
still controversial.17 Marital status was shown to have a slight relationship but the scarcity of
research on this demographic factor makes the results inconclusive.

Hence Proposition 3 are :

 Female consumers will have a more positive attitude toward a firm implementing a
societal marketing program than will males.18

 Younger consumers will have a more positive attitude towards a firm implementing a
societal marketing program than will older consumers.

 Consumers with a higher educational level will tend to have a more positive attitude
toward a firm that implements a societal marketing program than will those of lower
educational level.

 Consumers with a higher income will tend to have a more positive attitude toward a
firm that implements a societal marketing program than will those of lower income.

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SOCIETAL MARKETING

Societal Marketing and Process of Building


Corporate Brand Equity

Building corporate brand equity for one’s own is considered as one of the most
important governance responsibilities by most of the Indian companies today. This paper is
an attempt by the authors to identify the factors that drive the process of corporate brand
equity building up via the societal marketing route.

The various perspectives on the development of marketing theory are in reality the
differences in perspective, with some researchers viewing it not simply as a managerial and
economic activity but also as a social process.19

Corporate Societal Marketing

The quintessence of the marketing concept which reached its apotheosis in the early
1960s has been described by Kotler and Keller as a “customer orientation backed by
integrated marketing aimed at generating customer satisfaction as the key to attaining long-
run profitable volume.”20

It was Bell and Emory who first identified its three basic elements as a customer
orientation, an integrated effort, and a profit orientation.21 By the 1970s, however, as it
became clear that society’s resources were finite and its environment damageable, some
authors became critical of the emphasis on material consumption without consideration of
the societal benefit.22

Authors like Kotler and Dawson have implicit faith in the theory that what is good in
the long run for society is good for business. Other aspects of the societal marketing
viewpoint are its emphasis on communication between the business and its environment in

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SOCIETAL MARKETING

the form of feedback mechanisms, consultations and negotiations between competitors,


consumers and government agencies.

Corporate societal marketing can be defined to “encompass marketing initiatives that


have at least one non-economic objective related to social welfare and use the resources of
the company and/or one of its partners”.23

CSM could be used to satisfy multiple objectives. Goals for companies that implement
successful CSM programmes include “create a differential advantage through an enhanced
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corporate image with consumers” and “differentiate themselves from the competition by
building an emotional, even spiritual, bond with consumers”.25 Corporate societal marketing
programmes are poised to play a more important role in creating brand equity.26

The Process of Building Corporate Brand Equity

Brand Equity is a set of brand assets and liabilities linked to the brand’s name and
symbol, which can subtract from as well as add to the value provided by a product or service
and provides value to the customers as well as to the firm.27

Corporate brand equity once established in favor of the firm could be expected to
enhance the efficiency and effectiveness of the firm’s future marketing programmes and
projects. Corporate brand equity will usually provide higher margins for the firm’s product
offers by permitting premium pricing and reducing reliance on promotions. The corporate
brand could also provide a platform for growth by brand extensions and distribution equity.28

Case Study

Manorama, the largest newspaper network (in terms of reach and readership) operating
from Kerala, India earn an unparallel brand equity through build an awareness among the
people who live in both rural and urban areas, regarding the ideal behavior toward the CSM
concepts of public participation for making Kerala, A Clean Kerala and the programme was
given the name ‘Sukrita Keralam’ under which waste disposal, solid waste management,

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recycling of house-hold garbage, use of rain water in house-hold activities, conservation of


natural resources, tree plantation etc. are covered.

The role of Manorama does not end by merely creating awareness; they also provide a
platform for the public to produce various useful byproducts such as biogas, electricity;
compost and vermin compost. Manorama as part of their venture for community
development has also introduced awards up to Rs.10 lakhs for the best panchayat /
municipality/ corporation which implements their programme.

Public Policy Towards Marketing

Marketing executives of the 21st century will face many challenges. They have
abundant marketing opportunities because of technological advances and the new forms of
transportation, recreation, communication and infrastructure. At the same time, forces in the
socioeconomic environment will increase the constraints under which marketing can be
carried out. Those companies that are able to create new values and practice societal
responsible marketing will have a world to conquer.

An enlightened company will make marketing decisions by considering the consumer’s


wants, the company’s requirements, the consumer’s long-run interests and the society’s long-
run interests. The company is aware that neglecting the last two considerations is disservice
to consumers and society.

Alert companies have recognized societal problems as presenting opportunities.


Consumerism actually should be, must be and I hope will be the opportunity of marketing.
This is what we in marketing have been waiting for.29

A societal oriented marketer wants to design not only pleasing but salutary products.

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SOCIETAL MARKETING

Immediate Satisfaction
Low High
High

Long-run Salutary Products Desirable Products


Consumer
Benefits
Deficient
Low Pleasing Products
Products

Figure : Classification of New-Product Opportunity

Current products can be classified according to their degree of immediate consumer


satisfaction and long-run consumer benefit.

 Desirable products combine high immediate satisfaction and high long-run


benefits such as Tasty and nutritious breakfast food.
 Pleasing products give high immediate satisfaction but may hurt consumers in
the long-run such as cigarette.
 Salutary products have low appeal but ate also highly beneficial to consumer in
long-run such as law phosphate detergent.
 Deficient products have neither immediate satisfaction nor salutary qualities
such as bad tasting medicine.

Even the conscientious marketers will face many moral dilemmas. The best thing to
do will often be unclear. Since not all marketing executives have fine moral sensitivity,
companies need to develop corporate marketing policies. Policies are broad fixed guidelines
that everyone in the organization must adhere to and that are not subject to exception.30

Each marketer must work out a philosophy of proper behavior. Every moral system is
predicated on some conception of the good life and the relation of one’s welfare to that of
others. Once the marketer works out a clear philosophy, he can deal with the many knotty
questions posed by marketing and other human activities.

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SOCIETAL MARKETING

Principles for Public Policy Towards Marketing

Future public policy must be guided by a set of principles that will improve the
marketing system’s contribution to the quality of life. Following principles might guide the
formulation of public policy toward marketing.

1. Consumer and Producer Freedom

To the maximum extent possible, marketing decisions should be made by consumers and
producers under relative freedom.

This principle states that a high level of marketing freedom is important if a marketing
system is to deliver a high standard of living. People are able to achieve satisfaction in their
terms rather than in terms defined by others. It is a cornerstone of a dynamic marketing
system.

2. Curbing Potential Harm

The political intervenes in producer or consumer freedom only if serious harm would
occur in the absence of intervention.

The principle of transactional harm is widely recognized as grounds for government


intervention. If the transaction will threaten to harm producer, consumer or public than only
political intervenes will applicable.

3. Meeting Basic Needs

The marketing system should serve disadvantaged consumers as well as affluent


consumers.

In a free enterprise system, producers produce products for markets that are willing and
able to buy. If certain groups lack purchasing power, they may go without essential goods
and services, causing harm to their physical or psychological well-being. Use economic and
political interventions to bring social output closer into line with need priorities such as

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progressive income taxes, the surplus income of the rich are transferred to the poor through
welfare payments and improved social services.

4. Economic Efficiencies

The marketing system strives to supply goods and services efficiently and at low prices.

Every society is characterized by scare resources in relation to the population’s needs


and wants. The extent to which these needs and wants can be satisfied depends upon the
efficiency with which the scare resources are used. Free economies rely on active producer,
fare competition and informed buyers to make a market efficient. The presence of healthy
and active competition and well-informed buyers keeps quality high and price low.

5. Innovation

The marketing system encourages authentic innovation.

An effective marketing system makes an investment in continuous process and product


innovations.

Process innovation seeks to bring down the costs of production and distribution while
product innovation seeks to formulate new products to meet changing consumer needs and
desires

6. Consumer Education and Information

The marketing system invests heavily in consumer education and information to increase
long-run consumer satisfaction and welfare.

The principle of economic efficiency requires public investment in consumer education


and information. Ideally manufactures would provide adequate information about their
products and services.

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7. Consumer Protection

The marketing system must supplement consumer education and information with
consumer protection in certain product and market practice area.

Consumer education and information cannot do the whole job of consumers cannot buy
them with confidence in the terms of features like safety, standard output, technical know
how etc. A government agency has to review and judge the safety level of various foods,
drugs, toys, appliances, fabrics, automobiles and housing.

Consumer protection also covers production and marketing activities that are
environmentally destructive. The consumers may buy the products but fail to understand the
environmental consequences.

The assumption behind these principles is that the goal of the marketing system is not
to maximize producer’s profile or total consumption or consumer choice, but rather to
maximize life quality. Life quality means meeting basic needs, having available varied and
good quality products and enjoying the physical environment and cultural environment.
Since the marketing system has a major impact on the quality of life, it must be managed on
principles consisting with improving the quality of life.

One of the aspects of the societal marketing includes alliances that have arisen
between environmentalist groups and businesses in the last decade. Typically, this new
relationships are distinguishable from the prior charitable (e.g., donations to or sponsorships
of environmental causes) and commercial relationships (e.g., calendars, T-shirts produced for
environmental groups) because they engage the expert knowledge of the environmental
group and involve it, to varying degrees, in joint problem solving or strategic decision
making with the corporate partner.

Green product endorsements, audits by environmental groups of business programs or


practices and green alliance where the corporate partner's business practices are evaluated

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and improved according to ecological criteria etc are the joint projects covered in this
alliance.

Case Study

Green alliances between McDonald’s and Environmental Defense Fund


(EDF)

Environmental Management – the corporate practices to reduce the ecological harm


of economic processes.

Green alliances, a strategy within corporate environmental management, also have


symbolic and political value - for both partners. The corporation borrows not only the
environmental expertise, but also the credibility, of the ecology group, which by its
allegiance implicitly or explicitly endorses company actions - e.g., producing earth-friendly
products and services or operating in pollution-free ways.

EDF saw significant opportunity for both environmental action and a major, high
visibility, opportunity to test its innovative approach to environmental problem-solving
through corporate partnerships.

McDonald's also educate customers about the company's environmental management


practices, policies, philosophies, and positions on particular issues such as rainforest beef and
the ozone problem. McDonald's worked with several different environmental and nonprofit
groups (e.g., the World Wildlife Fund) to co produce elementary school materials on the
environment. It also plays a role as an environmentally responsible corporate citizen and
constructs itself as green. In this case, given the new ecological awareness of the public,
McDonald's positions itself as having concerns ecological and practical, social as well as
economic.

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Thus, McDonald's steps in managing environmental issues are the examples of


societal marketing. People become increasingly aware of the damage that can be caused to
the environment by products, packaging, by-products and production processes. They may
gradually learn to adopt more environmentally friendly products and, in particular, reject
throwaway products. Green issues are increasingly seen as important by consumers and this
is being reflected in the types of products consumers want to use.

The belief that environmental responsibility is now a corporate function is based on


research indicating that consumers want such changes and will theoretically repay industry
investments by accepting higher prices.

Businesses currently involved with the environmental movement have noticed the
increasing number of markets influenced by environmentally concerned consumers, and
naturally are hoping this trend can boost their companies' long run profits.

Proactive companies like McDonald's are attempting to take leadership roles in the
area of environmentally friendly products in order to gain a competitive advantage.
For McDonald's, environmental marketing has become one of the primary societal marketing
tools.

Thus, today's market for environmentally-friendly goods is greater than ever. To


capitalize on this movement, managers and marketers, as McDonald's case shows, must
promote the environmental benefits of their products and maintain prices in a range near that
of their competitors that do not emphasize environmental concerns. Promoting the
environmental friendliness of products will be most attractive to some customers, while
attributes aimed at convenience will be attractive to others. Although these aspects of the
product mix are important, competitive pricing of environmentally-friendly goods may be
the key to capturing a significant market share. Once high market shares are reached, cost
reduction programs should allow producers to increase profit margins from green products.

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