Sustainability, CSR, PR, Eco-labels and purchasing decisions

I have done some research and interviews lately about sustainability issues and how it relates to consuming behaviour and their buying decision. Obviously, we have talked about sustainability a lot these years. On personal level, how one can conduct a sustainable life or on corporation level, what they can do to sustain their business at first and the ecosystem in general later. Because by definition, sustainability is about to meet the need of the current generation first in order to make it a lively form before one can pass it to the next generation. Understand it that way, there are certain issues to discuss about the underlying meanings of sustainability in corporations. I got a chance to talk with CSR department of Markela and Globehope and get some insights which may be interesting to share. Would love to have more discussion about questions raised from those issues

The pain of CSR:
Markela is one of the first Finnish company that is flagship on sustainability communication with its customers. They open their resources and manufacture information, have a formal format of annual sustainability report instead of including it as a small part in the general report. Properly, the company has invested a lot into their sustainable development and CSR strategies. In our current economic crisis, the issue raised is how to evaluate to effectiveness of that CSR investment into company’s value. No doubt they are doing the right thing for a long term result. But as cash flow requirement, the need for a real-time result of sustainability marketing is burning. How one company can bring sustainability issue (long-term) and profit issue (short term) together?

 IQMatrix_large.f0160d06

CSR effectiveness: when every companies talk about CSR and good causes, part of them really do that, other don’t. Consumers aware of the facts there are liars in the air. How to gain real trust from consumers and keep the reputation?

 CSR trust
Eco-labels and consumer decision:

Eco-labels are expensive. Some of them charge some percentage of the revenue. To CSR point of view, the eco-labels have no meaning but to expand to a new market. When most of the companies acquire similar labels, there is no competitive advantage to have it but it’s disadvantage not to have one. Thus, labels are like a dead-cost that one company must pay for to show their concerns of sustainability. In B2B business, it save time in selling process as the purchasing specialists will only buy from labeled partners, to secure from media and reduce risks. Nevertheless, in B2C business, end-users’ decision based on their trust and acknowledge of the products, will labels really work nowadays in this case?

Sustainability weight against other criteria when making decision:
Everyone talks about sustainability, but when they need to make buying decision, 60% of the decision is made on the price criteria and more than 30% on the quality criteria. The rest depends on emotions with the product: designs, brands, personal connections with the companies. What sustainability marketing can do to change the behaviour?

Michelle
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1 comment
  1. Hello,
    Your blog entry was about two important issues: the challenges of a company when it comes to sustainability and cash-flow, and the relationship of CSR, eco-labels and sustainability marketing in the purchase decision of the consumer. I think the role of marketing is to communicate the product benefits and company values to the consumers, and especially to highlight the added value compared to competitors and those qualities that the company does better as its competitors. The ideal situation of sustainability is that all the companies in the world act sustainably in social, environmental and economical terms. Then, what is the added value of a sustainable product only looking at the performance? The point I think I am trying to make is to what extend should a company actually stress environmental and social aspects in their business over product features, attributes and benefits.

    The over-stressing of sustainability is very visible in the inflation that eco-labels are facing these days. There is a label for almost everything, and therefore it is difficult for the consumer to understand the jungle of labels and which label is more serious than another. There are, however, companies that do not use any labels as a principle. One of them is Fazer, and the main argument to do so is the fact that labels don’t prove anything of the process. They rather have the process in their own hand completely, and the strategy seems to work because no one is deputing the responsibility of Fazer.

    The final question you asked is very relevant: how powerful is sustainability marketing really? Word-of-mouth for instance – whether correct or wrong information is spread – is an essential part in the final purchase decision of the consumer. Additionally, previous experiences with a competitor, the social environment and acceptance of buying a different kind of product in that environment and news read in the media relating to sustainability in general or to a particular company play a crucial role in the final purchase decision. It is a challenge in general marketing, but I think especially in sustainability marketing because there is still a rather big portion of the population who is skeptical about the whole issue of sustainability.

    It is so much easier to list the problems and challenges than listing the solutions to them, isn’t it?
    Marleen

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