Marketing Strategy and Competitive Positioning pdf ebook

Figure 17.2 
The other side of CSR
Potential risks and negative outcomes with CSR initiatives
Criticisms of
CSR
initiatives
Exaggerated
and
misleading
claims
Doing bad
through doing
good
Countering
intuition
Do
consumers
really care
about good
causes?
International
differences
Internal
company 
barriers

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THE OTHER SIDE OF CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
marketing. However, research suggests that these moves are likely to be ineffective or even 
counter-productive: some scientific journals refuse to publish research sponsored by the 
tobacco industry, many stakeholder groups will not risk their own reputations by engag-
ing with tobacco companies and CSR claims are regarded by many as window-dressing at 
best. While the tobacco industry can defend its position by showing integrity in its supply 
chain (such as by improving the working conditions of plantation employees), it is unable to 
demonstrate a contribution to the well-being of society (because of the addictive and lethally 
dangerous nature of its products) (Palazzo and Richter, 2005). While defensive CSR may 
offer some advantages to tobacco companies, a proactive stance is unlikely to be effective.
17.4.2 Exaggerated and misleading claims for CSR
Some companies have been accused of unscrupulous marketing ploys that use green propa-
ganda to attract customers, and the Advertising Standards Authority (ASA) has already 
ruled against several spurious claims of ‘greenery’ (Hanlon, 2007). The ploy consists of 
aiming to sell more by making people feel guilty. For example, while British supermarkets 
compete aggressively to prove their green credentials (Goodman, 2006), groups such as the 
National Consumer Council suggest that they fail to live up to their claims when tested 
against objective criteria, such as making seasonal foods available, taking products from 
sustainable sources, stocking organic products and cutting waste (Harvey and Rigby, 2006). 
Certainly, the fact that Tesco’s ‘local’ chickens go on a thousand-mile round trip before being 
put on sale suggests a cynical use of the term ‘local’ (Allen, 2008). Supermarkets, including 
Tesco and Sainsbury’s in the UK, stand accused of ‘greenwash’ – making false ‘eco’ claims 
about their products to deceive consumers seeking a ‘green’ lifestyle (Poulter, 2010).
Similar controversy continues to surround the Fairtrade programme and brand. 
Although very successful – for example, from 2009 all Cadbury’s chocolate carried the 
ethical logo, as well as all Tate & Lyle’s retail sugar (Boyle, 2009; Beattie, 2008) – the Adam 
Smith Institute’s report ‘Unfair Trade’ (Adam Smith Institute, 2008) concludes that Fair-
trade: (1) helps only a very small number of farmers, while leaving the majority worse off; 
(2) favours producers from better-off nations such as Mexico rather than poorer African 
nations; (3) holds back economic development by rewarding the inefficient; (4) creates a 
situation where supermarkets profit more from the higher price of Fairtrade goods than 
do the farmers; and (5) that only a fifth of produce grown on Fairtrade-approved farms is 
actually purchased at its guaranteed fair price. For example, it was estimated in 2006 that 
of the £200 million spent on Fairtrade products in the UK, only £42 million went back to 
those in the developing world – supermarkets took 32p in every pound spent and the rest 
went to middlemen and the licensing fees charged by the Fairtrade organisation (Ebrahami, 
2006). The ‘Unfair Trade’ report claims that ‘At best, Fairtrade is a marketing device that 
does the poor little good. At worst, it may inadvertently be harming some of the planet’s 
most vulnerable people.’
17.4.3 Doing bad through doing good
Other critics of CSR focus on the ‘unintended consequences’ of well-meaning social initia-
tives. For example, planting trees in Uganda to offset greenhouse gas emissions in Europe 
was an attractive idea, which became less appealing in the light of Ugandan farmers being 
evicted from their land at gunpoint to make room for a forest (Zizola, 2007). Similarly, fer-
vent environmentalist support for biofuels has diminished somewhat as it has become clear 
that switching crops to biofuels has created food shortages in many emerging markets and 
contributed to rising food prices in the developed countries (Blas and Wiggins, 2007). More 
minor initiatives can also fail through their actual rather than intended consequences. In 
2006, B&Q announced that it would cease selling environmentally-friendly roof top wind 
turbines, because they do not work in built-up areas and, worse, they create considerable 
noise pollution (Crooks, 2009).

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