Marketing Strategy and Competitive Positioning pdf ebook

CHAPTER 17 CORPORATE SOCIAL RESPONSIBILITY AND ETHICS
A recent controversy surrounds diesel cars. For some 20 years, manufacturers have been 
urged by the ‘global warming’ lobby and encouraged by governments through tax conces-
sions to persuade motorists to switch to diesel-powered vehicles to protect the environment. 
Research now suggests that diesel emissions are actually more damaging to the environ-
ment and more health-threatening than those from petrol-powered vehicles. Around half 
the new cars sold in the UK were diesels by 2015. One estimate is that diesel cars account 
for more than 5,000 premature deaths in the UK alone each year. The negative impact on 
the credibility of the green lobby and car manufacturers is considerable (Glover, 2015), not 
helped by the scandal of Volkswagen deliberately looking to cheat emissions tests. By 2018, 
governments in many countries (including the UK) had done an about-turn, suggesting that 
all new cars should be electric by the mid twenty-first century. They had little to say to the 
millions of customers who bought diesel cars based on governmental encouragement that 
they were more environmentally friendly.
Similarly, while countries in the West have seen escalating sales of solar panels, symbol-
ising the drive for clean energy and greener lifestyle, the poisonous waste created in their 
production is blighting crops and water supplies. In China, the thriving renewable energy 
industry is accused of air, soil and water pollution, poor safety standards and causing 
withered crops and poisoned rivers around solar panel factories at the heart of the renew-
able energy revolution (Sheridan and Jones, 2010). The overall effect currently may even be 
negative, in spite of the best intentions of those who promote clean energy.
The well-meaning government incentives to persuade car drivers to adopt electric vehi-
cles in Norway includes free access for electric cars to bus lanes. The result has been worse 
congestion as buses struggle to get around the additional extra electric cars in the restricted 
lanes, and a poorer service for those who leave their cars at home and take the bus (Jervell, 
2014). This is not what was intended.
17.4.4 Countering intuition
Intuition (and some vocal opinion) would probably suggest that, generally, healthy food is 
‘good’, traditional cloth babies’ nappies are ‘good’, dishwashers are ‘bad’ and plastic car-
rier bags are ‘bad’.
While consumers who favour healthier eating are likely also to dislike animal testing, 
in 2007 it was reported that the trend towards healthier eating had led to an increase of 
more than 300 per cent in laboratory experiments on animals for food additives, sweeteners 
and health supplements. Animals appear to have become the victims of the fad for health 
foods (Woolf, 2007). In 2008, the British government tried to suppress an embarrassing 
report finding that old-fashioned reusable nappies damage the environment more than 
disposables – the findings are upsetting for proponents of real nappies, who have claimed 
that they can help save the planet (Woolf, 2008).
Reckitt Benckiser is understandably making much of the fact that calculations show that 
using a dishwasher (with Reckitt’s detergent of course) is more environmentally friendly 
than washing up by hand, which uses more energy and water (Harvey, 2007). Even the 
much-vilified supermarket plastic bag turns out to be ‘greener’ in some ways than the paper 
or hessian equivalents, which consume more energy and water and produce more pollution, 
though more expensive reusable bags are better for the environment than any disposable 
bag (Ball, 2009).
17.4.5 Do consumers really care about good causes?
The answer to this question probably is that some do and some do not, suggesting that the 
issue for executives to examine is which consumers care and whether they make a coherent 
target for marketing strategies relating to CSR. Environmentalists were disappointed, for 
example, to see US sales of gas-guzzling 4×4 SUVs and trucks recover with low oil prices – 
as fuel prices dropped, consumer enthusiasm for eco-friendly cars appeared to decline also 

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THE OTHER SIDE OF CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
(Welch, 2008). Similarly, a survey in the UK by Pledge4Plastics revealed a high degree of 
consumer indifference to recycling initiatives (Hull, 2014).
The economic recession encouraged the view that a solid record in sustainability will 
not impress consumers unless there is a direct and easily identified benefit for them (Gary, 
2013). While companies understand the value of green marketing and sustainability, there 
are signs that some consumers remain stubbornly indifferent or antagonistic about going 
green, suggesting the need for more efforts to promote sustainability-focused purchasing 
behaviours (Stafford and Hartman, 2013).
Certainly, a retail viewpoint suggests that consumers fall into four categories regarding 
ethics and social responsibility: (1) committed, cause-driven purchasers (8 per cent of the 
total); (2) those who want to purchase ethically but are not sure how to, and are looking for 
help (30–35 per cent); (3) those who feel the same but doubt their individual purchases can 
make much difference (30–35 per cent); and (4) those who are completely uninterested (the 
rest). Retailers have long commented on the 30:3 phenomenon (30 per cent of purchasers say 
that they thought about workers’ rights, animal welfare and the planet when deciding what 
to buy, but sales figures show only 3 per cent of them act on those thoughts). However, the 
proportion of consumers buying ethically, or poised to do so, is now seen as much higher, 
and growing (Skapinker, 2007).
Interestingly, one recent US study concludes that companies that act in a socially respon-
sible manner and advertise that fact may be able to charge more for their products. The 
researchers conclude that companies should segment their markets and make a particular 
effort to reach out to buyers with high ethical standards, because those are the customers who 
can deliver the biggest potential profit on ethically produced goods (Trudel and Cotte, 2008).
Nonetheless, while a company such as Primark has been severely criticised for the labour 
abuses in its supply chain, it achieved record sales in the economic downturn and recovery 
because of the ultra-low prices on its fashion clothing imports. Its customers appear to place 
a higher value on two T-shirts for £1 than ethical working conditions for those who make 
them. Similarly, ugly images of a seven-year-old boy working a 98-hour week in Delhi for 
7p an hour to make Christmas decorations for British retailer Poundland seemed to have 
had little negative impact on Poundland’s sales (Smith, 2010).
17.4.6 International differences
For the international business, research by Globescan underlines the point that CSR is judged 
differently in different parts of the world because peoples’ top priorities vary. So, for exam-
ple, to Chinese consumers the hallmark of social responsibility is safe, high-quality products, 
while in South Africa what matters most is a contribution to social needs such as healthcare 
and education. In countries including the USA, France, Italy and Switzerland, and much 
of South America, the highest priority is to treat employees fairly. In Australia, Canada, 
Indonesia and the UK, environmental protection is the highest priority. In Turkey, the most 
important indicator of corporate responsibility is charitable donation (Maitland, 2005).
There is an important need to balance global and local issues when examining the 
potential impact of CSR initiatives for a company operating across national and cultural 
boundaries. For example, it is clear that increasing global transparency is an unavoidable 
consequence of communications advances – so while Microsoft maintained a position of 
integrity and social awareness, as well as corporate philanthropy, in the developed world, 
paradoxically workers assembling its computer mice and webcams in China were working 
15-hour shifts in poor conditions for 34p an hour (Hull and Sorrell, 2010).
17.4.7 Internal company barriers
In 2014, the Financial Times (Moore, 2014) reported that the number of business leaders 
supporting CSR had fallen, amid suggestions that share prices did not reflect investments 
in social initiatives. In a post-recession context, the search for business performance has 

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