The Operational Success Factors for Sustainability Marketing among Fast-Moving Consumer Goods


Bachelor Thesis, 2021

68 Pages, Grade: 1,7

Anonymous


Excerpt

List of Contents

List of Contents

List of Figures

List of Tables

List of Abbreviations

1 Introduction
1.1 Methodology

2 Theoretical Foundations
2.1 Sustainability
2.1.1 The Interplay of Sustainability and the Guiding Principle of Sustainable Development
2.1.2 Sustainable Development as a Corporate Guiding Principle
2.1.3 Three Dimensions of Sustainability and the Sustainability Triangle
2.1.3.1 Ecological Dimension
2.1.3.2 Social Dimension
2.1.3.3 Economic Dimension
2.2 The Social and Institutional Drivers towards Sustainability
2.3 The FCMG Industry – Main Facts
2.3.1 The Categories of Economic Goods
2.3.2 Actors and Business Forms
2.4 Sustainability Marketing
2.4.1 The Origin of the Marketing Concept and the Emergence of Sustainability Marketing
2.4.1.1 The Importance of the Operational Component of Sustainability Marketing
2.4.1 The Variety of Sustainability-Related Marketing Currents

3 Analysis
3.1 The Concept of Sustainability Marketing: The Sustainability Model of Belz
3.1.1 Information Level
3.1.2 Configuration Level
3.1.2.1 Normative Level
3.1.2.2 Strategic Level
3.2 The Operational Success Factors for Sustainability Marketing among Fast-Moving Consumer Goods
3.2.1 Operational Level
3.2.1.1 Sustainable Product Policy
3.2.1.1.1 Sustainable Product Stewardship
3.2.1.1.2 Sustainable Product Development
3.2.1.1.3 Eco-Innovation
3.2.1.1.4 Sustainable Brand Policy
3.2.1.1.4.1 Ecological Certification Labels
3.2.1.1.4.2 Building a Sustainable Brand Image and Brand Loyalty
3.2.1.1.5 Sustainable Packaging Policy
3.2.1.2 Sustainable Communication Policy
3.2.1.2.1 Sustainability Advertising (Eco-Advertising)
3.2.1.2.2 Sustainability Sponsoring
3.2.1.2.3 Public Relations
3.2.1.2.4 Online Sustainability Marketing
3.2.1.3 Sustainable Price Policy
3.2.1.4 Sustainable Distribution Policy
3.2.2 Transformation Level
3.3 The Success Factors – A Catalogue of Recommendations for Action
3.3.1 Success Factors of the Sustainable Product Policy
3.3.2 Success Factors of the Sustainable Communication Policy

4 Practical Example: The Frosta Tiefkühlkost LLC
4.1 The Company - Profile, Vision and Goals
4.2 The Implementation of Sustainability Marketing at the Operational Level
4.2.1 Success Factors of the Product Policy
4.2.2 Success Factors of the Communication Policy
4.2.3 Final Reflections

5 Conclusion

6 Bibliography

List of Figures

Figure 1: 17 Sustainable Development Goals

Figure 2: Value Chain

Figure 3: Product Life Cycle

Figure 4: Sustainability Triangle

Figure 5: Fast-moving consumer goods

Figure 6: Sustainability Marketing as dual management concept

Figure 7: The Sustainability Model

Figure 8: Positioning Strategies in Sustainability Marketing

Figure 9: Bio-Siegel

Figure 10: EU-Bio-Logo

Figure 11: Blauer Engel

Figure 12: Fairtrade Label

Figure 13: MSC Label

Figure 14: ASC Label

Figure 15: Approaches to improve Packaging Sustainability

Figure 16: Success Factors of the Sustainable Product Policy

Figure 17: Success Factors of the Sustainable Communication Policy

Figure 18: Frosta Brands

Figure 19: Fisch vom Feld

Figure 20: Sommerküche Gemüse Mix

Figure 21: Paella

Figure 22: Bio – Junge Erbsen

Figure 23: Reinheitsgebot

Figure 24: Frosta Advertisement 1996

Figure 25: Frosta Advertisement 2021

Figure 26: Frosta Website

List of Tables

Table 1: Selected SDGs for Companies

Table 2: Product Line Analysis – Matrix

Table 3: The Frosta Goals

List of Abbreviations

ASC Aquaculture Stewardship Council

BSCI Business Social Compliance Initiative

CO[2] carbon dioxide

cf. confer

FSC Forest Stewardship Council

GRI Global Reporting Initiative

EMAS Eco-Management and Audit Scheme

ILO Internationale Arbeitsorganisation

FMCG fast-moving consumer goods

KrWG Kreislaufwirtschaftsgesetz

LCA Life Cycle Analysis

LCI Life Cycle Inventory

LLC Limited Liability Company

MDG Millennium Development Goal

MSC Marine Stewardship Council

NABU Naturschutzbund Deutschland

OECD Organisation for Economic Co-operation and Development

PLA Product Line Analysis

PR Public Relations

SDG Sustainable Development Goal

SMETA Sedex Members Ethical Trade

UN United Nations

USP Unique Selling Proposition

WBCSD World Business Council for Sustainable Development

WCED World Commission on Environment and Development

1 Introduction

‘Nothing is more powerful than an idea whose time has come.’Victor Hugo (1802 – 1885)

Embedded in social, economic and cultural developments, market-oriented corporate management is subject to continuous change (Meffert, Kenning and Kirchgeorg 2014, p.4). In the 1990s, it was still characterised by a one-sided profit-oriented, economic perspective whose primary goal consisted in the growth of the company's value. The resulting ecological and social problems, such as climate change, the progressive destruction of nature and the environment, and also the emerging demand of society for environmental protection, gradually caused the pendulum to swing in the other direction: Companies striving to operate efficiently in the 21st century must adapt their business activities to the changed market conditions and integrate the idea of sustainability into their corporate structures. In such operational adaptation processes, sustainability marketing is of particular importance (Belz and Bilharz 2012, pp.5-6; Pufé 2017, pp. 26-27; Meffert et al. 2014, p.4). It forms the link between a company and the market and not only serves to transparently communicate the new social-ecological corporate commitment but also to establish sustainable products on the market. However, the implementation of sustainability marketing poses great challenges to companies, as sustainability-related topics are often characterised by a high degree of complexity (Brugger 2010, p.1).

The aim of this paper is therefore to identify the operational factors of sustainability marketing and to translate them into a catalogue of recommendations for action that companies can follow to successfully implement the concept of sustainability marketing into their corporate activities. In the course of this work, special attention will be given to the fast-moving consumer goods (FMCG) sector, as the socio-ecological commitment of companies operating in this sector is increasingly becoming the focus of consumers (Belz and Bilharz 2005, p.20).

1.1 Methodology

Drawing on both printed and electronic sources, this thesis is composed of a total of five chapters. Subsequent to the introduction, the second chapter is dedicated to the theoretical foundations. Here, the origins and the concept of sustainability are explained in more detail, followed by details on the Guiding Principle of Sustainable Development and the three dimensions of sustainability. In addition, the chapter gives an overview of the social and societal changes towards sustainability and defines the special features of the FMCG industry as well as the concept of sustainability marketing. The explanations of the sustainability model by Belz in chapter three form the core of the thesis. Here the focus is placed on the operational level of the model, whose product and communication policy measures are outlined in detail and then highlighted at the end of the section as the success factors for sustainability marketing. They also serve as the anchoring point for the ensuing catalogue of recommendations for action to successfully implement the concept of sustainability marketing into the corporate activities. The importance of these recommendations can be seen in chapter four, where a successful sustainability marketing is presented and analysed on the basis of the FMCG company Frosta. The thesis concludes with a summary of the most important key observations of the individual chapters, rounded off by a future-oriented outlook.

2 Theoretical Foundations

2.1 Sustainability

2.1.1 The Interplay of Sustainability and the Guiding Principle of Sustainable Development

The term sustainability is on everyone's lips and it seems that neither political leaders, companies nor marketers can cope without the positive vocabulary. However, the term does not have a universal meaning in today's linguistic usage and therefore encounters a vague understanding in society (Kropp 2019, p.1). The beginnings of sustainability reach far back into the past. As early as 1713, the Saxon governor Hans Carl von Carlowitz pleaded for a ‘constant and sustained use of the forest’ in his writing entitled Sylvicultura Oeconomica. This was accompanied by the demand that only as much wood be felled as could grow back through planned reforestation, in order to avoid depleting the natural resource base. In its original form, sustainability thus describes the use of a regenerative system whose resources are permanently preserved and can grow back naturally. About 100 years later, Joachim Heinrich Campe defined the core of sustainability as ‘what one sticks to when everything else ceases to last’ (Pufé 2017, pp.37-38). Also, in the 20th century, further attention was paid to the idea of sustainability. The report of 1972 by the scientist Dennis Meadows, The Limits to Growth, addressed the humanity's elitist style of consumption and production and made a powerful case for the necessity of concerted global action to reduce resource use, pollution and the global warming resulting from continued economic and population growth to the point where humanity's survival is possible in the long term (Balderjahn 2021, pp. 13-14; Pufé 2017, p. 39). The Brundtland Report, published in 1987 by the World Commission on Environment and Development (WCED), was ultimately formative for today's understanding of sustainability (Meffert et al. 2014, p.7). It transformed the term into a socio-political guiding principle, the so-called Guiding Principle of Sustainable Development:

Sustainable Development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs (UNESCO, 2021).

In concrete terms, this refers to maintaining an environmentally and socially compatible development across generations that ensures future generations to live just as well as the people currently existing in the world (intergenerational and intragenerational equality). This generational justice demands that all consumers, organisations and companies protect the natural environment and take responsibility for the consequences of their own actions (Balderjahn 2021, pp.14-15). In the course of the Brundtland Report, the idea of Sustainable Development as a global guiding principle was presented to a broader public for the first time (Kropp 2019, p.8; Pufé 2017, p.43). The trigger for the international recognition of the principle and its entry into politics was the United Nations (UN) World Summit on Environment and Development in Rio de Janeiro in 1992, at which a total of 178 states committed themselves to the principle. One of the results of this summit was the adoption of the Agenda 21, an environmental policy action plan consisting of 27 principles with the claim to harmonise social, economic and ecological goal dimensions (Schreiber and Siege 2016, pp.21-30). This three-dimensionality finds broad consensus at the global level and is therefore explained in more detail in section 2.1.3.

As a result of Agenda 21, approaches to action emerged both nationally and internationally in the political, economic and social spheres to counteract the deterioration of people's lives and ensure the sustainable use of resources (Hauff 2014, pp. 15-16; Pufé 2017, p.52). To further concretise efforts towards Sustainable Development, further follow-up conferences took place after Agenda 21, such as the Rio+5 Summit in New York, the Rio+10 World Summit on Sustainable Development in Johannesburg in 2002 and the Rio+20 Summit in Brazil (Pufé 2017, p.50). Likewise at the turn of the millennium, the UN set eight development goals, commonly known as the Millennium Development Goals (MDGs). These commit all of the UN member states to actively contribute to poverty reduction, peacekeeping and environmental protection. A milestone in the recent history of the UN are the Sustainable Development Goals (SDGs), which were adopted in September 2015 as part of the Agenda 30. A total of 17 main goals (cf. figure 1) and 169 sub-goals form the core of the Agenda, which nowadays represents a universally valid target system for sustainability and development aspects for all UN member states (Kropp 2019, pp.9-10).

Abbildung in dieser Leseprobe nicht enthalten

Figure 1: 17 Sustainable Development Goals (source: United Nations 2021)

The previous remarks have made clear that, despite its evolution into the Guiding Principle of Sustainable Development, the concept of sustainability is still gaining in contour and is interpreted differently, with a wide variety of scientific, cultural and political points of reference. Both terms basically share a comprehensive process of social change that aims at responsible production and consumption patterns, environmental protection, resource conservation, poverty reduction and peacekeeping in order to maintain the earth habitable for humanity under liveable conditions, both now and in the future. However, a clear understanding of the action measures required for these objectives does not yet exist (Pufé 2017, pp.24-25).

In order to simplify the multi-layered meaning of the sustainability concept and to use it as meaningfully as possible, the term ‘sustainable’ will subsequently serve to describe conditions, events and actions that are characterised by a high degree of environmental and social compatibility and thus have very little or virtually no harmful impact on nature and mankind.

2.1.2 Sustainable Development as a Corporate Guiding Principle

In order to translate the Guiding Principle of Sustainable Development into a corporate guiding principle, the following precepts are indispensable (Balderjahn 2021, pp.19-20). The responsibility principle represents the normative, ethical-moral element of sustainable management in the company and is derived directly from the intragenerational and intergenerational equality of the Brundtland Report. According to this principle, every social group, every company and every organisation bears the consequences of its own actions (Emrich 2015, pp.342). Thus, all these actors are responsible for maintaining and securing the social and natural foundations of human life (Balderjahn 2004, p.4). For companies, this implies an overall responsibility with regard to environmentally and socially responsible economic activity, which relates to all phases of the value chain (cf. figure 2) and the entire product life cycle (cf. figure 3), i.e. from the cradle to grave of a product (Emrich 2015, p.342; Herrmann 2010, p. 65; Kotler, Keller, Brady, Goodman and Hansen 2009, p.80).

Abbildung in dieser Leseprobe nicht enthalten

Figure 3: Product Life Cycle (own illustration, source: Herrmann 2010, pp.278-281)

The circular flow principle is based on the measures of the circular economy. Accordingly, it is aimed at creating closed industrial material flows in all stages of the value chain. From the company's point of view, this is linked to concrete requirements for waste avoidance in production and the recyclability of end-of-life products. The continuous use of raw materials recovered from consumer waste (e.g. plastic bottles) and reused as so-called secondary raw materials can reduce the excessive consumption of natural resources (Balderjahn 2004, pp.5-7). Furthermore, the circular flow principle includes innovations in the form of more socially and environmentally friendly packaging (e.g. paper packaging instead of plastic packaging) (Dinkel 2021). In Germany, the principles of the circular economy are laid down in the so-called Kreislaufwirtschaftsgesetz (KrWG) (bmu 2021). In addition to the creation of closed material cycles and the avoidance of waste, this focuses on product stewardship (cf. 3.2.1.1.1) (Balderjahn 2004, pp.5-6; Emrich 2015, p.276).

2.1.3 Three Dimensions of Sustainability and the Sustainability Triangle

Chapter 2.1.1 already presented the three dimensions of sustainability that have emerged as central features of Sustainable Development after the Rio Conference in 1992 and especially after Agenda 21 (Hauff 2014, p.15). The dimensions are conceptualised in the framework of the sustainability triangle (originally known as the three pillars model) and represent the target areas of sustainable economic activity (Balderjahn 2004, p.9; Pufé 2017, pp.99-100).

Abbildung in dieser Leseprobe nicht enthalten

Figure 4: Sustainability Triangle (own illustration, source: Pufé 2017, p.112)

This triangle symbolises that all three areas must be in a balanced relationship to each other so that the overarching goal of Sustainable Development can be achieved (Hauff and Kleine 2009, pp.119-120). In the following, the dimensions of the Sustainability Triangle will be explained in detail.

2.1.3.1 Ecological Dimension

The ecological dimension focuses on the protection and preservation of the environment and requires companies to adopt sustainable business practices, which are characterised in particular by the reduction of raw material consumption and pollutant emissions as well as the control of risks in production and consumption processes. The targets of a sustainable corporate management are eco-efficiency, consistency and sufficiency (Balderjahn 2021, pp.29-32).

Eco-efficiency refers to the efficiency with which resources are used. It measures the consumption of resources (input) in relation to a unit of output and is calculated as the ratio of output to input. Hence, the higher the eco-efficiency, the fewer resources are used to produce a product. Higher eco-efficiency can be achieved, for example, by a lower use of materials and an increased use of renewable raw materials (e.g. wood) and secondary raw materials (cf. 2.1.2) (Balderjahn 2021, p.32; bmel 2020).

At the centre of the consistency principle as the second target parameter is the development of environmentally compatible production technologies, the reduction of potential hazards for the environment (e.g. minimised use of environmental toxins and substances harmful to nature) and the best possible imitation of the natures' material and energy cycles (e.g. by reusing industrial process water). By bringing economic material and energy flows into harmony with those in nature, they are considered consistent and environmentally friendly and do not require any subsequent damage control. In the forefront of the consistency principle are three decisive criteria that may only be implemented in the course of comprehensive technological changes and a mental cultural change of the company (Balderjahn 2021, p.33; Pufé, 2017, p.126):

- Thinking, acting and producing in accordance with the circular flow principle
- Reuse of waste for further products
- Natural cycles serve as orientation

The s ufficiency principle, on the other hand, is based on the maxim less is more. It seeks to decrease the resource consumption to a level that does not exceed the capacity limits of the earth by changing human consumption patterns and lowering the demand for goods. In this process, the reduced consumption of resources does not lead to renunciation, but to a satisfied life in which people only consume what is sufficient. Among the sufficiency criteria are (Balderjahn 2021, p.34; Pufé 2017, pp.124-125):

- Avoiding any waste of resources by pursuing more sustainable consumption styles
- Observance of the sufficiency principle in the product range: a smaller but more sustainable product range

2.1.3.2 Social Dimension

The social dimension can be defined as a measure of the social compatibility of corporate action. It encompasses the relationship structure with all stakeholders (suppliers, products, employees, customers, etc.) and manifests itself in a company's willingness to assume responsibility for the well-being of all stakeholders in the value chain. Through the initiation of measures to promote, enforce and implement social working conditions (e.g. compliance with occupational health and safety laws) and projects (e.g. creation of social infrastructure facilities such as schools), companies can have a positive impact on the social environment (Balderjahn 2004, pp.13-14).

2.1.3.3 Economic Dimension

The ecological as well as the social dimension should always be seen from the perspective of the economic dimension. After all, only a company that is competitive has the potential for social-ecological commitment. However, this must not be achieved by disregarding socio-ecological concerns. Apart from ensuring the competitiveness of a company, the economic dimension also includes the economic benefit for society associated with the business activity. A company can make a significant contribution to the creation of a decent standard of living and to poverty reduction (Balderjahn 2021, pp.35-36). In this respect, selected SDGs provide excellent guidance:

Table 1: Selected SDGs for Companies (own illustration, source: United Nations 2021)

Abbildung in dieser Leseprobe nicht enthalten

2.2 The Social and Institutional Drivers towards Sustainability

For some time now, there has been a significant paradigm shift in the awareness of our society (Emrich 2015, p.294). More and more people are orienting their lives towards sustainability and make their consumption decisions taking into account health aspects, environmental friendliness, generational responsibility and climate responsibility (Brunner 2014). Against this backdrop, it is not surprising that companies are increasingly including sustainable products in their product range and are trying by all means to adapt to the more stringent expectations of customers in today's highly differentiated and competitive markets (Errichiello and Zschiesche 2017, p.46). It is questionable at this point which factors have triggered this comprehensive social and institutional change in awareness.

The strengthening of the sustainability thought in the social consciousness is fed by various sources. These undoubtedly include the serious environmental disasters of the past and present, for which humans are directly responsible as a result of their careless treatment of nature (Weber 2008, pp.34-35).

The anthropogenic use of land, especially through overgrazing, excessive exploitation of land and the waste of water resources, accelerates desertification. A phenomenon defined by the UN as soil degradation in arid, semi-arid and dry sub-humid areas, with serious consequences such as erosion, drought or loss of biodiversity. Currently, 40% of the earth's surface is already affected by desertification (bpb 2019; Weber 2008, p.197). The burning of fossil fuels, deforestation and factory farming are the reason for the increase in atmospheric greenhouse gases and the associated greenhouse effect. This in turn is steadily driving climate change, which is why both humans and animals are facing heat waves, forest fires, heavy precipitation and floods triggered by extreme climatic changes (Europäische Kommission 2021b). This will result in further social ills such as environmentally induced hunger, diseases or rural exodus. Besides these momentous environmental problems, other aspects have contributed to the establishment of the sustainability idea in the human consciousness. These include not only the increasing scarcity of natural resources, triggered by the rapidly growing world population and the relentless material hunger of industrialised and emerging countries, but also the ever-widening gap between rich and poor in developing countries (OXFAM 2021; Pufé 2017, pp.78-80). Many of these global challenges and emergencies lie outside the realm of society's perception but are constantly picked up by the media and thus brought directly to the society's attention. It is therefore obvious that media-based reporting is of particular importance in raising society's awareness of these issues (Neverla and Schäfer 2012, pp.3-4). Eventually, the consequences of unsustainable actions are also publicly discussed through political debates on ecological issues (Errichiello and Zschiesche 2017, p.46).

The new, intensified sustainability awareness of consumers and the accompanying demand for less polluting, socially just and ecologically friendly products makes it almost impossible for today's companies to act unethically without being boycotted or publicly denounced on the internet (Emrich 2015, pp.54-55; Meinert 2018). They are forced to adapt to the needs of consumers and to expand their range by sustainable goods in order to be able to survive on the market in the long term. Furthermore, the increased requirements of state environmental protection regulations, such as e.g. the German Kreislaufwirtschaftsgesetz or the Bundes - Immissionsgesetz are pushing companies to restructure. They leave hardly any loopholes for environmentally damaging behaviour and transform the appeal for sustainability into an obligation for sustainable economic activity (Errichiello and Zschiesche 2017, p.3). Alongside this external social and regulatory pressure to develop an awareness of a more socially and environmentally friendly way of doing business, some companies are also showing an intrinsic interest in gradually changing their processes in favour of sustainability. The main drivers for this are aspects such as innovation, differentiation and competitiveness. This is proven by a study conducted by the Munich Chamber of Industry and Commerce in 2015, in which 229 companies from the industrial, the service and the trade sectors were asked what benefits they see in pursuing the SDGs, which are currently regarded as the only universally valid orientation framework for companies to solve the global challenges mentioned above (Umweltbundesamt 2021). 49% of these companies claim that the implementation of the goals favours the development of new markets, strengthens the relationship with social and political actors and reveals new fields of innovation. 56% affirm that sustainable goals can only be achieved by society as a whole and 63% justify the application of the SDGs with the conviction that sustainability is increasingly becoming the focus of entrepreneurial trade and should therefore not be ignored (ihk-muenchen 2015). Furthermore, the survey by the emnid opinion research institute can be taken into consideration, in which 225 out of 250 managers agreed that sustainably oriented companies can expect a greater competitive advantage and thus economic success in the long term than those which are exclusively profit-oriented (Pufé 2017, p.31).

2.3 The FCMG Industry – Main Facts

2.3.1 The Categories of Economic Goods

It is obvious that a development towards sustainable products had its origin in the offer of food and care products. After all, everything that goes on or into the body and is in everyday use is very close to human beings (Errichiello and Zschiesche 2017, p.33). In the following, it is therefore important to first develop an understanding of the fast-moving consumer goods sector. To this end, a classification of all economic goods is presented, followed by an overview of the main FMCG players and typical forms of business in the sector.

Based on the totality of all available economic goods, a distinction must first be made between intangible and tangible goods. Intangible goods include, for example, services and rights, while tangible goods are divided into either consumer goods, capital goods or production goods. Capital goods (e.g. machinery and warehouses) and production goods (e.g. raw materials and semi-finished goods) are not acquired by consumers but by companies in commercial procurement processes and flow into the production of services (Buttkus and Eberenz 2014, pp.4-5; Kirchgeorg 2021; Schmidt 2021). Consumer goods, conversely, are produced and distributed for private consumption by end users. They can be delimited and typologized by the characteristics of frequency of use, purchase habit and turnover frequency. With regard to FMCG goods, the typology by turnover frequency is of particular importance. Products are classified as fast-moving consumer goods if they are characterised by a high turnover rate or, to put it simply, a short time spent on the shelf at the point of sale (Buttkus and Eberenz 2014, p.5; Naderer and Balzer 2011, p.607).

These include, above all, foodstuffs where the high turnover frequency results on the one hand from the need for use and replacement by consumers and on the other hand from the generally short storage life. In a final step, FMCG goods must be assigned to two decisive categories: According to the Nielsen classification, the food category includes all food, beverages and tobacco products, while the near-food segment includes cosmetics, personal care products, cleaning products, paper - hygiene products and pet supplies (Buttkus and Eberenz 2014, pp.6-7; Statista 2021a).

Abbildung in dieser Leseprobe nicht enthalten

Figure 5: Fast-moving consumer goods (own illustration, sources: Buttkurs and Eberenz 2014, pp.4-7; Naderer and Balzer 2011, p.607; Statista 2021a)

2.3.2 Actors and Business Forms

The FMCG industry is dominated by multinational companies with very different product and brand portfolios that set them apart from their competitors. Common to all these portfolios is that they are made up of goods for everyday use (Buttkus and Eberenz 2014, p.5; Statista 2021a). By selling these products on the market, FMCG companies therefore have a close proximity to their customers. Some of the world's best-known FMCG producers are Nestlé, Procter & Gamble, PepsiCo, Unilever and the German manufacturers Henkel, Dr. Oetker and Beiersdorf (Statista 2021a). The distribution of near-food and food articles in Germany takes place in the various forms of food retailing, which can be characterised according to the key features of assortment, price and sales area. Full-range food retailers are characterised by a wide variety of brands and a broad range of food and near-food products (e.g. Rewe, Kaufland, Edeka) (Aschermann 2016; GfK 2019). In contrast, discounters are defined by a smaller range of goods and a low-price policy (e.g. Aldi, Lidl, Penny). Another type of business is the self-service department shop, which has a sales area of at least 5.000 m² and offers a wide range of food, near-food and non-food products (e.g. clothing) (Reinartz and Käuferle 2014, pp. 22-23). The largest assortment of near-food products is offered by drugstores (e.g. dm, Müller) (wirtschaftslexikon24 2021). In 2020, according to estimates by the German Society for Consumer Research, 77% of the total food retail turnover amounting to more than 139 billion EUR could be attributed to discounters and drugstores only, making these forms of business the most important shopping locations for German consumers (Statista 2021a).

2.4 Sustainability Marketing

2.4.1 The Origin of the Marketing Concept and the Emergence of Sustainability Marketing

To round off the theoretical foundations, the origins of conventional marketing as well as the development of sustainability marketing are presented as the concluding aspects.

The term marketing has been adopted from the Anglo-American culture into the German language after the Second World War and was initially considered a synonym for the sales function, which constituted a significant economic core function of the commercial sector (Weeser-Krell 1994, p.17). Today, the term is understood on the one hand as an operative leadership function focusing on sales and distribution and in which the four instruments of the marketing mix are used: Product policy, price policy, communication policy and distribution policy. At the same time, however, marketing is also considered a normative guiding idea of corporate management, which aims at a market-oriented coordination of all operational areas and functions and attempts to align the entire company with the needs of current and potential customers and the strategies of competitors. This two-sided understanding of the marketing concept leads both in theory and in practice to the view of marketing as a dual management concept (Belz and Bilharz 2005, pp.3-5; Meffert, Burmann, Kirchgeorg and Eisenbeiß 2019, pp.12-13). But what is the relationship between marketing and sustainability?

The central goal of conventional marketing is to influence the consumers' demand in a way that allows a company to increase its sales and turnover. Yet this is accompanied by negative effects on society and the environment, for example in the form of the economisation of life, excessive material consumption or the exploitation of natural resources. In the context of Sustainable Development, these kinds of problems have been discussed extensively, which is why the totality of all discussions on the topic of sustainability could be seen as an impetus for the emergence of sustainability marketing. In the process of transferring sustainability aspects to marketing, the resulting sustainability marketing should not only be able to compensate for the negative effects of conventional marketing, but also to ensure the economic success of the company while at the same time reducing social and ecological issues. Since sustainability marketing is derived from conventional marketing, it can also be interpreted as a dual management concept. The below figure illustrates that in addition to the classic market-oriented corporate management (focus on customers and competitors), there is an environmentally oriented management (focus on ecology and social issues), which is intended to secure a market-, environmentally- and socially-oriented coordination of all operational areas and functions (Belz and Bilharz 2005, pp.3-6).

Abbildung in dieser Leseprobe nicht enthalten

Figure 6: Sustainability Marketing as dual management concept (own illustration, source: Belz and Bilharz 2005, p.5)

As such, sustainability marketing is an approach to corporate management that proactively addresses the opportunities and risks of the markets (market-oriented action), includes environmental protection measures (environmentally compatible action) and strives for social responsibility (socially compatible action).

According to Belz and Bilharz (2005, pp.5-6), sustainability marketing is about:

‘Satisfying individual customer needs in a way that avoids ecological burdens as much as possible and that considers social concerns to the greatest extent possible. This describes the immanent tension between customer needs, ecology and social issues in sustainability marketing. Such an understanding of marketing is based on a comprehensive understanding of sustainability in the sense of the Brundtland Commission.’

Consequently, the main difference to conventional marketing is that sustainability marketing does not primarily strive for economic objectives, but also gives equal priority to socio-ecological issues and concerns in order to mitigate the negative impacts of current business decisions on future generations. Ideally, this results in the successful marketing and placement of sustainable products as the ultimate goal of sustainability marketing (Belz and Bilharz 2005, pp.3-5; Belz and Peattie 2012, p.29).

2.4.1.1 The Importance of the Operational Component of Sustainability Marketing

In view of the fact that the primary goal of sustainability marketing lies in the successful marketing and market placement of sustainable products (cf. 2.4.1), the operational component of the approach becomes the focus of attention. It refers to the distribution and selling of sustainable products by applying the sustainability-oriented marketing mix (sustainable product policy, sustainable price policy, sustainable communication policy and sustainable distribution policy), whereby the overarching goal of sustainability marketing can be fulfilled. Since the sustainable product policy as well as the sustainable communication policy cover all areas in connection with sustainable products, they are considered to be the guarantors of success for sustainability marketing (Prüne 2013, pp. 92-95).

2.4.1 The Variety of Sustainability-Related Marketing Currents

Aside from conventional marketing, there are a number of other concepts that can be clearly differentiated from sustainability marketing. These include marketing for sustainability, which is primarily based on non-commercial organisations. These usually have less interest in offering sustainable products on the market. Instead, their activities focus on drawing the public's attention to socio-ecological problems and pointing out environmentally compatible options for action. An example of this would be the environmental foundation NABU, whereby the abbreviation is short for Naturschutzbund Deutschland (NABU 2021). Sustainability management should also not be equated with sustainability marketing. Both approaches have a market and environmental orientation as management philosophies in common. However, sustainability management concentrates primarily on the coordination of the company's divisions through sustainable environmental management systems. At the European level, the Eco-Management and Audit Scheme (EMAS) is of particular importance in this respect. EMAS measures are based on the international standard for environmental management systems EN ISO 14001 and, among other things, enable companies to get started with operational environmental protection, serve to create a positive working atmosphere and increase both transparency and credibility and ultimately the reputation of their users (EMAS 2020). Macro-marketing, societal marketing and eco-marketing also represent currents that are similar to sustainability marketing. Macro-marketing extends conventional marketing with its micro-economic production and sales policy decision criteria to include macro-economic societal aspects. In this way, companies are encouraged by societal interest groups to act in a sustainable manner. Societal marketing is derived from the human concept of marketing, which is characterised by the abandonment of exclusively profit-oriented goals in favour of humanitarian goals. It seeks to actively incorporate the socially responsible demands desired by consumers into corporate activities, for example in the form of product safety or the payment of fair wages (Balderjahn 2021, pp.156-167). The eco-marketing can be described as a form of social marketing. It elevates environmental protection to the rank of a corporate guiding principle and aims to reduce environmental pollution throughout the entire product life cycle and beyond legal and social standards (Balderjahn 2021, p.157).

3 Analysis

3.1 The Concept of Sustainability Marketing: The Sustainability Model of Belz

This work focuses on the operational success factors for sustainability marketing among fast-moving consumer goods. A concept that has proven its worth in connection with sustainability marketing is the sustainability model developed by the scientist Frank Martin Belz. It is characterised by the constant and deliberate inclusion of ecological and social criteria and consists of a total of six steps, which together form the information level, the configuration level and the transformation level (cf. figure 7) (Belz and Bilharz 2005, pp.20-27).

Abbildung in dieser Leseprobe nicht enthalten

Figure 7: The Sustainability Model (own illustration, source: Belz and Bilharz 2005, p.20)

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Details

Title
The Operational Success Factors for Sustainability Marketing among Fast-Moving Consumer Goods
Grade
1,7
Year
2021
Pages
68
Catalog Number
V1302190
ISBN (Book)
9783346768872
Language
English
Keywords
operational, success, factors, sustainability, marketing, fast-moving, consumer, goods
Quote paper
Anonymous, 2021, The Operational Success Factors for Sustainability Marketing among Fast-Moving Consumer Goods, Munich, GRIN Verlag, https://www.grin.com/document/1302190

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