- Evidence of research into the chosen organisation's sector should be provided. Relevant marketing concepts and theories covered in the module should be used as a framework for the answer throughout the assignment.
- Consideration should be given to both the impact on the chosen organisation and also the impact on society's well-being as a whole.
- Existing activities that are designed to achieve sustainability within the chosen organisation should be identified and evaluated, which may relate to areas such as products, supply chain and marketing communications.
Consumer Demand and Environmental Issues
Sustainable marketing is a wider concept in the marketing and business world. It is based on the environmental and social sustainability. The sustainable marketing has mainly focused on the consumer demand as well as on the environment. An increasing number of the consumer base, purchases on the environment and social impact of the product and services, consumer buy and the companies from which, the consumer purchase (Hardison, 2018). According to some research, approximately 76 percent of customers prefer to purchase a product of environmental friendly in the last twelve months (Hunt, 2011).
However, Sustainable marketing is the process in which it creates, communicates and delivers the value to the customers in such a way that both natural and human capital is preserved or enhanced throughout (Fuller, 2005). The sustainable marketing has two aspects, first, the sustainable marketing means marketing in a sustainable manner, it majorly focuses on the environmental and social issue while doing the marketing. Second, it means marketing sustainability which includes the outward function of sustainable marketing to bring about a society in which striving for sustainability is the norm ( Vorhies & Morgan, 2005).
The demand for sustainable products is increasing in the market. Therefore, the company Sephora has also started concentrating on sustainable marketing. Sephora mainly focused on launching sustainable products which attract customers the most. It can be beneficial for the organization to adopt the sustainable practices. It helps in reducing wastage, increases consumer engagement and loyalty, and provide competitive boundaries to protect the business (Lashley, 2016). Thus, various strategies have been adopted by Sephora to make the market sustainable.
In the learning unit, there will be a detailed discussion about the sustainable marketing of the Sephora company which covers the detailed knowledge about the company, the environmental factors that are creating a need for sustainable marketing within the organization with the impact of the sustainability issues in the organization and the extent to which managing the sustainability within the organization.
The Sephora is the French company which was firstly launched in Paris on August 14, 1969. In 1993, Dominique Manndonnaud takeover the company and merged the product with his own perfume chain under the Sephora brand. The Mandonnaud provided the self-service in which the customers can try the product before buying the product. In July 1997, Mandonnaud and his partner sold Sephora to LVMH. The LVMH expanded the business of Sephora globally which includes beauty and cosmetic products (Sephora, 2018).
(Source: Marketing, 2018)
In 1998 Sephora opened its first United State store in New York and in 2004, opened first Canadian store in Toronto. Sephora also launched its online store in the United State in 1999 and into Canada in 2003. In recent, Sephora operates approximately 360 stores across North America and 2300 stores in 33 countries worldwide, generating over an estimated $4 billion as a revenue in 2013. Around six million people are attracted towards the brand of Sephora (Negiz, 2015).
Sephora is a leading company in the world of beauty which includes global prestige retail, guiding and inspiring clients. The Sephora follows the retail concept which not only covers the beauty products and perfumes but also includes the prestigious product in every category, expert service which is unbiased, respective shopping environment and innovations (FastCompany, 2018)
Sephora's Sustainable Marketing Strategies
Sephora is a chain of beauty stores and personal care. The Company caters cosmetic, fragrance, makeup, skincare, bath and body, lip care, hair care products for men and women. The company deals with the customer through retail stores and the internet (Sephora, 2018).
The product of Sephora involves analytical, strategic and result-oriented inventory management professionals to build the brand and optimize the use of inventory. In the process of selecting the brand, respective members of Sephora departments coordinate to focus on every single element and ingredients, whether it is a product or a brand and decide whether it is good for the clients or not. The response functions are Finance, Marketing, Research and Development, It logistics, Legal and quality assurance (Sephora Careers, 2018). There is a process of the supply chain of Sephora which is explained in the diagram.
(Source: Triple, 2018)
In the first stage, the company collaborates with the suppliers after collaborating, procurement of the products, rate, and management issues regarding the product are done. In the third step, the process of packaging of the products starts after finalizing the product. Then the stock of the company logistic to another place through various transport facilities. The stock purchase from the supplier shifted to the warehouse of the company which is managed by the inventory department. In the step, the whole product is transfer to the distribution centers by mean of transport, then the products are distributed to the different outlets of the Sephora that has a direct link with the customers. In the end, customer purchases the products from outlets.
The main environmental issues from the last decades are the issues of climate changes. Since the Industrial Revolution and contribution towards the global warming, the scientist believes that the activity of human has strongly affected the climate. The average temperature of the earth has risen by 0.8 since 1850, with the highest rise in temperature from the mid-seventies to two thousand and increasingly warmer decades. The main participation of global warming is the emission of the greenhouse gas carbon dioxide which has been increased by burning fossil fuels, energy, and transportation. Therefore, in the last 30 years, the use and extraction of natural resources have been increased to 60 billion tons per year. In the same time frame, the efficiency of resources improved and consumption has also been increased, thus it counterbalancing the progress. One major focal point is the rapid depletion of non-renewable resources such as fossil fuel on which the manufacturing companies are greatly depended. The loss in biodiversity has been roughly 30% globally which is caused by deforestation (Skandrani, Ben Dahmane Mouelhi, & Malek, 2011).
Therefore, The sustainable marketing is concerned with the business decision making of Sephora and reducing the impact on the environment. The main focus of the sustainable marketing is on the whole life cycle of the product. The major impact on the environment can be either at the time of production, consumption or disposal of the product ( Quanis, 2016). It will be explained through the theories of the sustainable marketing which create a need for the sustainable marketing in the organization of Sephora.
The Supply Chain and Inventory Management of Sephora
(Source: AfricaBusinessClassrom, 2018)
The product has a great impact on the environment. It is not possible that any product can have a zero impact on the environment. Therefore, to analyze the environmental impact of the product, life cycle assessment tool (LCA) helps the Sephora during its life. The life cycle assessment tool helps to identify the impact on the environment when a new product is designed. The cosmetic products of Sephora are treated as punk by the Food and Drug Administration and other US government agencies. Many products of Sephora are environmentally persistent and bioaccumulative, which means they can build up in fat tissue. Some ingredients of the Sephora such as PBDES may potentially cause cancer ( Aarondesatnik, 2010). Therefore, it is required for the Sephora to use the LCA tool and adopt the sustainable marketing.
(Source: BuildingGreen, 2018)
The price of the product has a great impact on the purchasing capacity of the customer, it can make or break a purchase. The price of the product not only depends on the paying capacity of the customer but also depends on the quality of the product, demand, and supply, the price of the competitive organization, cost of production and profit margin on the products. Sustainable pricing is affected by many factors and different strategies can be applied. Therefore, it is important that the product should be easily available to the customer but distribution, retail stores and the purchase of the product have environmental impacts which have to be considered. Some of the Australian customers of Sephora has realized that they were charged a high price for cosmetics and skin care by the company ( Ferguson, 2014). Therefore, the company should use the sustainable price tools to control on price and meet the expectation of consumer.
For customers, the product needs to be available easily. The sustainable products of Sephora have to be at the right time and at the right place and also the impact of the distribution has to be taken into account. The distribution channels of Sephora create a great impact on the environment such as packaging, waste, emission, and use of fuel. The emission has directly affected the eco-system of the environment. Sephora concentrates on 5% of the emission and 95% of the emission stem from within the supply chain ( Aportland, 2017).
The promotional activity of the product creates a great impact on the environment. Various strategies have been used by the Sephora to compete in the market. Some of the strategies directly affected the environment negatively. Therefore, there is a great requirement for Sephora to use sustainable marketing.
However, the demand for sustainable products is increasing by the customer. The size of the sustainable market is playing a significant role and is expected to grow to $922 billion by 2014 (Devine, 2018). Sephora has faced many sustainable issues in the market of sustainability which could have a great impact on the Company as a whole.
The avoidance of Sustainable issues by Sephora will create a great impact on the company and the society as a whole (Hess & Ring, 2016). The impacts are explained in below points:
- Company Reputation – The image of the company would be at risk because some of the customers of Sephora stated that the company charged a high price for the cosmetic and skin care product. This would ruin the image of the company.
- Competitive Market – In the market of competition, any wrong step taken by Sephora will create an opportunity for the competitor to lead in the market which will create a negative impact on the company.
- Operational Risk – The sustainable issues have a great impact on the operational activities. The operational activities of Sephora will not run smoothly in the absence of sustainable marketing.
- Loss in Profitability – The Sephora uses more financial and human resources as a comparison to the competitors which cause the loss of profitability to the company.
- Loss of Customer - The ignorance of the sustainable issues by the Sephora create dissatisfaction among the customers which cause loss of customer of Sephora.
- Loss of Stakeholders – The sustainable issues faced by the Sephora may cause loss of stakeholders to the company.
- Rise in Price – The Sephora are not using sustainable tools for pricing the product which causes a rise in the price of products.
- Failing to meet expectation – The Sephora is a huge brand, the customer and stakeholders has a lot of expectations from the company, the expectations of the customer will get fail because of some certain sustainable issues faced by the company.
- Impact on Environment – The Sephora ignored some of the sustainable issues that created a direct impact on the environment. It causes a change in the climate and also will pollute the environment. Only 5% were focused by the company on emission and the remaining 95% are ignored by the company that created a great impact on the environment.
- Wastage of Resources – In the absence of sustainable marketing, the resources will be over-utilized which create a negative impact on the society as a whole because companies are using resources of society, therefore it will create a great impact on the society.
- Exploitation Of Customer – An avoidance of sustainable marketing by the company, cause an unnecessary rise in the price of the product which creates exploitation of customer by charging a high price.
Thus, there are certain issues of sustainability which have the capacity of creating a huge negative impact on the organization and the society as a whole. If the company adopts the sustainability marketing concept then it would create a positive impact on the company as well as on society (Wüstenhagen, 2008). The points are explained below:
- Reduce Cost: By adopting sustainable marketing by the Sephora help to reduce the cost of the products through different methods and technique.
- Reputation: The reputation plays a big role in the organization. If Sephora practices sustainable marketing in the right way, the company can earn the trust of the customer which directly create an impact on the image of the company.
- New Market: The sustainable marketing help in providing a new market to the company which creates new opportunities for the Sephora to enhance their business.
- Reduce Risk – Some of the resources are limited, the sustainable marketing mitigates this problem and the company gains a competitive advantage over competitors by proper utilization of resources. Therefore, Sephora can reduce the risk and can concentrate on earning high profits.
- Retaining and attracting employee: The Sephora can retain and attract employees by practicing sustainability.
- Leadership: The Sephora can earn the power of leadership by implementing a sustainable solution. The company can improve their image and gain a competitive advantage.
Thus, by adopting sustainable marketing, Sephora can earn various advantages which would help in reducing the negative effects on the company and the company can achieve the desired goals. Sephora has also taken certain steps towards the sustainable environment.
Sephora took certain steps towards the improvement of sustainability issues. On 8th December, Association Generation Responsible recognized about the step taken towards sustainable development by Sephora. The Sephora was awarded the Sustainable Brand label as well as the 2015 R award for eco-design (LVMH, 2018).
The Sephora responded towards the climate change by taking steps to control the emissions and eliminate the wastage from the supply chain. To eliminate wastage, the main focus was taken on the packaging pattern by the Sephora. The company started to use waste or sustainable materials for packaging and offering refillable packaging or take off packaging from the products ( Aportland, 2017).
(Source: Sustainable brand, 2018)
Sephora has also taken a step towards the environmental impacts of the company. Sephora took initiative related to sustainability which is explained in the below points:
- Protecting natural resources and ecosystem: Some of the substances was banned because of the harmful chemical included in the formulations of cosmetic by the volunteer of Sephora for that substance, which created a negative impact on the environment.
- Prevent climate changes and preserve energy resources: The Sephora prevent climate change by the recovery of wastage and control over emission and also help to preserve energy resources.
- Control on the emissions: Sephora also took steps to reduce or control the emission across the own supply chain and a network of stores in which the company prepared a detailed report of carbon dioxide, through which it was identified to reduce the impact of carbon dioxide.
- Reduction in the impact of, production and transformation of raw material through eco-design.
- Recovery of Waste: Sephora participated in the CEDRE program, in which the process of sorting, recycling, and recovery of wastage is followed, generated from packaging, manufacturing, distribution, and sale of the cosmetic product ( Aportland, 2017).
The main focus of Sephora is on the suppliers( which include supplier responsibility), eco-design/waste, climate, and energy. Through Sustainable Leadership Council (SLC), the different strategies were developed and implemented for sustainable marketing. Sephora arranged the sustainability programs in which, the Sephora handled program management and an end to end execution, the Sustainability Program Manager is responsible for ( Sephora Careers, 2018) :
- Developing the related project roadmaps
- Responsible for holding of internal partners
- Delivering high-quality projects on-time and within budget
- Achieve Milestone
The Sephora has achieved a little success to control emission, approximately five percent of emission are concentrated in direct operation by the Sephora and ninety-five percent of emission stem from within the supply chain. Sephora also avoided emitting 51 metric tons of CO2 into the atmosphere for which the storekeepers started to use electric transportation across the stores. Even though the LED lighting and HVAC solutions are used across 2300 stores of Sephora to reduce the use of energy and emission. In 2017, approximately 13.2 million KWH of renewable energy purchased by Sephora and Sephora has partnered with EPA Green Power for four years. The company came to stand in top 20 retailers in the US that procure renewable energy. In 2017,3.5 million pounds of waste, diverted from landfills by Sephora. The company also started to create eco-designed lipstick packaging to reduce the use of plastic and induce more use of plant-derived inks. The Sephora also manufactured bags from recycled material and the bags are also recyclable (Sephora Stands, 2018).
(Source: TechinAsia, 2018)
From the above discussion, it is concluded that the operations and products of the companies are consistent, with the content of marketing and practice of sustainability even though most of the companies are not adopting sustainable marketing for its activities. the sustainable marketing covers both the aspect of environmental and social dimensions for the operations of companies. The activities of Sustainable marketing are not limited to marketing, it also covers the degree of sustainability that integrated into the day to day activities. Every company has a target or goal to satisfy their customer through the activities, therefore sustainable marketing is the effective tool to satisfy the customer in a best possible way.
The Sephora is the big brand of cosmetic and body care in the world of beauty. In the recent decades, it has covered the outlets across all over the world. The operational activities are mostly handled by the US company. The company follows certain procedures for the supply chain to deliver the product on time to the end user. The Sephora was taken over by Mandonnaud from the French company then Mandonnaud sold Sephora to LVMH. LVMH expand the Sephora in the world of cosmetic and skin care. In the recent, Sephora has approximately 2300 stores in 33 countries worldwide and 360 stores across North America.
Sephora created a great impact on the environment and society. Sephora was also the reason for climate change in the environment. The activities of Sephora directly impacted on the environment of the country. Some of the sustainable issues (such as high price taken by Sephora from some customers) which were faced by the Sephora that would create a negative impact on the company, which company has to bear. In the recent decades, The company has taken steps to reduce the negative impact on the society and environment. Various strategies were developed and implemented by Sephora to create a sustainable environment.
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