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What is Socially Responsible Marketing?

Question:

Discuss about the Social Responsibility in Marketing.

Socially responsible marketing is an ethical framework which provides that a corporation or individual has a responsibility to act as per the benefit of society at large. According to Kotler and Keller (2015, p.629), it is a marketing philosophy that is undertaken by a company which ensures that the best interest of the community is present in the business structure. It is focused on the idea that the marketing policies of a firm should not only be profit-driven, but they should also include the social and ethical values which benefit the society and citizens. Modern organizations are larger than ever, and their operations affect a large section of society. Therefore, it is necessary that their marketing policies should include social responsibility principles that can assist the company fulfilling their obligation towards the development of society. This report will focus on the requirement of socially reasonable marketing in modern businesses, and it analyzes various types of SRM methods. Further, the report will include a recommendation for Sri Lanka’s companies to improve their social responsibility marketing policies based on the book of Philip Kotler and Kevin Lane Keller.

Socially responsible marketing is a philosophy which concentrates on honesty, fairness, and obligation of a corporation towards the society. As per Jahdi and Acikdilli (2009), the companies have a responsibility to implement ethical policies in their marketing strategy to ensure proper development of the community. The SRM policies involve focusing efforts on the attraction of customers which enhances the operations and revenue of the business. The examples of social responsibilities include funding charities, using recyclable packaging and promotion of social awareness campaigns.

Bhattacharya, Sen and Korschun (2008) sated that many corporations have adopted social responsibility in their marketing strategy to assist the development of a community or to improve the quality of products and services. For example, the marketing department may introduce a campaign which encourages customers to buy a bundle of socks and each such purchase the company will donate one pair of socks to the people who need it. As a result of such campaign, the company can increase its sales and at the same time fulfill its obligation towards society. The fulfillment of social responsibility in marketing assists in fulfillment of ethical and moral duties of the company and also sustains the development of the community.

Using an effective SRM model can be beneficial for a corporation, individuals, and society; security of people is the primary benefit of SRM. According to Kotler and Keller (2015, p.631), the product or service of a corporation can be hazardous to the health of people, animals or the environment. Therefore, the company should provide correct advisories and warnings to ensure that people’s lives are safe while using hazardous products. Using SRM structure allow corporations to become honest with their customer; people’s trust in a company increases if the firm implements an effective SRM model (Armstrong et al., 2015). It also allows enterprises to maintain transparency into their operations since SRM model require them to provide information regarding their products such as ingredients used or process of manufacturing. The popularity of SRM models is increasing in developing countries such as Sri Lanka because it requires corporations to ethically price their products rather them take advantage of their monopoly position (Indounas, 2008).

Importance of Socially Responsible Marketing

Along with numerous benefits, there are several limitations of using SRM model as well. The main limitation of SRM is that it shifts the focus of a corporation from its organisational activities to social welfare; the shifting of focus can reduce the financial performance of a firm. The shareholders did not prefer if the company focuses on social responsibilities rather than profit maximisation; it can lead to reduction in a number of investors (Bhattacharya, Korschun and Sen, 2009). The enterprises might improve their reputation through SRM model, but they lack competitive advantage in the market which results in decreased sales and profits. Although, there are several disadvantages, the benefits of SRM assist in the safety of individuals and society. It helps enterprises to fulfill their moral duties; therefore, modern firms should implement an effective SRM model.

According to Aguinis and Glavas (2012), there are several types of marketing concepts which include in the definition of social responsibilities in marketing such as for social marketing, quality of life, socially responsible buying, societal marketing and environmental or green marketing. The environmental or green marketing ensures that the organization is fulfilling their responsibilities towards the protection of the environment; it includes using environment-friendly material and process for manufacturing. The societal marketing model focuses on customers’ demands, company’s requirements, and society’s interest while marketing a product; the corporations should not market a product or services which are against the interest of people, firm or society (Lindgreen and Swaen, 2010).

Enlightened marketing provides that a corporations marketing policy should support the long-term performance of marketing system. This concept consists of five principles, i.e., innovative marketing, consumer-oriented marketing, value marketing, societal marketing and sense of mission marketing. The innovative marketing requires the company to improve their products; the consumer-oriented marketing concentres on the demand of customers. The value marketing focus on enhancing the value of products and sense of mission suggests that corporations should include a broader view of social policies (Carroll and Shabana, 2010).

There are numerous examples of socially responsible corporations which have implemented an efficient, ethical model into their organizational structure such as Twillory, Rainbow Light, Juntos, Gift of Happiness, Out of Africa, Coyuchi and many others. In Sri Lanka, the popularity of SRM has grown between organisations in past few years. Many corporations, such as Commercial Bank Sri Lanka and Diesel & Motor Engineering PLC, have successfully implemented SRM policies to ensure they fulfill their corporate duties. Marketing is a primary activity of an organisation and popularity of the internet, and social media platforms have increased the marketing opportunities for companies. Many firms misuse marketing to mislead the public into buy or using their products which can be detrimental to their health. Therefore, the SRM principles ensure that corporation are not misusing marketing opportunities, and they are fulfilling their moral duties.

Types of Socially Responsible Marketing

To implement an efficient socially responsible business model, companies are required to continually monitor and alter their policies as per the market requirements (Hammann, Habisch, and Pechlaner, 2009). In Sri Lanka, the companies are taking advantage of growing internet users and implementing various SRM models such as email marketing, Facebook marketing, SMS marketing and other types of web advertisements (Tsai, Chou and Hsu, 2009). Cinnamon Air, a Sri Lankan domestic airline, is a good example of effective SRM model; the company ethically advertise their services and uses Facebook and Email marketing model to present them uniquely which motivates customers to use their services and provide them positive feedback (Cinnamon Air, 2017). Other good examples are Dialog Axiata, Sampath Bank, and Mobitel which has implemented Facebook marketing SRM model.

As per Ross, Stutts, and Patterson (2011), the cause-related marketing is a mutual collaboration between a company and non-profit organization to promote the former sales of products and latter cause. The term was first introduced by the American Express in 1983 to rise donating for the Statue of Liberty's restoration. Every time a member uses a card, American express pays one cent as a donation (Demetriou, Papasolomou and Vrontis, 2010). The non-profits organization can significantly benefit from the implementation of cause-related marketing. The partnership must be established after proper evaluation of the terms as it can pose a risk for both parties reputation. For example, a worthy cause cannot get the adequate support of public if it they see it as a crass commercialism.

There are several good examples of effective implementation of cause-related marketing such as CauseGood and Selfish Giving. To find cause-related marketing opportunities, the non-profit corporations should expand their research beyond the traditional method of corporate giving decision such as corporate fundamentals or giving programs. The companies should try to contact the marketing department of well-reputed corporations to make collaboration with them in cause-related marketing. The large companies may partner with the smaller or less known charities based on the worthy cause. But, mostly the companies prefer to collaborate with large non-profit enterprises or foundations simply because it provides them more exposure in the market (Vanhamme et al., 2012).

According to Lee and Kotler (2011), the social marketing primarily focuses on “social good”, on the other hand, the “commercial marketing” concentrate on financial goals. Although the commercial marketing is focused on raising revenue, it can also contribute to the achievement of a social cause. The social marketing is an approach which is used in the development of various activities which are aimed at modifying or marinating the behavior of peoples to provide benefit to the society and individuals. According to Kotler and Keller (2015, p.638), it combines the idea of commercial marketing and social science; the social marketing can be a considerably cost-effective tool to raise donation and archive organizational goals at the same time. A company can implement social marketing approach by analyzing their target audience and conducting a market research. The social marketing encourages people to participate in a good cause without performing any other specific actions.

Benefits and Limitations of Socially Responsible Marketing

There are a significant number of cases of socially corporate marketing in Sri Lanka. The country is beginning to practice the principles of social responsibility by overall progress based on strategic partnerships. It is a new holistic sense of approach adopted by the firms which include ethical competitiveness, accountability, and moral purpose (Wittman and Caron, 2009). Traditionally in Sri Lanka, the role of businesses was to generate high revenue and maximise the value of shareholders. Modern corporations are considering the importance of “responsibilities” of a company towards the development of the society and individuals. The corporate social responsibility policies are adopted by firms which affect human resources, legal practices, marketing and branding functions and communication department. The separation between business and development is artificial, and the line has been blurred in previous few decades. The private sectors are largely implementing the responsible policies because they understand the role in the growth of corporations and the country as a whole (Shoji et al., 2012).

Many Sri Lankan organizations have effectively implemented socially responsible marketing model into their business structure such as John Keells, Hayleys, and Hemas. These corporations analyze their duties as corporate citizens and strategically perform their business functions to ensure that they contribute to the development of local communities and the country (Munasinghe and Malkumari, 2012). John Keells Holdings PLC started its operations in the 1870s, and it has become Sri Lanka’s largest listed conglomerate. The SRM activities of John Keells focus on environmental, economic and social performance; the company has implemented Global Reporting Initiative (GRI-G3) framework that engages with various stakeholders and seeks to meaningfully enrich their lives (Keells, 2017). The John Keells Foundation (JFK) and Plasticcycle Social Entrepreneurship are the projects initiated by the company to fulfill their corporate duties. The marketing initiatives of the company focus on providing a true picture of the corporation’s product and services and its CSR vision is to empower the country for tomorrow. The corporation has successfully implemented social media marketing strategy into their organization structure which they use to ethically market their products and interact with their customers to solve their queries (LBO, 2015). The company also has committed that one percent of their earning will be contributed to the welfare and development of local communities and the environment.

Hayleys PLC is another Sri Lankan conglomerate organization which was founded in 1878 by Charles P. Hayley; the company is one of the best Sri Lankan corporate citizens since it has strongly integrated corporate duties into their business model. The corporation operates in 16 countries, and it has more than 28,000 employees; the company maintain diversity into their employees and support various environmental causes to ensure that they have a positive impact on the country (Hayleys, 2017). The corporation has hired more than 40 marketing professionals who ensure that firm fulfils its social responsibilities in marketing. Hemas Holding PLC is another good example; it is a Sri Lankan conglomerate which was founded in 1948. The firm implements social responsibility principles into their marketing strategy to provide necessary information to people through advertisements such as healthcare benefits, plans, medical requirements and others (Hemas, 2017). The company uses marketing policies to expand “Hemas Outreach Foundation” initiative in Sri Lanka which focuses on environment, child development, and healthcare benefits (Peattie and Peattie, 2009).

Examples of Socially Responsible Marketing

According to Kotler and Keller (2015, p.372), following recommendation should be implemented by the corporations and foundations to achieve higher results in social marketing:

  • John Keells uses social media sites to engage with customers ethically, but the company should take advantage of their large position to collaborate with other reputable charities for marketing; it will assist in improving the brand image of the firm along with its sales. But, the corporation should not misuse their position to increases profit; instead, the focus should be on fulfilling social responsibilities.
  • Hemas has successfully implemented SRM model, but they are required to establish a specific team for marketing which conducts market research and find potential associations to establish cause-related marketing; it will reduce the time taken in achieving social responsibilities.
  • Hayleys and Hemas should also contribute their earning to Sri Lanka’s local communities’ development, like John Keells. It will increase the reputation of corporations, and they can use it into their marketing strategy to fulfill their social responsibilities.

Conclusion

In conclusion, the social responsibility marketing focuses on fulfilling the corporations’ role regarding the ethical duties towards the individuals and society. The characteristics of social marketing include safety, honesty, transparency, ethical pricing and respecting customers’ privacy. In Sri Lanka, there are multiple corporations and foundation which has established socially responsible marketing model into their business structure to fulfill their obligation towards society such as John Keells Groups, Chevron lubricants, and Child Empowerment international. With the advancement of technology, market trend and government regulation, the role of social responsibility marketing will also increase in the Sri Lanka's market.

References

Aguinis, H. and Glavas, A., 2012. What we know and don’t know about corporate social responsibility: A review and research agenda. Journal of management, 38(4), pp.932-968.

Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction. Pearson Education.

Bhattacharya, C.B., Korschun, D. and Sen, S., 2009. Strengthening stakeholder–company relationships through mutually beneficial corporate social responsibility initiatives. Journal of Business ethics, 85, pp.257-272.

Bhattacharya, C.B., Sen, S. and Korschun, D., 2008. Using corporate social responsibility to win the war for talent.

Carroll, A.B. and Shabana, K.M., 2010. The business case for corporate social responsibility: A review of concepts, research and practice. International journal of management reviews, 12(1), pp.85-105.

Cinnamon Air., 2017. Customer Review. [Online] Cinnamon Air. Available at: https://www.cinnamonair.com/customer-reviews.html

Demetriou, M., Papasolomou, I. and Vrontis, D., 2010. Cause-related marketing: Building the corporate image while supporting worthwhile causes. Journal of Brand Management, 17(4), pp.266-278.

Hammann, E.M., Habisch, A. and Pechlaner, H., 2009. Values that create value: socially responsible business practices in SMEs–empirical evidence from German companies. Business Ethics: A European Review, 18(1), pp.37-51.

Hayleys., 2017. Sustainability. [Online] Hayleys. Available at: https://www.hayleys.com/sustainability/

Hemas., 2017. Sustainability. [Online] Hemas. Available at: https://www.hemas.com/social-responsibility

Indounas, K., 2008. The relationship between pricing and ethics in two industrial service industries. Journal of Business & Industrial Marketing, 23(3), pp.161-169.

Jahdi, K.S. and Acikdilli, G., 2009. Marketing communications and corporate social responsibility (CSR): marriage of convenience or shotgun wedding?. Journal of Business Ethics, 88(1), pp.103-113.

Keells., 2017. Sustainability, CSR & Social Entrepreneurship.[Online] Keells. Available at https://www.keells.com/sustainability-and-csr-social-entrepreneurship

Kotler, P. t. and Keller, K.L., 2015. Marketing Management. 15th Ed. Perarson India Education Services Pvt. Ltd.

LBO., 2015. John Keells Hotels says social media and online marketing will boost brand presence. [Online] LBO. Available at: https://www.lankabusinessonline.com/john-keells-hotels-says-social-media-and-online-marketing-will-help-boost-brand-presence/

Lee, N.R. and Kotler, P., 2011. Social marketing: Influencing behaviors for good. Sage.

Lindgreen, A. and Swaen, V., 2010. Corporate social responsibility. International Journal of Management Reviews, 12(1), pp.1-7.

Munasinghe, M.A.T.K. and Malkumari, A.P., 2012. Corporate social responsibility in small and medium enterprises (SME) in Sri Lanka. Journal of Emerging Trends in Economics and Management Sciences, 3(2), p.168.

Peattie, K. and Peattie, S., 2009. Social marketing: A pathway to consumption reduction?. Journal of Business Research, 62(2), pp.260-268.

Ross III, J.K., Stutts, M.A. and Patterson, L., 2011. Tactical considerations for the effective use of cause-related marketing. Journal of Applied Business Research (JABR), 7(2), pp.58-65.

Shoji, M., Aoyagi, K., Kasahara, R., Sawada, Y. and Ueyama, M., 2012. Social capital formation and credit access: Evidence from Sri Lanka. World Development, 40(12), pp.2522-2536.

Tsai, W.H., Chou, W.C. and Hsu, W., 2009. The sustainability balanced scorecard as a framework for selecting socially responsible investment: an effective MCDM model. Journal of the Operational Research Society, 60(10), pp.1396-1410.

Udayasankar, K., 2008. Corporate social responsibility and firm size. Journal of business ethics, 83(2), pp.167-175.

Vanhamme, J., Lindgreen, A., Reast, J. and Van Popering, N., 2012. To do well by doing good: Improving corporate image through cause-related marketing. Journal of business ethics, 109(3), pp.259-274.

Wittman, H.K. and Caron, C., 2009. Carbon offsets and inequality: social costs and co-benefits in Guatemala and Sri Lanka. Society and Natural Resources, 22(8), pp.710-726.

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