Sustainability as a leverage of marketing

A breakthrough, encouraging, but also concerning environmental and governance trend has emerged in the new era. Since 2005 multinational corporations – driven by an increased consumer power – have entered a challenging competition to become what they call, “global sustainability champions”[1]. Thus, McDonald’s, Nestlé and Nike started to redefine sustainability as a marketing leverage, adopting it as the key-point to follow in the operation and as a principle to embrace in the several business divisions.

How did they reach this conclusion?

We need to go backwards. We need to figure out how sustainability is one of the main points that caused a branding redesign. A brand, was defined by what it creates, by its characteristics or by the value raised[2]. Volvo is safety. Apple is knowledge. Walmart is cost-saving. The more famous the brand is, the harder it is to govern and the higher its vulnerability. Still, the sustainability here was not even taken into consideration.     Nevertheless, due to an increasing consumer research of environmentally responsible products, the global companies started to follow these practices. So that, over the year, sustainability has become one of the most important leverage of marketing. Just think that a fruit-juice related research conducted in July 2013 shows that out of 512 fruit juices examined, more than one-quarter have labels signaling sustainable aspects[3].

Although consumers’ pressure is considerably important, to explain why those companies use sustainability as a way to create value for their targeted customers, it is not thorough. Another driving factor is the research for a bottom line efficiency. Typically, it is the first sustainability principle undertaken by companies. It is often the easiest to demonstrate as a return on investment and as a way to reach greater operating revenue. It is gaining value in the last few years, companies are particularly affected by a need of low-cost and high-volume level and evaluate positively every research meant for eco-efficiencies results. For instance, Marks & Spencer’s, in their effort to decrease the use of packaging, combustible and to increase recycling and energy optimization, have been able to save over £70 million in their production cost.                                                  The concept of sustainability as a marketing leverage is also exploited as an opportunity to access and conquer new and unexploited markets. Over the next few years another billion consumers are predicted to enter the middleclass, 60% of this will come from developing economies like China, Brazil and India[4]. Recalling that a 2008 consumer-based research proved that consumers doubled their spending on sustainability products, we can undoubtedly claim that this will be a desired sector[5].

All in all, brand companies are achieving increasing corporate sustainability results thanks to consumer’s influence and to eco-efficiency savings. These gains, however, do not mean that those companies are completely sustainable but that they have undertaken the correct approach. Thus, right now, they still remain an “engine of increased consumerism”.

Davide Baino

[1] The comparative advantage theory of competition, Hunt, S., & Morgan, R. M. 1995, Journal of Marketing, Pages 59, 1−15

[2] Ethical Marketing and the New Consumer, Arnold, C., 2009, John Wiley & Sons, Chichester, West Sussex

[3] Sustainability as Sales Argument in the Fruit Juice Industry? An Analysis of On-Product Communication, 2014, [Online], Available: http://centmapress.ilb.uni-bonn.de/ojs/index.php/fsd/article/view/534/424

[4] The New Global Middle Class: A Cross-over from West to East. Wolfensohn Center for Development, Brooking, Washington, DC. 
Kharas & Gertz, 2010

[5] Those earth-friendly products? Turns out they’re profit-friendly, Bhanoo, S.N., 2010, as well. New York Times, 12 June, B3

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