Today many companies are working towards integrating the principles of sustainability into their business models. Big corporations especially are investing considerable resources for energy saving, resource efficiency, climate change adaptation and mitigation, developing eco-friendly products and diversity & gender equality programs to achieve long-term growth and generate added value for their businesses and stakeholders. Nevertheless, they are quite uncertain about the quantifiable value created out of investing in sustainability.
There is a rising pressure on companies, mainly stemmed from the stakeholders whose awareness and sensitivity on sustainability have been growing, to advance their products/services in line with sustainability expectations. The pressure magnifies with the realization that sustainability performance and track records of companies started to be a determining factor in purchasing behavior both in B2B and B2C. Especially in B2C, consumers’ purchase trend towards sustainable brands directly depends on how business contributes to improving their and future generation’s well-being.
In order to integrate sustainability into business models, strategy and tactics the companies should incorporate five crucial factors with their stakeholders: cogitation, cocreation, collaboration, communication and commitment. All these factors affect the crucial marketing decision-making processes including purchasing, which are highly dependent on perceived value derived from products or services.
Marketing and sustainability might seem as an oxymoron because marketing is the “scapegoat” that impels consumption, which in excessive amounts leads to exhaustion of resources, which is exactly the main point of concern according to the sustainability approach. Moreover, production of specific goods and services that marketing functions focus on might have negative impacts on the environment. However, when marketing starts working towards sustainability, this cooperation creates an opportunity for organizations to create competitive advantage and business value.
The entire process of marketing sustainability starts from insight management and market research to identify needs of all stakeholders until loyalty building. Today’s stakeholders not only expect direct utility from the organizations, but they also want to improve the well-being of the global community. However, many organizations are still skeptical about how significant sustainability marketing is for the industrialized businesses (B2B) and customers (B2C). Mainstream view suggests that customers mainly care about price, delivery and functionality of the product or service. However, digital and eco-friendly era marketers argue that sustainability marketing should be an important part of a company’s strategy because consumers and corporations will always have a tendency to pick the brands they trust, that are different from the rest, are innovative, appeal to emotions while focusing on well-being and life style. For that reason, marketing strategies based on sustainability practices can help organizations in gaining maximum business value from their development efforts.
With the help of organization wide KPI management, companies identify that the impact of sustainable marketing practices is mainly on brand equity and consumer behavior. The perception and reputation researchers have found out that consumers have high regards for the companies involved in sustainable marketing practices especially in product development in fast moving markets, and similarly the companies with improved environmental, social and governance (ESG) performance receive better positioning relative to competitors. As a matter of fact, for researchers it is tricky to show any tangible impact of sustainability practices on B2B purchasing decisions. In many markets, consumers are aware of the themes like societal marketing, sustainable marketing and eco-labelling but marketing sector professionals are quite unsure whether these practices highly influence their target markets’ purchasing decisions.
Sustainability practices do not only mean being politically correct and improve business through the enhancement of company image and trust, but also brings cost savings, efficiency and improved organizational performance.
The mentioned gains through sustainability is only possible with innovation. Innovation is what operationalizes sustainability and two concepts have two things in common: high priority in the corporate agenda and vagueness. They are difficult to define and even more difficult to take concrete actions and measure towards. However, when they are successfully defined and measured, the results are fulfilling; especially innovation in production process, packaging, distribution and promotion with regards to sustainability reduces cost and increases efficiency.
Innovation is the key supporter of successful sustainability marketing practices. Yet, without an effective communication plan, it will almost be impossible to make target markets aware of sustainability solutions that have been developed, how they will be integrated with their lifestyles and meet their needs. Sustainability communication plan is a policy-driven approach to provide stakeholders the necessary information about sustainability practices of the organization. Briefly speaking, communication management is about keeping all stakeholders in the loop. But at first, organizations must develop a strategy for delivering right information to right target audience. During that process, organizations should decide which media channels would be the most effective ones to bring sustainability policy to target audiences, in other words stakeholders.
To sum up, the world is entering into an era where businesses diverge from sole profit-driven behavior to conscious actions and inclusive capitalism. In this context, sustainability is becoming a concept of increasing popularity. Companies are expected to show continual commitment towards sustainability practices, not only to gain public trust and commitment from their consumers but also to achieve cost savings and create value through improving their production processes.