Source: Image of recycling icon, factory, box, hydroelectric dam, running shoes, plus sign, report, curved arrow, school, man with paper, images by Video Scribe, License held by Jeff Carroll; Image of coal plant, Public Domain, http://bit.ly/1vwwnmM.
Hi. I'm Jeff, and in this lesson we'll learn about marketing the ethical environment and how a company can perform a social audit. So let's get started.
First, let's talk about a few of the ways that a company can respond to the ethical environment. A company can use green marketing to sell products. This is a marketing focus that puts environmental concerns as a primary in making decisions. This is also a form of product differentiation where the product is considered preferable by some customers because it is environmentally friendly.
Numerous parts of the product development process can be green, such as using environmentally conscious production methods, sustainable or biodegradable packaging, or providing a product that assists others in improving the environment.
Tom's Shoes is a good example of green marketing. For each pair of shoes that they sell, they promise to donate one additional pair to a child in need. This has made Tom's a very successful company as well as garnering them some considerable press. This demonstrates how being a green company and using it in your marketing can offer a competitive advantage.
But not all companies are ethical about green marketing. Some do something called, green washing where the company doesn't make a product or service better, but instead just markets the product as if they do. Clean coal might be an example of green washing.
Yes, clean coal does help lower the emissions of carbon dioxide from the burning of coal, but the burning of coal is still harmful to the environment. So it shouldn't be considered a green product, yet it is often marketed as if it is.
There are also gray areas where products are truthfully marketed as being healthy or good for the environment, but the product has not actually changed. Companies do this to take advantage of fads or trends in marketing.
For example, water that is marketed as fat-free or products made with rice, such as Rice Krispies cereal being marketed as gluten free when they have always been gluten free.
Now, when an organization wants to implement an environmentally conscious program it should first perform a social audit. This is a precise review method for an organization to analyze how it is responding to social responsibility with its stakeholders. This is similar to a financial audit where the impact of the change is evaluated and the advantages and the disadvantages of the change are described.
For example, if a company wants to help local communities by giving back 5% of all purchases made to local schools, the audit should contain information on the impact of the company's profits, an estimate of the amounts that will be donated, any benefits gained from the donations for the company and for the local community, and any negative impacts the change might have.
This gives the stakeholders a chance to review the details first, which makes them more likely to become champions of the change if they agree with the cause.
OK, good work. In this lesson we discussed how companies can market in the ethical environment, including green marketing and green washing. We also learned why a company who wishes to become environmentally conscious should first perform a social audit.
Thanks for your time and have a great day.