When you study marketing you learn about some companies that also have goals to ensure that they adopt a corporate social responsibility position. These types of companies focus on both the short term and long term effects of their marketing process and seek to have corporate social responsibility and sustainability as an important priority in their business dealings.
Societal marketing concept
In introductory marketing chapters, textbooks often differentiate between the marketing concept and the societal marketing concept. Firms that have a significant belief in corporate social responsibility tend to be practicing the societal marketing concept. Whereas firms that begrudgingly meet their obligations in terms of environmental and/or charitable work, are still probably practicing the marketing concept.
The difference between the two types of concepts is whether the organization involved really believes that a contribution to society – that is, improving overall society through their existence – is an equal goal to their own profit and growth intention and is equal to meeting the needs of customers.
Why be socially responsible as a business?
There are numerous factors that would influence of company to willingly be engaged in socially responsible activities, as well as legislative requirements.
Some of the more common forces to impact a company’s decision to engage in socially responsible actions are the following:
- government legislation,
- customers’ expectations of firms in that industry,
- the extent of costs involved, the type of industry in which they operate,
- potential for a competitive advantage by brand image,
- strength of lobby groups, and
- possible related media coverage (either positive or negative).
It is also a reflection of the overall corporate culture and values of the organization, which is typically derived from top management personnel and their personal values.
Please note that these factors are discussed in more detail in the article on factors driving corporate social responsibility.
Corporate social responsibility and top-level strategy
As we know as students and practitioners of marketing, many organizations will have a strategic plan that outlines their actions relative to customers, employees and competitors. It is also common that in a strategic plan a company also will describe its interaction in the communities and environments in which it operates.
In the past, the environmental consideration was primarily to identify potential threats (by their SWOT analysis). However, it is becoming more common to consider how the organization can benefit society and the broader environment. Therefore, more proactive firms are integrating socially responsible goals into their top-level strategic plan.
Definition of corporate social responsibility
Philip Kotler proposed the following definition for corporate social responsibility: “Raising the level of socially responsible marketing calls for making a three-pronged attack that relies on proper legal, ethical, and social responsibility behavior”.
The legal behavior mentioned by Kotler is simply observing, following and respecting all the relevant laws for the activity of a certain organization. For example, the sales process must not mislead customers into buying certain products or services nor should it disparage competitors on false arguments. The legal behavior of an organization usually also addresses other issues such as corporate espionage or bribery.
As far as the ethical behavior is concerned, some companies have developed a written code of ethics and ensure that their employees follow those ethical guidelines in every activity they engage in.
To more successfully integrate this into the long-term operations of an organization, a company should seek to build a tradition of ethical behavior over time.
In terms of marketing issues, inaccurate labeling or deceptive advertising would be clearly unethical, but there is still debate on whether advertising to children constitutes ethical marketing behavior.
Sustainability is another concept frequently associated with corporate social responsibility. The ability to meet consumer’s needs without harming future generations, sustainability is now considered as a priority for many companies. It is becoming apparent in the business community that sustainability needs to be more prominent, particularly as environmental concerns of lobby groups become stronger and more engaged.
Reinforcing a sense of social responsibility may lead to raising a company’s or a brand’s credibility and respect. It may be possible for these organizations, who actively demonstrate strong social responsibility behavior to build consumer preference and loyalty, thus differentiating themselves from their competitors. Some companies have attempted to connect their brand quite strongly to socially responsible activities. One example here is a financial institution in Australia who provides discounted home loans to customers who have environmentally friendly features in their homes.