Abstract
Corporate advertising campaigns impacts greatly public opinion especially on the need of environmental responsibility. The advertising campaigns are used as means of reaching larger population. The study analyses issues on consumer protection and the benefits companies receive in considering stakeholders while marketing their brand products.
The introduction provides general overview on green marketing and its impacts on consumers. Various opinions related to corporate social responsibility are detailed within the literature review followed by IAG case presentation and discussion then finally conclusion.
Introduction
Green marketing consists of various activities focused on satisfying human needs with ultimate reduced negative impacts on the society. This ensures that the interest of all players, organization and consumers, are well protected. The buyer and the seller should mutually benefit from the voluntary exchange taking place within the market place.
Consumers all over the world are generally becoming concerned about environmental conditions especially the advertisements on green-washing. Green-washing is a term used to refer to the various advertising and public relations used in misrepresenting organizations and products based on sustainability and environmental benefits.
Research done in Australia in early 1990s, revealed that 85% of the studied sample believed in their responsibility towards the environment.
Over 80% of the sample also agreed on the fact that they changed their purchasing habits owing to environmental reasons. Hence, the conclusion that environmentally friendly firms involved in marketing, have competitive advantage over those marketing non-environmentally responsible goods (McDonnell and Bartlett, 2009, pp. 63-70).
It is important for firms to realize their role within the wider society, hence conduct their activities in an environmentally responsible manner. This normally arises from the belief that profit related objectives should be achieved alongside environmental objectives.
Governments always strive to protect consumers from marketing related activities through creation of regulations relating to environmental marketing. The attempts made by governments to protect consumers from various exploitations provide consumers with opportunity of making informed decisions (McDonnell and Bartlett, 2009, pp. 63-70).
Critical review of literature
Corporate social responsibility together with economic and environmental responsibility has been advocated within the Australian society from 1950s. The practices have grown rapidly within the 21st century (de Bakker et al, 2005). Environmental and social demands have become major concern to the both public and private domain, with environmental demands becoming increasingly highlighted in most publications.
There are pronounced commitments by most governments around the world to protect environment through such agreements as Kyoto Protocol and IPCC (Intergovernmental Panel on Climate Change). Social responsibility of business entity incorporates various domains such as economic, legal, ethical as well as uncompromised standard expectations that consumers have over organizations at particular time frame.
The actions by various business entities should foster some common good to the society beyond personal interest of the firm based on the required laws (McWilliams and Siegel, 2001, p. 117). All business organizations are actually obligated to the good of their social and natural environment.
Classical requirements of organization’s social responsibilities are centred on making of profits and the relationship between the organization and range of stakeholders. Organizations usually affect various groups within the social environment as a consequence of their activities. Hence the focus should extend beyond economic gains and also encompass social, environmental and governance dimensions.
Most organizations utilize the media when conveying important information on innovative practices they seek to legitimize. The media provides the channel through which cognitive legitimacy is built based on business organizational activities. The same channel can be used in rebuilding organizational brand image whenever in question.
Business organizations normally use impression and crisis management practices to sensitize consumers on their commitment towards environmentally friendly activities. In this case study, the intended examination is geared towards rebuilding legitimacy by individual organizations.
Organization’s image can easily be built through media activities where they seek to influence public reactions towards their products, services and other related actions. On the other hand, media can as well be used by organizations to criticize others’ practices in the process of promoting their own.
The effects of public reactions towards company’s brand image usually have long-term effects. Legitimacy within the marketplace is socially constructed in such a manner that the various practices provide the required blueprint on ways of approaching social interactions (McDonnell and Bartlett, 2009, pp. 63-70).
Presentation of IAG case
Organizations strive to promote their agendas to the public based on climate change. There has been lots of politics surrounding global environmental issues leading to emergence of various interest groups. Such groups have tried to influence public opinions in a rather superstitious ways. However, formidable contributions have been associated with the global insurance industry.
The industry has been known for its active participation in social responsibilities. One of the negative implications facing the company is the issue of running bankrupt owing to weather related disasters.
Most insurance companies are in dilemma concerning future premium charges due to lack of blueprint from past climatic patterns. Insurance industry influences issues on climatic changes by insuring coal-fired power plants as well as wind farms, at the same time it promotes rates capable of facilitating emissions from various companies.
The Australian Insurance Group (IAG) stands as one of the insurance groups with the belief that frequency on occurrences of natural disasters are set to occur due to the rate of global warming. Survival of most insurance firms revolves around their ability to successfully tackle issues on global warming with the predictions that the cost of carbon will ultimately demand business expenses in the near future.
However, IAG has developed formidable strategies capable of dealing with climatic challenges. Most of the strategies are market oriented with the ability to differentiate company’s brand from others based on their focus on sustainability and environmental responsibility.
Other strategies addresses issues on carbon neutrality, climate help, discount on fuel-efficient vehicles, marketing campaigns on carbonators amongst others (McDonnell and Bartlett, 2009, pp. 63-70).
IAG had plans of steering the group towards becoming carbon neutral by the year 2012. This was meant at lowering emissions by the use of carbon credits from various sources. The level of carbon emissions from the Group’s business premises in Australia decreased by approximately 18%.
The adjustments included use of energy efficient lighting system, timers and adjustments on air conditioning as well as occupying an energy efficient building. The company also used, Climate Help tool, which is an online tool used by customers in the process of offsetting greenhouse emissions associated with car use.
Consumers considered the process very convenient and inexpensive means of mitigating negative environmental change. The website provides information on climate change and at the same time give advice on the importance of utilizing other modes of transport and fuel-efficient cars.
IAG developed an integrated multimedia campaign out of the website resulting into tremendous increase in the number of people using carbon cards (McDonnell and Bartlett, 2009, pp. 63-70).
Then there was the use of GreenSafe car profiler which assisted in the examination of all motor vehicles imported into the Australian industry based on safety and environmental viability. The process makes comparison between vehicle models based on their level of emissions as well as general costs. IAG Company resorted into rewarding consumers with fuel-efficient cars hence saving on insurance costs.
In another aspect, IAG plays an important role in influencing climatic reporting mechanisms in Australia. Also there is the aspect of carbonators marketing campaign by NRMA Queensland where offsetting was done for each new policy.
The sale of carbonators used the initial approach of creativity before inducing price approach. This helped in differentiating the company within the market making the company experience increased policy renewals, more new customers and reduced churn (McDonnell and Bartlett, 2009, pp. 63-70).
Approach towards stakeholders
Corporate social responsibility within the company is clearly associated with other businesses within the market. There are possibilities of the business to be in contact and conflict with other key stakeholders based on responsible business goals, local needs, regional and global needs as well as different cultures. The concept of stakeholder engagement and communication entails marriage of determined leadership characteristics.
This is since the stakeholders seem to be in competition for the same consumer base, employees, environment, society as well as suppliers.
It is easier to approach stakeholders’ issues by use of relationship models such as inside-out approach where leaders manage relationships by building CSR networks across boundaries. Information is shared with stakeholders after internal decisions are made and in the process of implementation.
Fig 1: Broadcast messages supported by Sales Support
Ethics Pyramid
This pyramid is instrumental in incorporating ethical relations into the entire structure of public relations. It is paramount to consider ethical content and outcome of any campaign tactic.
The use of Potter Box in this case would help in focusing the company’s attention towards values and loyalties capable of making accessed ethical decision. The three-step system would ensure that all the appropriate means, intent and ends are considered (Baker and Martinson, 2001).
Fig 2; Adaptation for Ethics
Social imagination incorporates the ability of the company to understand the community’s situation from different dimensions and perspectives. Development of social imagination requires awareness of various social dilemmas and active processes essential for interpreting environment as well as understanding the organization’s role within the community (Baker, 2002).
Discussion of the case
In the process using marketing as means of promoting green-washing, consumers need to be reassured of the fact that the advertisements are both business and environmentally oriented. The firm need to ensure that indeed their activities are genuine and not misleading to consumers (Martinson, 2000). At the same time the activities should follow all the regulations safeguarding environmental marketing.
The claims should clearly detail environmental characteristics as well as state the various benefits and processes on how they are achieved. There is also need for the company to ensure that the various differences are justified besides ensuring that all set-backs are dealt with including the appropriate use of images and pictures.
The process of modifying the products at times meet increased consumer perceptions which at times are never genuine, hence bowing too much to consumer pressure at times may mislead. Good example is in the use of plastic coated paper instead of clam shells which are scientifically approved to be more environmentally friendly (Marsh, 2001).
Probability is high on the fact that those practices currently approved to be environmentally friendly might be harmful in the future years. Good example is in aerosol industry shifting from using CFCs to HFCs of which is currently considered to be part greenhouse gas hence harmful to the environment.
Such mistakes are provided for due to the current limited scientific knowledge making firms to be uncertain on the future corrective measures that may be environmentally responsible.
However, some firms have decided to become socially responsible in a silent manner without any publicity due to uncertainties which may arise in future. This can as well protect the firms from future negative consumer perceptions in case their corrective measures are proved otherwise by consumers (McDonnell and Bartlett, 2009, pp. 63-70).
Conclusion
Most organizations are currently scrambling to be recognized as environmentally responsible. They tend to have competing principles and agendas targeting individual success and at the same time considering various environmental impacts within the society. Insurance has got basic concern in addressing environmental issues since most of the disasters are normally associated with natural environment.
The success of most companies revolves around the appropriate decisions made by the insurance industry. The case analysed major Australian insurance company IAG, its practices and key marketing strategies. The company is portrayed as having great concern towards the environment since they have adopted various practices aimed at restoration of sanity within the environment.
Their marketing strategies are also objective in such a way that they influence behavioural change towards environment amongst consumers. IAG uses its position to influence public opinion necessary for mitigating negative environmental impacts. Their practices are found to be sincere and not misleading to entire consumers within the marketplace.
Proposal for better management
Stakeholders are known to provide organizations with range of resources such as customers, employees and capital amongst other benefits necessary for conducting businesses. These resources create some link between stakeholders and organizations hence making organizations to be responsible for their social and legitimate actions towards consumers.
The shift in thinking from financial perspective demands that business organizations consider the impact of their activities on wide range of stakeholders. Currently, there is more pressing demand from consumers on the extent to which companies deal with environmental matters.
This has made organizations to play vital role in shaping public opinion and environmental policies by complying with social and stakeholder demands hence legitimizing themselves to acceptable organizational and societal practices (McDonnell and Bartlett, 2009, pp. 63-70; Baker, 1997).
All forms of governmental regulations are meant to grant consumers opportunity to make better environmental decisions. However, difficulties arise especially in the point of establishing policies capable of addressing all areas of concern within the environment. Good example can be drawn from the set of regulations safeguarding environmental marketing which addresses only narrow sets of issues.
Meaning that in the process of modifying consumer behaviours the government requires to establish totally different set of laws. This may result into breach of many set regulations since there is no central organization concerned with checking and controlling regulations used in the marketplace (McDonnell and Bartlett, 2009, pp. 63-70).
Reference list
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Baker, S 2002, The theoretical ground for public relations practice and ethics: A Koehnian analysis, Journal of Business Ethics, vol. 35, no.3, pp.191–205.
Baker, S., & Martinson, D. L 2001,The TARES test: Five principles for ethical Persuasion, Journal of Mass Media Ethics vol. 3 no.16, pp. 148–175.
De Bakker, F.G.A, Groenewegen, P & Den Hond, F 2005, A bibliometric analysis of 30 years of research and theory on corporate social responsibility and corporate social performance, Business and Society, vol. 3 no. 44, pp. 283-317.
Marsh, C. W 2001, Public relations ethics: Contrasting models from the rhetorics of Plato, Aristotle, and Isocrates, Journal of Mass Media Ethics, Vol. 3 no.16, pp. 78–98.
Martinson, D. L 2000, Ethical decision making in public relations: What would Aristotle say? Public Relations Quarterly, vol. 3 no. 45, pp.18–21
McDonnell, J & Bartlett, J 2009, Marketing to change Public Opinion on Climate Change: A case Study, International Journal of Climate change, vol. 1 no. 3, pp. 63-70
McWilliams, A & Siegel, D 2001, Corporate social responsibility: A theory of the firm perspective, Academy of Management Review, vol. 1 no. 26, pp.117-127.