Chap. 7: Customer Solutions Flashcards
Marketing Myopia
Marketing Myopia (Nearsightedness)
- Main occupation with products (or services) instead of customer solutions
- Paying more attention to a specific technology (e.g. railroads, 18th century) instead of the benefits it provides to the customer (transportation/mobility)
- 4 Ps Marketing Mix à Focussing more on products and purchases
–> Sustainability Marketing focuses on problems of consumers & how to solve them
Customer (Pre-) Purchase Solutions
- Sustainable products and services
- 6 characteristics
Sustainable products and services
- Offerings that satisfy consumer needs and significantly improve the social and environmental performance along the whole life cycle in comparison to conventional offers
The definition has the following 6 characteristics:
- Customer Satisfaction: If product doesn‘t satisfy customer needs, it will not survive on the market on the long run
- Dual focus: Sustainable products not only focus on the ecological but also on the social aspects
- Life cycle orientation: Scope: Cradle to grave (extraction of raw material, transportation, manufacturing, distribution, use and post-use)
- Significant improvements: Need worthwhile contribution to tackle the socio-ecological problems on a global level or provide measurable improvements in socio-ecological product performance (LCA)
- Continuous improvement: Sustainable products have to be constantly improved regarding consumer, social and environmental performance
- Competing offers: The offerings of competitors are yardsticks for improvements with regard to overall (customer, environmental, social) performance
(Pre-) Purchase Solutions
- Generally
- Some offerings
- For people that focus on “the world behind the product“, how it was produced and processed
- They care about the natural environment and human beings involved in the production process
Some examples of sustainable offerings:
–Organic food products: No chemical fertilizers, pesticides, GMOs
–MSC-labelled fish: Against overfishing (“follow fish“-option)
–FSC-labelled products: No overharvesting of forests
(Pre-) Purchase Solutions
- Cleaner Production
- E.g.
Cleaner production:
- Approach that minimizes emissions and waste. It involves analyzing material and energy flows to pinpoint ways to improve the resource and energy efficiency of operational processes
Aim: Zero emission, reuse, recycle, recover
E.g.
ISO 14001 (international environmental management standard)
–> requirements for establishing an environmental policy, determining environmental aspects and impacts, measurable targets
Customer Use Solutions
- Generally
- Two examples
–> (E)HS Products
- Customers expect products to be safe when using them –> E.g. No residuals of pesticides in food, plastic toys with traces of toxins, cellphone batteries catching fire
Two examples of safe and healthy products as a vital part of customer use solutions:
- -Simple, cheap wood-burning stoves for India against indoor pollution
- Plant oil stove to improve health + fight deforestation - Increase in oil/energy prices since 2002 –> More energy-efficient houses
and ppliances
Durability
- Historical development
- 3 types of p.o.
- Examples
- Solution
- Until ~1950 durables were regarded as investment and were designed to last as long as possible
- Afterwards: “planned obsolescence“ more common (deliberately shorten a products lifespan)
3 types of planned obsolescences:
build-in
psychological
and technological
Examples:
Fashion industry; upgrades of products like computers, mobile phones
–> shorter lifespan of products
–> Offering a long lasting product and complementary product-related services (use, maintenance and repair) –> Another approach to more sustainable customer use solutions
(Pre-) Purchase Solutions
Customer Solutions (Subdivision) - Graph
- Product related services: Help customers to optimize the appliction of the product sold (training, consulting, maintenance, disposal services) –> possibly adding social and ecological value
-
Use-related services: Provider selling the use of the product instead of the product itself (not for nondurable products: food)
- Willingness to share is high for products which are expensive but seldomly used (Washing machines, gardening equipment, cars, electric tools), low on children‘s toys, furniture (hygiene issues) - Result related services: Buyer neither owns nor uses the product, they enjoy the “fruits“ of the product: the result. E.g. public transport or a textile care center, which cleans your clothes and irons them. Neither owning nor using the washing and cleaning equipment, simply getting the result of the service.
Consumer Post-use Solutions
- Ways of Consumer Post-use Solutions
Consumer wants to get rid of product permanently:
- give it away
- trade it
- sell it
- dispose it (most of the times the case)
- -> Recycling in an environmentally friendly way
- -> Establishment of retro-distribution schemes that are convenient for customers
-Consumer societies: Lots of products are treated as disposables + companies enhance this consumer behaviour (planned obsolescence & promotion of new products which are advertised as better)
Urban mining: Goes further than recycling. Differentiation between short term goods and long term goods. Perceives them as mines for raw materials (example: Freitag bags)
Consumer Post-use Solutions
- Cradle to Cradle Approach
- eco-efficient design vs. eco-effective design
Take-make-waste rationale —————————-> cradle-to-cradle approach
slowly substituted
–> Orientation towards a circular economy instead of linear throughput economy
Cradle to cradle approach generally
- Redistribution, remanufacturing and reuse of products begins with their design
- Create products that are easy to disassemble at the end of their life cycle
- Convenience-focused customer needs incentives to return used product
Cradle-to-cradle approach by McDonough and Braungart
- Differentiation between eco-efficient design (1) and eco-effective design (2)
- -> aim to make efficient use of natural resources and reduce total environmental impacts of products along the entire life cyle
(1) Demateraliztion; reduce toxicity; extended product lifespan
(2) Goes beyond (1). Cyclical cradle-to-cradle approach that is benefitial to human health and natural environment; Like in nature, where the concept of waste does not exist
Sustainability Branding
- Generally
- 4 major steps (steps 1-3)
- Products and services that are branded to signify a form of special added value to
the customer in terms of environmental and social benefits - Presents the consumers perception about product & performance à has to be very strong
4 major steps (see pic)
1.Creating Sustainability Brands:
- Sustainability pioneers are new to the market and they create their own new brands
- Established companies: Challenge: Create a new sustainability brand or integrate sustainability in existing brands which are already well-known in the market and trusted by the consumers
2. Naming sustainability brands:
- Name should be easy to remember and pronounce
- Distinctive
- Extendable to other product categories
- Easy to translate into foreign languages
- Capable of registration and legal protectioSaven
3. Positioning Sustainability brands:
- Marketers overemphasize socioecological attributes, neglect core benefits
- -> sustainable products are likely to fail or remain in alternative niches (issue of sustainability marketing myopia „SMM“)
Two ways to avoid SMM
- identifying and emphasizing the inherent consumer value of socio ecological attributes (efficiency, cost-effectiveness, H&S, convenience, symbolism and status)
- Align socio-economic attributes with core benefits such as functionality, design and durability to create motive alliances
Sustainability Branding
- Generally
- 4 major steps (step 4)
- Developing Sustainability Brands
There are 4 options (see picture):
- Line extension: Company introduces additional items in a given product category under the same sustainability brand name
- Sustainability brand extension: Involves the use of a successful sustainability brand to launch new or modified products in a new category
- Multi-sustainability brands: A company has 2 or more sustainability brands in the same product category, to establish different features and appeal to different target groups
- New sustainability brand: Entering a new product category
Generally:
–> What counts is the brand experience!
