Greenwashing: VW's reputation is at risk

Volkswagen, the world's best-selling car company as of 2015, has admitted to using software to manipulate testing for polluting emissions in its diesel-powered cars.

Many hundreds of thousands of vehicles are involved--and, just as critically, the reputation of this venerable automaker is at risk. VW has already dropped the royal warrant from its UK communications.

Being linked to greenwashing will damage any company in the short term. In the case of VW, which has long-term ambitions to remain the top-selling automaker on Earth, dealing with the scandal surrounding its diesel cars' actual pollution performance is complicated by customer claims, shareholder outrage and governmental actions. VW must now rehabilitate its brand and reassure stakeholders of its sincerity and commitment to fixing what's gone wrong.

In this age of social media and online news coverage, when negative headlines can flash around the world within moments, is greenwashing going to disappear? In the words of Nick Timon, chief innovation officer of marketing firm Adjust Your Set:

I don’t mean to sound glib – of course environmental consciousness is important, laudable and pressing – but the way many companies are suddenly developing a social conscience on this front smacks of insincerity and laziness, as if the industry has learnt nothing from the greenwashing debacle and instead is jumping gung-ho into the shiny new sport of ‘purpose-washing’.

Researching the marketing environment

DEVELOPING YOUR MARKETING PLAN

Every marketing plan begins with a review of the external trends and changes that affect the company, product, customers, buying trends and competition.

To get a headstart on researching the marketing environment, try clicking on the links shown on my Marketing planning links page. Every link is regularly tested and updated as needed--plus new links are added as well.

Links are categorised according to:

• Preparing for marketing planning
• Analysing the marketing environment
• Researching consumer and business demographics
• Marketing ethics, social responsibility and sustainability
• Branding issues and ideas
• Marketing issues and ideas
• Marketing control and implementation
• Retailing and channel trends

For a broad overview of the marketing plan, including a free downloadable template, click here.

From Millennium Wheel to Coca-Cola London Eye

The London Eye was originally branded as 'Millennium Wheel' in 2000, part of the city's celebration of the turn of the century. After being sponsored by British Airways and then by EDF Energy, the London Eye (a Merlin Entertainments attraction) is now sponsored by Coca-Cola.

This change in corporate sponsorship means the Coca-Cola London Eye (as it's being called) glows red at night--the color of the soft drink marketer's iconic label. The sponsorship includes Coca-Cola branding inside each pod and on staff uniforms, ticket kiosks, etc.

Some critics are outraged about Coca-Cola sponsoring such a popular family attraction, worried about encouraging children to consume sugary beverages. Health advocates distributed free toothbrushes at the Eye's reopening on Saturday to call attention to nutrition issues and the ethics of this sponsorship, which runs for two years. What then?

Top four reasons why competitors are stakeholders

Should competitors be considered stakeholders? (Stakeholders are people and groups that can directly or indirectly influence or be influenced by a company's performance.)

Yes, competitors are stakeholders. No, a company shouldn't consult with competitors when developing marketing strategy, nor should it replicate a competitor's successful strategy. But you, as a marketer, should carefully study what others are doing, anticipate trends and be ready to make adjustments as the competitive landscape changes.

Here are the top four reasons why competitors are stakeholders:

1. A competitive move can affect the entire industry. Whether it's a pricing change, a new product or a company going into administration, what a competitor does can significantly influence each company in that industry. Think of Apple's iPad and how the introduction of those innovative new devices affected competing firms. Suddenly tablet computers were the hot new category, and competitors had to race to catch up. Then Apple was feeling the competitive heat when competing devices flooded the marketplace with new features and functions.
2. A competitor that appears weak or small may become a strong or immediate influence overnight. Snapchat didn't make much of a competitive impact when it initially introduced its "disappearing" photo feature. Now that Snapchat has attracted millions of users, however, others want to add similar functionality for competitive reasons. So a startup that appeared on the periphery at first has now become highly influential and a factor to be considered in many competitors' marketing plans.
3. A competitor's unscrupulous move can affect other stakeholders who are critical to your company or industry. One unscrupulous company can make customers suspicious of an entire industry, which may hurt your business as well. One firm's unethical action can prompt regulators to change the rules, affecting every firm that serves the same market. Remember, you can't control what stakeholders such as competitors do, but you must be aware of their policies and actions and, when necessary, make your voice heard about the situation. 
4. A competitor can lead others to be better corporate citizens. Walmart gave its reputation a green boost when it began to aggressively support sustainability initiatives, in part by participating on industry councils with competitors. Now Walmart's marketing clout is behind many new products and services, bringing together suppliers and competitors for environmental improvement initiatives. Whether your firm supplies Walmart or competes with Walmart, the retail giant's sustainability activities will affect what you do.

One final thought: Monitor the marketing environment carefully. You never know where your next competitor may be coming from.

What about online ad blocking?

Ad blocking software is increasingly popular, installed by consumers who prefer not to see interstitial ads (which appear briefly while other content is loading), blinking ads, skyscraper banner ads (narrow and tall), pop-ups or pop-unders, and other types of Internet ads. E-Consultancy singles out ads that obscure online content as being particularly annoying.

Adblock Plus is only one of many web browser add-ons that consumers use to make online ads disappear. Yet Adblock Plus does allow some ads to be visible, if they meet its guidelines and pay for the privilege of being whitelisted (except for small advertisers).

If consumers don't see ads, advertisers won't reach their target audiences--and sites that rely on being paid for advertising may be hurt financially. So the Irish tech firm Pagefair is now offering websites the ability to install software that prevents ad blocking software from, well, blocking ads.

'Ad blocking costs websites money' is the headline on Pagefair's home page. Hundreds of websites use Pagefair to counter the blocking, and the company also aims to educate consumers about how ad blockers affect sites.

Pagefair's research suggests 20% of visitors to its clients' websites have ad blockers installed to prevent ads from being visible. Pagefair provides clients with analytics to evaluate the situation on their sites and the option to display ads requesting that consumers turn off the ad blocker and make ads visible.

Are ubiquitous or annoying ads necessary to keep the financial balance of the Internet? Should consumers care about the effect ad blockers have on websites' bottom line? How can advertisers encourage consumers to allow ads, through better targeting and better content and format? What are the ethical considerations for advertisers and for consumers?

Marketing to kids--yes or no?

In a recent Sixth Sense/YouGov survey, 49% of UK adults said yes, it's OK to market to children. The other half of adults surveyed think it's NOT OK to market to children.

As the debate continues, some adults are signing online petitions posted by Leave our kids ALONE. This group wants to ban advertising messages targeting children who are 11 and younger. One member wrote an opinion piece for the Guardian, pointing out the rising tide of marketing surrounding children at school, at home and in daily life.

The Advertising Standards Authority, which regulates UK ads and is looking closely at the issue of marketing to children, tells the BBC: 'Regulation in this area is deliberately strict, but proportionate and based on the best available evidence'.

Changes in media technology are responsible, in part, for adding urgency to the question of whether marketers should target children. An article in Marketing Week notes that 'The rise of digital communication channels and in-school advertising, in particular have been singled out as stress points by parents who claim there is a lack of control over messaging to youngsters'.
 
On the other hand, the 8-16-year-olds polled in the Sixth Sense/YouGov research said they recognised the reason for advertising's existence. Nearly all were aware that ads seek to get them to buy. In other words, as long as children understand what marketing is about and why it's all around them, they are better positioned to analyse the messages and make a more informed decision about how to react.

Still, some marketers are choosing to curtail marketing to youngsters. Coca-Cola is no longer going to advertise to  children under 12 in any market. Effectively, however, this means not advertising in media where children make up more than 35% of the audience.

The debate continues: What are the ethics of marketing to children?

Oxfam goes 'behind the brands'

Oxfam International wants consumers to know more about how the world's biggest food brands approach ethics and social responsibility. The 'Behind the Brands' campaign is aimed at actually changing the way these big brands do business, using the public spotlight and consumer pressure to stimulate change.

Here's what Oxfam's chief executive says: 'Consumers have the right to know how their food has been produced and the impact this has on the world's poorest people who are growing the ingredients. The hundreds of brands lining supermarket shelves are predominantly owned by just 10 huge companies, which have combined revenues of more than $1bn a day while one-in-eight people go to bed hungry every night'.

Oxfam has developed scoreboards and applies seven criteria (including transparency, land use and climate issues) to rank these 10 big food marketers:

• Associated British Foods (owner of Ovaltine and other brands)
• Coca-Cola
• Danone
• Kellogg
• General Mills
• Mars
• Mondelez (formerly Kraft)
• Nestle
• Pepsi
• Unilever

Nestle was among the first to respond to Oxfam's rankings regarding its chocolate products. Among other actions, it is studying how to have a strong, positive impact on women in its supply chain. Oxfam welcomed this response and urged prompt planning and implementation.

Needless to say, social media like Facebook (where Oxfam GB has 128,000+ likes) will play a role in the success of 'Behind the Brands'.

Marketing with a larger purpose

What are your values--and are they integrated into your marketing?

Sainsbury's ad

Cilla Snowball, chair of the Advertising Association (and on the board of Comic Relief), recently told an audience of advertisers that 'purpose, values and consistency' are three key principles for showing how a brand makes a difference: 

'Consumers want to connect with brands that have a purpose and if that’s at large in your TV ads and expressed in a number of other ways you’ll do better than brands that don’t'.

Snowball, chief executive of the agency that handles Sainsbury's advertising, mentions the store's strapline 'Our values make us different' as a good example of integrating purpose into the marketing message and the organisation's operations.

Other UK retailers are also very active in purpose-led marketing. Marks & Spencer's Plan A has set ambitious goals for going green in merchandising, production, operations and almost every other function. M&S recently introduced the world's most sustainable men's suit. It's the result of a complex and sustainable supply chain created with the purpose of developing a product that satisfies customers' needs and protects the environment.

John Lewis is another retailer known for strong values that guide its decisions. From the employee ownership model to the green transportation initiatives, ethical sourcing and use of alternative fuels, John Lewis incorporates purpose into its daily operations and marketing. Long after the latest fashions fade, values will endure and remain important to customers as they make decisions in the marketplace.

Walmart and ethics

Traditionally, Walmart has been known for its high ethical standards, not allowing outside companies to buy even a cup of coffee for merchandise buyers, to avoid any influence or conflict of interest.

Asda, like all Walmart companies, has an ethics code governing internal activities and also standards that apply to smaller and local suppliers as well as to international suppliers.

Now reports of a major bribery scandal involving Walmart's Mexican division are raising questions about the company's commitment to ethical actions. The corporate board of directors has authorised an investigation of allegations that its Walmart de Mexico chain paid bribes to expedite permits for new stores throughout Mexico, violating not only the firm's ethical code but also U.S. laws forbidding such illegal payments. U.S. officials are also examining the evidence to determine what happened. Were bribes paid to pave the way for expansion, higher turnover and increased market share in Mexico?

Do Food Marketers Aim at UK Children Online?

Are Nestle and Cadbury--among others--marketing unhealthy [sugary, for example] foods to UK children online? The British Heart Foundation and Children's Food Campaign are complaining about this type of activity; the Advertising Standards Authority has strict guidelines for TV adverts targeting kids, but these don't apply in the same way to Internet activity. Here's a quote from the Children's Food Campaign:

Companies are shamelessly exploiting gaps in marketing regulations by targeting children online with promotions for junk foods that cannot be advertised during children's TV.

The companies say no, they're not targeting young children inappropriately. In fact, the Cadbury's Furry Tales site, mentioned by critics, will be closed very soon because it doesn't meet the guidelines of parent company Kraft. The site, which features cute cartoon characters on the main page (see below), requests a year of birth for entry from 'supervising grownups'.

Watch for more controversy and possibly more regulations addressing this issue.