CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND OF THE STUDY

Marketing can best be described as a “social process by which individuals and groups obtain what they need and want through creating, offering, and exchanging products and value with others” (Kotler,2000). Modern conceptions of marketing philosophy are usually traced back to the early part of the twentieth century. Many marketing theoreticians have concurred that there are five distinct eras in the development of marketing theory and includes the production orientation, product orientation, sales orientation, market orientation, and the societal marketing orientation (Keith,1960; Dawson, 1969; Bartels, 1974; Kotler and Keller, 2006). The various perspectives on the development of marketing theory are in reality the differences in perspective, with some researchers viewing it not simply as a managerial and economic activity but also as a social process (Bartels, 1970; Bartels, 1974; Hunt, 1976; Kotler, 2000].

The objective of businesses to maximize profit has been under great criticism. There have been several views that the fundamental objective of businesses should not be to maximise profit only, but should include the advancement of the interests of the society as a whole. Today’s awareness and interest in the proper role of businesses in society has promoted the increased sensitivity to social, environmental and ethical issues. Environmental damage and improper treatment of workers are highlighted in the media. In some countries, government regulation regarding environmental and social issues has increased, and standards and laws are often set at a supranational level (e.g. by the European Union).

DEFINITION OF SOCIETAL MARKETING CONCEPT

Societal marketing concept is an enlightened marketing concept that holds that a company should make good marketing decisions by considering

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consumers' wants, the company's requirements, and society's long-term interests. It is closely linked with the principles of corporate social responsibility and of sustainable development. The concept has an emphasis on social responsibility and suggests that for a company to only focus on exchange relationship with customers might not be suitable in order to sustain long term success. Rather, marketing strategy should deliver value to customers in a way that maintains or improves both the consumer's and the society's well-being. Most companies recognize that socially responsible activities improve their image among customers, stockholders, the financial community, and other relevant publics. Ethical and socially responsible practices are simply good business, resulting not only in favorable image, but ultimately in increased sales.

The societal marketing concept holds that the organisation should concentrate on the needs and wants of their customers, and then deliver the desired satisfactions more effectively and efficiently than competitors, in a way that maintains or improves the consumer's and the society's well-being. It considers as well the possible conflicts between consumer short-run wants and consumer long-run welfare. Taking care of society's well-being is good for business. Societal marketing managers believe that consumers will respond more favourably to companies which are socially responsible, and react unfavourably to companies, which they feel, are not socially responsible. This gives socially responsible companies a competitive edge over their competitors.

Environmentally damaging developments should not be financed or financed only following modification to make them more environmentally benign. Similarly, enterprises and projects promoting environmentally friendly development should be supported. Companies should seek to achieve:

·     reduction in energy consumption and improve energy efficiency

·     conserve resources and use renewable or recyclable materials

·     minimise or recycle waste

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·     dispose of waste in an environmentally responsible manner

·     reduce the use of chlorofluorocarbons (CFCs)

· favour suppliers and contractors who adopt environmental initiatives through sponsorship.

Societal marketing concept should not be confused with social marketing. The societal marketing concept was a forerunner of sustainable marketing in integrating issues of social responsibility into commercial marketing strategies. In contrast to that, social marketing uses commercial marketing theories, tools and techniques to social issues. Social marketing applies a “customer orientated” approach and uses the concepts and tools used by commercial marketers in pursuit of social goals like anti-smoking campaigns or fund raising for NGOs.

According to the free internet encyclopaedia (Wikipedia), societal marketing concept is an expression used to describe what some see as a company’s obligation to be sensitive to the needs of the stakeholders and the environment in its business operations. Societal marketing concept can be defined as the organizations task which tries to identify the needs and interests of the consumers and delivers quality services or products as compared to its competitors and in a way that consumer's and society's well being is maintained. In other words, organizations have to balance consumer satisfaction, company profits and long-term welfare of society. This is a new marketing philosophy and tries to reduce the inequalities at various levels. This theory emphasizes that organizations should not only think of cutthroat policies to achieve targets and jump ahead of competitors but should have ethical and environmental policies and then back them up with action and regulation. Societal marketing can be achieved by following a few principles. It should always be remembered that consumer's needs are of paramount interest. Improvements in products, which are both real and innovative, should be carried out to give long term value to the product; do what is good for the

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society with a sense of mission and trust. In this way, the focus shifts from transaction to relationships. If a client 'repeats business' a bond is created between him and the product and is worth its while for the organization to nurture this bond.

A company’s stakeholders are all those who are influenced by, or can influence a company’s decisions and actions. These include employees, customers, suppliers, community organizations, subsidiaries, affiliates, joint venture partners, local neighbourhood investors and shareholders. It is important to distinguish between societal marketing concept from marketing concept. Corporations in the past, spent money on community projects, scholarship endowment and establishment of foundations. They have also often encouraged their employees to volunteer to take part on community work thereby creating goodwill in the community and further enhance the reputation of the company. Societal marketing concept goes beyond charity and requires that a responsible company will take into full account the impact on all stakeholders and on the environment when making decisions. Pertinent to balance the needs of all stakeholders and the environment when making decisions.

Societal marketing concept is closely linked with the principles of ‘Sustainable Development’ in proposing that enterprises should be obliged to make decisions based not only on the financial/economic factors but also on the social and environmental consequences of their activities. A widely quoted definition by the World Business Council for Sustainable Development states that ‘Corporate Commitment by business is essentially to contribute to economic development while improving the quality of life of the workforce as well as the community and society at large’.(1999) This holistic approach to business as regards organizations in their communities, rather than seeing them more narrowly as being primarily in business to make profits and serve the needs of their shareholders.

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The Policy Statement by Committee on Economic Development (CED) (1997) highlighted activities by business to improve societal welfare on the aggregate; the major areas are as follows:

·     Education;

·     Employment and trading