Ethical marketing: Get your house in order

Interested in ethical marketing but don't know where to start? Helen Edwards outlines the different strategies you can take to be a force for positive change.

Ethical marketing is a phrase much bandied about, and on the surface, it appears an admirable concept. However, the cynics suggest that brands seizing on the fad for an ethical bent are merely displaying a selfish reaction to consumer pressure, which, while dressed up in the guise of saving the earth, is simply intended to keep profits flowing.

Many in the industry do profess a genuine desire to effect a positive change in the world, irrespective of commercial considerations. Marks & Spencer's chief executive, Stuart Rose, says the retailer's 'Plan A' eco initiative was implemented after he read former US vice-president Al Gore's book, An Inconvenient Truth, while on holiday last summer. He claims the decision was a principled one and has been enthusiastically taken up by the company's 70,000 employees.

Unremitting consumer pressure and deep-seated belief from the corporate world will certainly be needed to keep ethical initiatives on track and foster the will to steer around the complexities of moral marketing.

Brands that were pioneers in adopting an ethical line, such as The Body Shop and The Co-operative Bank, are all too aware of the pitfalls. Chief among these is the law of unintended consequences. 'The rage at the moment is for carbon reduction, but businesses that rush in to do that and abruptly stop flying in supplies find that they unintentionally impoverish farmers in the developing world,' explains Simon Williams, corporate affairs director at The Co-operative Group.

There is also a plethora of ethical issues to consider. These can be broken down into the following categories: carbon emissions and climate change; ecological sustainability and biodiversity; renewable resources and energy; sound sourcing and fair trade; recycling, waste minimisation and waste disposal; employee rights and welfare; animal welfare; social issues such as health, obesity and diversity; and supply-chain integrity, whereby independent suppliers are asked to match their corporate customers' ethical criteria.

From the outset, the array of questions can be bewildering. Should a brand focus on a single, relevant issue or go for the full 'ethical bundle'? Should it work alongside an ethical non- governmental organisation partner or make all its decisions in-house? Should it trumpet its morality, as M&S has, or play it down, in the vein of online bank Smile?

Other considerations include whether the activity is relevant to the brand and its sector, and whether it is measurable, with objective metrics and firm timescales. The brand should also ask itself whether it is prepared to be in it for the long haul and whether the impact of its ethical activity is, at the very least, proportionate to the size of the business. Possible unintended consequences, the impact on product quality and consumer appeal, and the ease with which its ethical strategy can be communicated must also be borne in mind. Detailed on the following pages are six strategies for navigating this moral maze, and a guide to their chances of success.

THE ETHICAL MAKEOVER

- What it involves

Embracing the full ethical bundle. In other words, a complete, top-to-toe audit of the business and its environmental and social impacts, followed by an overhaul of every business activity to put ethical considerations at the heart of all decisions.

- Who's doing it

Marks & Spencer. At the start of the year it announced the introduction of Plan A - a £200m, 100-point, five-year eco plan. Its impressiveness lies in the fact that it is business-wide, has measurable targets set within a specific timeframe and that, with the help of Jonathan Porritt, founder of Forum for the Future, it has taken just four months from concept to roll-out.

- When to consider it

When there is genuine commitment from every corner of the business, and the brand is the first in its immediate competitive set to do so. Followers will be seen for what they are.

- Ethical impact

Potentially high. A wholesale commitment to ethical issues across the board demonstrates that a brand is making more than a token gesture. But a lot of effort is required to ensure that a real difference is made in each area.

- Commercial impact

Almost certainly good. However, it is by no means guaranteed to compensate for the initial, and ongoing, cost of the programme, and could throw up tough profit vs principles decisions. For example, M&S says it will label foods that have been transported by air, but its ethical credibility would be enhanced by sacrificing profits and not offering out-of-season products at all.

THE FASHIONABLE INITIATIVE

- What it involves

The brand leaps onto the latest ethical bandwagon, grandly declaring its 'commitment' to making a difference. At the moment, this is embodied by the issue of carbon emissions. Too often, though, more of a point is made of the initiative in communications than it really justifies.

- Who's doing it

Insurance company Aviva. Its latest ad campaign declares that the firm's strategy for the future is 'to make sure there is a future'. But what will Aviva do about it? It is 'committed to becoming the first insurer to go carbon-neutral worldwide'. What this means in practice, or whether it is relevant to consumers, remains to be seen. Brands such as Motorola, Gap and American Express buying into the 'Red' initiative, led by U2 singer Bono, also carry the scent of big corporations seeking a fashionable ethical fix.

- When to consider it

Only when the barriers to a more robust, metrics-based initiative are insurmountable, on the grounds that doing something is better than doing nothing. Even then, it is wise to be suitably modest in communications about the likely global effect of the brand's contribution.

- Ethical impact

Low or at least hard to evaluate, as the promises made by the brand tend to be vague and devoid of objective measures or a firm time-scale. A short-term measure will have little real impact.

- Commercial impact

Generally poor, especially if several brands in a category are doing it or consumers sense it is simply a knee-jerk reaction.

THE SINGLE FOCUS

- What it involves

Choosing a single ethical issue, ideally one that is relevant to the business activity, and focusing energy and resources to make a measurable difference.

- Who's doing it

Ariel. Its 'Turn to 30' campaign is a piece of clever thinking typical of owner Procter & Gamble, suggesting that the way the product is used, rather than the product itself, will effect change. 'Seventy five per cent of the energy used in the washing process goes on heating the water up,' says an Ariel spokesman. 'If we can persuade the consumer to wash at 30 degs instead of 40 degs, they still get white clothes and are doing something for the environment.' P&G has spent £600,000 on the campaign, according to Nielsen Media Research, and must take some credit for the 48% of people who, according to Mintel, claim to wash at lower temperatures.

- When to consider it

When commercial circumstances make it too costly or unwieldy to change everything for a complete ethical makeover.

- Ethical impact

Single, simple measures that affect big populations can have more effect than packs and formulation changes. For example, the US' decision to extend its use of summer-time hours by four weeks is expected to save the equivalent of 10,000 barrels of oil a day.

- Commercial impact

Good. Consumers are motivated by ethical initiatives relevant to the brand sector, according to Craig Smith, professor at London Business School.

DEMOCRATIC ETHICS

- What it involves

Offering an ethical option within the wider brand repertoire. Consumers can then decide for themselves whether to buy the standard or ethical variant.

- Who's doing it

Car marque Toyota's petrol-electric hybrid model Prius is just one vehicle in its extensive range, which also includes the gas-guzzling Land Cruiser; Levi's offers an 'Eco' jean; and in 2005 Nestle launched Partners' Blend, a fairtrade coffee. In a variation on this theme, a big corporation might buy a niche brand to add an ethical option to its portfolio.

- When to consider it

If a brand believes ethical decisions are for the consumer to make, it is an honest and commercially viable, approach. It would help if the difference in price between ethical and standard variants were kept low.

- Ethical impact

This approach throws up an ethical conundrum. Most ethical options are far more expensive than their comparable standard options; 100g of Green & Black's Fairtrade Organic Cocoa Powder, for example, is more than three times the price of the same amount of Cadbury's Drinking Chocolate. This creates a conundrum, as buying ethically becomes the preserve of the well-off.

- Commercial impact

Variable. There is a three-month waiting list for Toyota's Prius, but Nestle has been guarded about the performance of Partners' Blend. It seems the prize for these brands is not profit but the halo effect they can tap into.

DEEP ETHICS

- What it involves

This is more a way of business life than a strategy. These brands, which include Innocent Drinks, Howies, People Tree and The Body Shop, have been built from ethics up. The approach's two hallmarks are willingness to sacrifice profits for principles, and a continual hunger to move the ethical debate forward.

- Who's doing it

A comparison between fairtrade coffee shop Progreso and Starbucks illustrates the difference between deep and standard business ethics. Progreso makes its coffee producers active stakeholders in the business. Even the most ethically savvy big corporations tend to shy away from this sort of willingness to help the developing world move up the value chain, as seen in Starbucks' involvement in a legal battle to prevent Ethiopian farmers from owning trademarks to their own regional coffee variants.

- When to consider it

When the brand, business and investment are yours. These values have to be a core part of the business from the beginning.

- Ethical impact

These brands are often niche players, so the direct environmental and social impact that their actions have might be modest. However, their force as agents of change and motivators for bigger corporations makes them extremely influential.

- Commercial impact

In the short term, profits can dip as these brands make sacrificial decisions. The Co-op, for example, edits consumer choice by refusing to stock light bulbs that are not energy-efficient. This runs the risk that customers will choose to shop elsewhere. However, in the long term, this may well be the business model of the future.

COMMUNICATIONS-ONLY

- What it involves

Putting the record straight about the brand's existing business offer by making sure consumers know the facts, and combating negative impressions about the brand's ethical record or sector.

- Who's doing it

EasyJet. Faced with criticism aimed at the aviation sector, the budget airline communicated the environmental virtues of its business model, without overstating its case. Ads have focused on the fuel efficiency of its young fleet, and its high load factors, leading to vastly lower emissions per passenger km than the industry average. But it might want to reconsider its 'Come on, let's fly' slogan.

- When to consider it

When there are question marks over the brand or its sector and the brand's ethical credentials are stronger than those of rivals, but there is a sense or proof that consumers are unaware of it.

- Ethical impact

A communications-only approach implies no substantive change in the operation of the business, so the company itself is not taking steps to improve its ethical performance. But information can help consumers make better choices, so some kind of ethical impact is possible.

- Commercial impact

Depends on the quality of the communications. If they are too defensive, or claims are made that decisions were taken for ethical reasons when they resulted from commercial considerations that happen to be ethically sound, the strategy could backfire.

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