When one in three people think sprouts, be careful when trying to hand them carrots

The old business adage that the customer is king is widely disbelieved. Many assume that businesses create demand through marketing, with consumers helplessly following the trends. The truth is not so straightforward. McDonald’s has so far failed to persuade its customers to embrace healthier eating. Salads have not sold well. Cut price burgers have done better. Likewise, when Iceland some years ago announced it would sell all-organic food, the customers were quick to punish the company at the tills for its presumption.

But although individual companies cannot make step changes, they do influence behaviour. How they market, what sort of items they discount, what they promote as ‘cool’ ­— these are all tools that they actively use. There is an increasing expectation on business that it will take a care in the social consequences of how its marketing could potentially influence consumer behaviour. Marketing departments that focus solely on the customer to the exclusion of all else, and especially those that do so purely to find the levers to pull to drive buying behaviour, have either missed the message or are in denial over what it means.

There are many such issues, lying in wait for the right catalyst to set them off. You can see easiest how this has played out in relation to the thorny issue of marketing to children. It is pretty straightforward to understand that the whole issue of marketing to children is one that requires a very careful tread.

Tesco, the champion of market segmentation, understood this when it created its kids club years ago as part of the development of Clubcard. It established right from the start that the exercise was about deepening the relationship of trust with the parent, not about selling direct to the kids in order to exploit ‘pester power’. In the event, they found that parents did actually trust them to make some sales information available to kids — under certain circumstances.

This was the message from research carried out by Business in the Community last year, which found that parents were not resistant to the idea of advertising to children where such advertising used traditional media that the parents felt that they understood and were in a position to influence or control.

What they didn’t like was being out of control of how their children were marketed to — and this applied particularly to new media such as text messaging, computer games and internet sites.

However, it is not just about the relationship with customers. With the rising tide of childhood obesity, legislators and regulators have been on the lookout for effective action.

Marketing research holds little sway when intuition comes into play. It is obvious to everyone, surely, that advertising certain foods directly to children is causing obesity. Something must be done, and therefore banning advertising is that obvious something.

Once the issue has become headline news, it is too little and too late for companies to protest that there are wider social reasons and that any measure that doesn’t address these will fail. The argument has already been lost.

Of course, there are many other ways a company’s marketing can end up causing damage to its own brand.

Tobacco giant Philip Morris was recently forced to apologise when it produced a new cigarette brand sold in Israel called Maori Mix. Not only did the packet use imagery suggestive of Maori culture, but to reinforce the point it even carried a map of New Zealand.

Unsurprisingly, the Maoris are very sensitive to the use of their cultural heritage in this way. They even have an established trademark designed to govern the processes by which new products are produced as originating from their community. Philip Morris had not done its homework, and was held to have been marketing without due care and attention.

Only a couple of weeks previously, social responsibility icon Ben & Jerry’s produced a new flavour of ice cream in the US called ‘black and tan’. It was caught by surprise when outraged activists slammed the company for using a phrase that was the nickname of a violent British militia during Ireland’s war of independence. The reference was culturally insensitive in the extreme.

Marketing departments can sometimes get impatient with the internal regulatory processes that seek to constrain their ability to get out there and make money. The CSR and risk management people can all too often end up labelled as the ‘sales prevention team’. However, as the marketers concerned for the above debacles found out to their cost — having a view to other stakeholders (especially when those stakeholders are also customers in other countries) is essential to success.

Part of the challenge is to get CSR out of that regulatory mindset and to have it reframed as an opportunity. Customers have their own personal values, and they can reward brands that demonstrate that they share those values. There is real benefit to be gained here.

This isn’t necessarily about finding the ‘ethical consumer’. Most heads of marketing are used to hearing a lot of guff about how strongly consumers will reward ethical companies. Even if 70% of people say they would rather buy from a company that they believe to be ethical, marketers know that in terms of actual buying behaviour you are looking at less than a tenth of those people that actually follow through.

But this is about understanding how this follows through into brand reputation. When it comes to deeds rather than words, 57% of consumers say that they have recommended a company on the basis of its responsible reputation.

Marketers know that word of mouth is the most powerful sales tool of all. Interestingly, 35% also admit that they have felt guilty about a purchase of a product that they believed not to be ethical. That sounds like a market segment that may be open to switching to other products if price and quality are equal.

When it comes to how consumers behave over environmental issues, Roper Starch Worldwide have identified how the market segments shape up:

11% of people are ‘true blue greens’ who are major purchasers of environmental products and who actively recycle

5% are ‘greenback greens’, they will buy or give for green causes, but won’t make significant lifestyle changes

33% are ‘sprouts’ who care but would spend nothing or at best little to buy green

18% are ‘grousers’ who think it’s someone else’s problem — which leaves the rest, the ‘basic browns’, who think it’s no problem at all, or at least not one that they intend to waste time caring about.

You can see how these segments are shifting over time, with the growth in recent years in organic foods (now at record levels, and beginning to be taken up by poorer groups not just the affluent middle classes where it began) and Fairtrade products. The trend has become marked enough to feed retailer behaviour.

Marks & Spencer’s ‘Look Behind the Label’ campaign has successfully aimed to build on one of the retailer’s greatest assets — a considerable history of trust between it and its customers. Companies that have felt that trust ebbing away, such as Tesco and Wal-Mart, have responded with concrete action plans of their own. Suddenly these companies know that the boundaries of their relationship with their customers is no longer defined by price and quality alone.

So what should marketers that want to remain ahead of the curve do? They could do a lot worse than consult the Business in the Community Marketplace Principles and review their activities against these. In short, they need to be clear that they need to:

Monitor emerging trends, and in doing this to be aware that their customers are not just consumers, they’re also citizens and this can make a difference

Run a sanity check over proposed promotions that identify how the pitch for the campaign may fall foul of important stakeholders. Note that this is not about playing safe and avoiding any hint of controversy — any advertiser will know the power that comes with stretching boundaries occasionally. But stretching a boundary knowingly and fecklessly trampling all over someone’s taboo are two different things

Be aware of the potential for there to be hidden vulnerable customers and make sure the approach taken to marketing doesn’t put these people into a difficult position

Consider the product proposition — can it be changed to be more fit for the future and sustainable? Was ‘beyond petroleum’ a short-term slogan, or a forty-year repositioning of the brand as being a long-term sustainable energy company?

Don’t think that the only CSR that matters is what your customers loudly demand of you today. Just because they don’t value things like fairness in the supply chain today doesn’t mean that they won’t tomorrow.

Sadly, there remains plenty of evidence that marketing departments remain the last bastion against such thinking. There will be more controversy to come before ‘business as usual’ gets redefined in a lasting way.

Mallen Baker is development director for Business in the Community. BiTC’s marketplace principles are available from http://www.bitc.org.uk/marketplace