Welcome! This web conference will begin at 1 pm Eastern time.

1. Welcome! • This web conference will begin at 1 pm Eastern • time. • If you have not already done so, please “sync” • your telephone and computer as detailed in the • “voice connection” tab at the bottom right-hand • corner of your screen.

2. The Stakeholder Approach in the Marketing Discipline • Speakers • Madhu Viswanathan, Professor of Business Administration, College of Business, University of Illinois • Daniel Korschun, Assistant Professor of Marketing, LeBow College of Business, Drexel University • Moderator • Mary C. Gentile, Ph.D., Giving Voice to Values and Babson College

3. Company, Community, and Beyond (Or Me, Us, and Beyond): A Sustainable Market(ing) Orientation for Stakeholders of the 21st Century? Madhu Viswanathan University of Illinois, Urbana-Champaign

4. Overview • Who are the stakeholders of the 21st century? • What is a sustainable market(ing) orientation to address all stakeholders? • What are businesses doing about it? • Qualifications

5. Perspectives on Poverty Macroeconomic approaches Business strategy approaches – e.g., Bottom of Pyramid Subsistence marketplaces approach – microlevel buyer, seller, and marketplace behaviors

6. Consumption and Entrepreneurship Across Literacy and Resource Barriers Marketing and Management in Subsistence Marketplaces Literacy, Poverty, Culture and Psychology Research Consumer and Entrepreneurial Literacy Program - India Sustainable Prod. & Mkt. Dev. for SubsistenceMarketplaces Sustainable Businesses for Subsistence Marketplaces Sustainable Marketing Enterprises Nutrition Education Materials - USA Teaching Social Initiatives

7. A market vendor sells mud cookies at the La Saline market in Port-au-Prince, Friday, Jan. 25, 2008. The cookies are made of dirt, salt and vegetable shortening. (AP | Ariana Cubillos)

11. Disappearing Lake Chad

12. The Sustainability of Water Bottles?

13. Climate Change Source: http://www.news.wisc.edu/11878 Source: http://watersecretsblog.com/archives/reports/index.html

14. Some Collision Courses?

15. Population Explosion Source: http://phillips.blogs.com/goc/2006/02/population_expl.html http://www.geography.learnontheinternet.co.uk/topics/popn1.html

17. Sustainable Market Orientation Characteristics of Subsistence Marketplaces PRODUCTS Resource constraints – Lack of affordability (Make or) buy or forgo decisions Immediacy of basic needs Lack of Knowledge or Expertise with Subsistence Contexts RELATIONSHIPS Resource constraints - Interdependence among individuals Preconceptions About Subsistence Marketplaces Development of consumer skills 1-1 Interactions and strong word of mouth Lack of Personal Connection to Subsistence Contexts MARKETS Resource constraints – Lack of mobility & dependence on groups Fragmented, small and myriad differences Varied group influences Purposeful Understanding of Subsistence Marketplaces Betterment of Life Circumstances Characteristics of Businesses Business Implications Understanding life circumstances Multifaceted product offerings to improve welfare (educational campaigns, etc.) Addressing Customer Needs and Welfare Emphasis on the Human Dimension Business Implications Fairness and trustworthiness Emphasis on individual and community welfare Implementing Business Plans through Social Good Negotiation of the Social Milieu Business Implications Working with diverse groups Social good as common denominator

18. Doing Good Business Doing Well Doing Good For Doing Well

19. A Sustainable Marketing Orientation Beyond Subsistence Marketplaces? • Sustainable market orientation - ingraining product-relevant social good • development of a deep-seated organizational understanding of individual and community welfare as it relates to product offerings • incorporation of the goal of enhancing such welfare into business processes, outcomes, and assessments • inculcation of product-relevant social good into the organizational culture • Why? • Resource constraints arriving soon or already here • Connectivity • Interconnectedness and interdependencies • Interest groups • “Blessed Unrest” by Paul Hawken

20. Cradle to cradle? • What is cradle to cradle? • “This book is not a tree” • Durable, waterproof, recyclable • Technical nutrient – can be broken down and circulated infinitely in industrial cycles

21. Product Design Example • My inventory – Avalon versus Prius • Because we can versus because we cannot! • As consumers • As producers

22. Wal-Mart • Has launched a host of sustainable supply chain programs • Implemented a new supplier packaging scorecard on February 1 that formally rates suppliers on their progress toward developing sustainable packaging, as well as their ability to help Wal-Mart reach its company-wide sustainability goals to reduce waste, use renewable energy and sell sustainable products • Collaboration with GE to use fluorescent lights Source: http://franklycsr.wordpress.com/2008/02/04/sustainable-supply-chain-initiatives-booming/

23. Source: http://www.unglobalcompact.org/docs/news_events/9.1_news_archives/2007_11_28/US_Starbucks.pdf

24. Source: http://www.unglobalcompact.org/docs/news_events/9.1_news_archives/2007_11_28/US_Starbucks.pdf

25. From Conventional to Sustainable Marketing? • Central role of consumption in both the problems and the solutions for the twenty-first century • Consumption, overconsumption, and underconsumption • What is the role of marketing in sustainable development? • How should the marketing discipline adjust to looming opportunities and challenges related to accelerated development, poverty alleviation, and ecological disaster? • Has led to sophisticated techniques to understand consumer preferences and create valuable offerings • Can it address the deeper aspirations of vast populations? • And in ecologically and socially sustainable ways?

26. Sustainable Marketing • Marketing ideally suited? • Focus on consumption and exchanges • Interface with the marketplace • Understanding broader environmental trends • Adopt a long-term perspective based on a deep understanding • of cultures • of radically different contexts of poverty • of ecological challenges • and of the nature of sustainable development • Understand shortcomings of a predominant focus on consumption with seemingly endless resources. • Understand the potential to create sustainable value in the broadest sense of the word • Adopt a sustainable market orientation that enables sustainable consumer behavior through sustainable product design…. • Explicitly infuse values such as ecological and social sustainability into the core of the marketing concept

27. Sustainable Marketing: From Customer Wants to Human Aspirations? Thank You!

28. Marketing in Multi-Stakeholder Environments: Lessons from Corporate Social Responsibility Daniel Korschun Drexel University The Aspen Institute September 3, 2009

29. Stakeholder Theory and Marketing: A Lengthy Courtship • Stakeholder Theory views an organization as collection of actors with whom it interacts • Stakeholders put something at risk • Stakeholders have legitimate claims on organizational wealth • Continued calls to incorporate stakeholder theory in marketing (e.g., Kotler 1967-2009; Morgan & Hunt 1994; Wind 2006) • “More attention to stakeholder theory must be central to marketing scholarship” (Lusch 2007) • Failure to acknowledge the importance of stakeholders can feed “a new form of marketing myopia” (Smith, Drumwright, & Gentile 2009) 29

30. Tenets of Received Wisdom • Companies form relationships with stakeholder groups by allocating resources in ways that meet the diverseinterests of each group 30

31. Tenets of Received Wisdom • Companies form relationships with stakeholder groups by allocating resources in ways that meet the diverseinterests of each group • Three “tenets” • Assess stakeholder initiatives by expenditures • Stakeholders reside in groups of likeminded others • Trading-off stakeholder interests paramount 31

32. Substantial Obstacles Remain • Common challenges in stakeholder management: • Wide array of corporate activities involved • Diverse demands of stakeholders • Varied forms of exchange between company and stakeholders • Some lingering questions: • What do “good” company-stakeholder relationships look like? • What drives strong and enduring relationships? • How can managers/researchers address diverse interests of stakeholders? 32

33. Corporate Social Responsibility:A Source for New Insights? CSR = allocation of corporate resources to initiatives aimed at improving societal welfare Enacted (frequently) at corporate level (e.g., Ford Foundation) Involves wide variety of stakeholders Tied closely to corporate identity Has normative as well as instrumental elements (see Donaldson & Preston 1995) 33

34. Corporate Social Responsibility:A Source for New Insights? CSR Strategy Corporate Strategy Enacted (frequently) at corporate level (e.g., Ford Foundation) Involves wide variety of stakeholders Tied closely to corporate identity Has normative as well as instrumental elements (see Donaldson & Preston 1995) 34

35. The Received Wisdom in Practice: An Example from a CSR Report 35

36. Tenet 1:Assess Stakeholder Initiatives by Expenditures • Two routes connecting CSR and corporate performance (Margolis et al. 2008) 36

37. Tenet 1:Assess Stakeholder Initiatives by Expenditures Direct Route • Two routes connecting CSR and corporate performance (Margolis et al. 2008) 37

38. Tenet 1:Assess Stakeholder Initiatives by Expenditures Direct Route Indirect Route • Two routes connecting CSR and corporate performance (Margolis et al. 2008) 38

39. Tenet 2: Stakeholders Reside in Groups Individual Stakeholder Company Stakeholder groups not homogeneous 39

40. Tenet 2: Stakeholders Reside in Groups Individual Stakeholder Company Stakeholder groups not homogeneous Stakeholder responses to CSR activity not confined to single role (Sen, Bhattacharya and Korschun 2006; Bhattacharya Korschun and Sen 2008) 40

41. Tenet 2: Stakeholders Reside in Groups Individual Stakeholder Company Consumption Investment Employment Stakeholder groups not homogeneous Stakeholder responses to CSR activity not confined to single role (Sen, Bhattacharya and Korschun 2006; Bhattacharya Korschun and Sen 2008) 41

42. Tenet 3:Trading-off Stakeholder Interests is Paramount • Central mediator of CSR-Behavior link is identification (e.g., Bhattacharya, Korschun, Sen 2009; Maignan, Ferrell and Ferrell 2004; Drumwright, Cunningham and Berger 2006) • Stakeholders are drawn to companies that share their values (repelled by those with value mismatch) • Corporation can serve as super-ordinate identity (Korschun 2008) 42

43. A Shift in Thinking Traditional Approach Assess by expenditures Analyze at group-level Advance interests Recommended Approach Understand stakeholder psychology Analyze at individual-level Encourage expression of values 43

44. Thank You!

45. The Stakeholder Approach in the Marketing Discipline • Speakers • Madhu Viswanathan, Professor of Business Administration, College of Business, University of Illinois • Daniel Korschun, Assistant Professor of Marketing, LeBow College of Business, Drexel University • Moderator • Mary C. Gentile, Ph.D., Giving Voice to Values and Babson College