Kimberly Clark
EXECUTIVE SUMMARY
Kimberly Clark is a worldwide leading health and hygiene company, and has won global recognition in relation to social and environmental responsibilities. In spite of this recognition, the nature of the FMCG industry has hindered the extensive efforts of KCA’s CSR programs and activities. To reduce consumer scepticism and enhance consumer confidence with KCA, we have identified key elements instigating reform within their current CSR policies.
Despite KCA’s extensive involvement of CSR programs and activities, the nature of the FMCG industry has consequentially undermined the sincerity and credibility of KCA’s proactive efforts to take social responsibility beyond the realms of meeting legal obligations.
To address these …show more content…
issues, we have established recommendations supported by academic research and scholars on the basis of changing trends and values of society. Firstly, to justify the credibility of KCA’s CSR activities, we have endeavoured an in-depth analysis of the current trend and direction of new technological developments which can facilitate long term changes impacting on the environment.
Furthermore, it is critical to assess how effectively CSR activities have been implemented, and whether or not society will be receptive and gain consumer confidence regarding KCA’s CSR activities. Proposed recommendations have been developed according to Cause Related Marketing (CRM) model concepts, which will facilitate the enhancement of credibility and sincerity of KCA’s involvement and concern for social issues. In order to build strong and trustful relationships with its customers, we relate how CRM within CSR can actually improve the overall brand corporate image of KCA. Also techniques that KCA can use in designing or conveying such social issues through their advertising have been mentioned.
Radical recommendations have been proposed in a manner in which KCA can successfully implement its CSR programs through internalizing communication with employees, facilitating the alignment of incorporating CSR programs with the company culture.
By adopting the above recommendations, KCA should be able to combat the negative stigma that FMCG industry is harmful to the environment. By addressing the core elements that contribute to scepticism and resistance to consumer confidence development, it is believed that social perceptions can be changed in the long term.
TABLE OF CONTENTS
WHAT IS KIMBERLY CLARK AUSTRALIA CURRENTLY DOING? ...............................4
WHAT ARE THEIR COMPETITOR’S DOING? ……………………………………………………….4
WHAT DO CONSUMERS FEEL ABOUT CSR MARKETING CLAIMS? ………………………5
WHAT CAN KIMBERLY CLARK DO? ……………………………………………………………………5 -9
Change Value and Technology………………………………………………………………..…..5 -6
Using Cause Related Marketing………………………………………………………………..…6 -7
Social Topic Information……………………………………………………………………………..7 -8
Internal Adoption of CSR…………………………………………………………………………… 8 -9
REFERENCES…………………………………………………………………………………………………….10 - 11
APPENDICES…………………………………………………………………………………………………….12 - 19
Appendix A: Competitor CSR Activities
Appendix B: Annual Bioplastic Production Capacity Statistics
Appendix C: Unilever Adoption of HDPE
Appendix D: How CRM can enhance Brand Image?
Appendix E: Aircel ‘Save Tigers’ Campaign Strategy
Appendix F: PESTL Analysis
WHAT IS KIMBERLY CLARK AUSTRALIA CURRENTLY DOING?
Kimberly-Clark Australia believes that corporate social responsibility and sustainability are best achieved by embedding core values, corporate codes of ethics and policies, procedures and practices (KCA Sustainability Report, 2009).
KCA has been recognized as a sustainable leader since the early 1990s with local programs that includes water, energy and waste landfill reduction programs. KCA has achieved exceptional results across all areas of CSR and has gained appreciable global recognition. Some of their major achievements include:
* KCA was ranked 1st in the Personal Products category of the Dow Jones Sustainability World Index for five consecutive years owing to its Environmental Management Vision Program * Ranked 5th in the Best Corporate Citizen 2010 list * KCA also won the Personal Care and Cosmetics Packaging Action Award 2009
KCA is one of the first Australian companies to have an environmental policy and Environmental Management System that is based on global recognised ISO 1400 standard. Some of their initiatives include the Green Team, The Environmental Solution and ‘Reduce Today, Respect Tomorrow’ campaign. The Community Care Program, Jeans for Genes Day, their partnership with ‘Clean Up Australia’ and Kimberly-Clark Good Corporate Citizen Program are some of their programs aimed towards community development (KCA Sustainability Report, 2009).
WHAT ARE THEIR COMPETITORS DOING?
The implementation of CSR no longer creates a competitive advantage, where all identified competitors in the FMCG industry have grounded well established CSR programs and activities in place. * Johnson & Johnson with their ‘Healthy Planet 2010 Goals’ that focuses on efficient energy use, waste reduction and improving environmental literacy (Johnson & Johnson Annual Report 2008). * Unilever continues focus on Cleaner Planet Plan to reduce future environment impact (Unilever Sustainable Development Report 2009). * P&G focuses its social responsibility through implementing P&G Live, Learn and Thrive signature programs over 50 countries, including Australia to help poor children gain access to proper education and a healthy living (Procter & Gamble Sustainability Report 2009).
(A detailed list of current CSR initiatives for Unilever, Johnson & Johnson and Procter & Gamble has been provided in Appendix A)
WHAT DO CONSUMERS FEEL ABOUT CSR MARKETING CLAIMS?
McWilliams and Siegel (2001), define CSR as situations where the firm goes beyond compliance and engages in ‘actions that appear to further some social good, beyond the interests of the firm and that which is required by law’. But marketing of such actions seem to be having low impact on consumers for most companies. CSR claims are typically difficult to verify credence information situations, and therefore potentially more prone to scepticism(Darby and Karni, 1973). Also, there is an increasing amount of scepticism among public towards organizations marketing their CSR claims owing to the increasing awareness that most of these companies are using this as a marketing tool. Moreover, Cognitive responses to advertising, such as scepticism, have been found to affect brand evaluations.
WHAT CAN KIMBERLY CLARK DO?
The Industrial Revolution triggered a priority for productivity amongst industrial corporations, where productivity is reliant on efficiency in terms of profits and growth. However, the rapid depletion of natural resources and the ever increasing pressure on the environment from human wastes has instigated a need to shift the focus from productivity to sustainability. Sustainability relies upon efficiency and capacity irrespective of an organization’s objective. Consequentially, the concept of permanence is widely being adopted as opposed to that of productivity, focusing on an organizations’ ability to meet the needs of the present whilst not compromising the future (Mirchandani & Ikerd, 2008).
A) CHANGING VALUES AND TECHNOLOGY
KCA needs to further adopt the relatively young concept of sustainability currently implemented to overcome the non-compensatory nature of the FMCG (Fast Moving Consumer Goods) industry. The polymers (plastic) are produced from fossil fuel raw materials, and its spiraling prices and rapid depletion are causing concern for the plastics industry (Mohanty, A.K., Misra, 2002). To sever the rising costs as a result of rising oil prices, a substitute for petro based polymers, biopolymers can be applied. Market Reports on Biopolymer technology suggests that through technological progress, economies of scale in production and its causal lower costs indicate the ‘potential to substitute petro based polymers with biopolymers will increase in the years ahead.’(Crank & Patel, 2004) (Refer to Appendix B)
Traditional polymer businesses tend to promote administrative activities rather than innovative activities. Innovation is incremental with the objectives of cost reductions via process improvements, and upgrades of existing products (Chadha, 2009). Thus in the name of innovation, KCA should establish separate activities concerning bio-polymer technology development and research so as not to disrupt normal business operations in the process of converting from petro based to bio polymers.
CREDIBILITY AND CONSUMER CONFIDENCE
Despite the implementation of various CSR programs and activities undertaken by KCA, the nature of their industry consumes a substantive amount of chemicals and raw materials that are rapidly depleting and have direct impacts on the environment, which mean that consumers are not accepting the credibility and sincerity of KCA’s CSR activities.
Voicing this long term significant technological change of adopting biopolymers and rejecting petro based polymers can help build credibility in the eyes of consumers, and may help shape changing perceptions of the corporate image in a positive light (Chadha, 2009).
Studies have identified improved cross-functional integration in terms of the development and application of innovation can lead to improved manufacturability and quality, reduced production costs, and fewer ramp-up problems (Song et al, 1996). The hindrance of innovation within organizations has prevented standardized adoption in terms of biopolymer technology available from the 80s to a rapid growth within the plastics industry, and is slowly being adopted on product line basis. (Refer to Appendix C).
It is recommended for KCA to ensure representatives from R&D, marketing, and production to work as a cross functional team, facilitating the transfer of a broad array of external information and new know-how details. Close cooperation amidst these different departments can allow common understandings of the development focus and requirements, which in turn will enhance efficiency and effectiveness.
B) USING CAUSE RELATED MARKETING (CRM)
Demetriou et al (2010) suggests a vital relationship between CSR and CRM (Cause-related Marketing). Adkins evaluated the role of cause-related marketing is integral in demonstrating to society a business’ responsiveness to society’s increasing expectations and demands for responsible corporate behavior (Adkins, 1999). Currently, the adoption of CRM has also been expounding as a marketer and fundraiser’s promotional tool.
CRM is an activity initiated by a company with an image, product or service to market for the purposes of building a relationship through a cause(s) for mutual benefit (Demetriou, 2010). For an effective implementation of CRM, KCA will need to adopt long term goals and objectives in terms of CSR and must ensure it fits in line with their corporate strategy.
The next step is to define KCA’s CSR agenda in order to assess initiatives that fit with the agenda. KCA needs to initially establish the demographics of their target market when finding the right charitable partner to form a long term relationship with. It is important that the social issue supported and promoted is also supported by its consumers otherwise, ‘scepticism arises when individuals evaluate an ethical dilemma they do not recognize the existence of, or the social problem the firm is acting to help remedy.’(Meigan & Farrell 2001)
CRM AND KCA CORPORATE BRAND IMAGE
KCA will need to assess the type of corporate image it desires to be associated with, and process identifying the right partner to engage in CRM with. The formation of a long term relationship is more than ideal, which can deliver more benefits than one off donations. KCA has engaged in one off donations during the Victorian Bushfire Appeal during its short term cause. However, this relatively short engagement with a socio environmental issue is shortly forgotten, or society remains unaware of KCA’s contribution.
Cause Related Marketing will allow for KCA to use their charitable efforts to improve their competitive standing within their own industry, which will inevitably impact upon their corporate brand.
A corporate brand is the image that consumers have over a corporation, where the experiences created by a company are associated with the emotional feelings developed by internal and external stakeholder groups (Gregory, 2004). As study results revealed that consumers were willing to switch brands to demonstrate their support to a brand linked to a cause or social problem (Demetriou, 2010), CRM can be utilized to sustain and enhance a positive corporate image or name, which has the potential to engage individual consumers mentally and physically with a corporation.
By effectively implementing CRM as recommended above, KCA can expect to strengthen its corporate brand image to its stakeholders, build public support and establish quicker and cheaper new product launches and brand extensions as a result. (Refer to Appendix D)
C) SOCIAL TOPIC INFORMATION: YOUR NEW ADVERTISING STRATEGY
Another way of reducing consumer scepticism towards CSR Advertising is by providing Social Topic information. Auger et al (2003) opines that ‘consumers often lack knowledge of social issues’. KCA’s current advertising strategy tends to base itself more on informative advertising, which refers to merely providing information about the CSR characteristics (New Machinery, processes or initiatives) or CSR managerial practices (like the CSR Report) of the firm. It is also important to acknowledge the fact that merely providing information is not enough but it is also important to persuade consumers to believe and be affected by such information. In this regard it is advised that KCA’s advertising appeals can focus more on informing consumers the critical gravity of the social issues they are tackling and what impact these issues can have on an individual’s day to day life.
Aircel, which is a major cellular service provider in India conducted the campaign “Save our Tigers” to highlight the dangerous situation of reducing number of tigers in India due to illegal poaching. And their advertising strategy (Refer Appendix E) is clear indication of their focus on creating awareness on the social/environmental issue of saving the decreasing Tiger population among the urban Indian rather than their own personal marketing. The enormous success of their campaign was largely attributable to the emotional quotient in their Ads, which created feelings of fear/concern and compassion in the consumers. From a theoretical perspective, the Aircel campaign may have been based on the Sick baby/Well baby strategy. Fine (1990) proposes that firms can use a Sick Baby/Well baby appeal strategy in framing their advertising message. Sick baby appeal, generally refers to the problem and focuses on the severity of the problem. Often the Sick baby appeal tends to convince the consumers that such a problem is insolvable and creates increased feelings of fear. It is at this point of time that a Well baby appeal comes in that conveys to the consumer’s that the problem that has been portrayed is not a insolvable one and also highlight what the company is doing to improve the baby’s wellness or reduce the problem and also how they intent to keep doing to continuously improve the health of the baby. Therefore, KCA could use such contrasting appeals in their advertising messages to subtly portray their continuous commitment to environmental issues, which would have a more enhanced impact among consumers.
D) INTERNAL ADOPTION OF CSR
In this quest for a socially responsible company, it is important that the process starts internally first. The lack of proximity between CSR activities and employees can become a barrier to deploy the effectiveness of CSR. Employees are the most vital resources of a company; they represent businesses ' brand ambassadors. As Gilbert (2008) puts it ‘employees are much more credible than a full page ad in the New York Times’. In order to achieve success with CSR, it is critically important to communicate sustainability to the internal stakeholder and ensure CSR programs are aligned with the company culture. The internal outcomes of CSR activity brings increased employee pride for the company, increased job satisfaction and hence deliver positive WOM to the society.
But fostering increased employee commitment to such issues can be a difficult task. Gareth Kane (2010) states the concept of ‘Institutional inertia’, which refers to the ‘force of will that pushes back any change within the organization whether it is for the better or the worst’. The root cause of such inertia is the fact that ‘Nobody likes change’. Thereby organizations have to overcome this inertia and they can do so through continuous staff engagement.
STAFF ENGAGEMENT
This basically involves continuous reinforcement and intervention to shift people from their current behavior pattern to something that you want. KCA has already been very active in this area through their ‘Employee participation program’, which involves financial donations from employees. But we believe that such a program is more designed to forcefully involve them rather than a free commitment to it.
Some ways in which staff engagement can be more productive is by making employees the standpoint of external communication to consumers. Such an initiative should firstly involve ‘awareness sessions’ that allows employees to keep abreast of all issues and what their company is doing in terms of CSR activities. Companies need to educate employees about the company’s current and future CSR programs in a clear and consistent approach. And also need to explain the reasons behind the CSR involvement, resources required to develop the CSR programs and the challenges and successes involved in such programs.
Secondly these employees need to be allowed to engage with consumers through either social networking sites or online forums or even through setting up stands outside malls. The crux of their interaction must involve 1) Answering consumer’s queries revolving around environmental and social issues 2) Communicating their current company efforts.
Moreover, to increase employees’ proximity to CSR programs, companies need to provide real meaningful opportunities for employees to participate in the CSR activities. Companies can do so by involving employees in co-creating CSR value, such as in planning, designing and implementing of CSR programs, making them active as participants (Bhattacharya & Sen & Korschun, 2007).
REFERENCES
Adkins, S., 1999. Cause related marketing: who cares wins, Butterworth-Heinemann.
Bhattacharya, C.B., Sen, S. & Korschun, D., 2007. Corporate Social Responsibility as an Internal Marketing Strategy. MIT Sloan Management Review.
Business Social Responsibility, BSR Conference (2008), A Global Approach to Internal CSR Communications, viewed 20thth May, 2010, <http://www.bsr.org/bsrconferences/2008/session-summaries.cfm?DownloadAction=Click&thisURL=/ClientFiles/BAS/Conference2008/Materials/BSR_Conf2008_A_Global_Approach_to_Internal_CSR_Communication
s.pdf&agenda_id=45> Chadha, A., 2009. From carbon to carbohydrates: Corporate strategies for biopolymer technology development. Journal of Commercial Biotechnology.
Crank, M. et al., 2004. Techno-economic feasibility of large-scale production of bio-based polymers in Europe (PRO-BIP). Final Report prepared for the European Commission’s Institute for Prospective Technological Studies, Sevilla, Spain, Utrecht, Karlsruhe: Universiteit Utrecht, Fraunhofer ISI.
Darby, M., Karni, E., 1973. Free competition and the optimal amount of fraud. Journal of Law and Economics 16, 67-88 Demetriou, M., Papasolomou, I. & Vrontis, D., 2010. Cause-related marketing: Building the corporate image while supporting worthwhile causes. The Journal of Brand Management, 17(4), 266–278.
DJSI (2009), Down Jones Sustainability Indexes, Sustainability Index, viewed 17th May, 2010, <http://www.sustainability-index.com> Drumwright, M.E., 1996. Company advertising with a social dimension: The role of noneconomic criteria. The Journal of Marketing, 60(4), 71–87.
European Bioplastics Frequently Asked Questions (FAQs) June 2008, viewed 2nd June, 2010, < www.european-bioplastics.org>
Gregory, J.R., 2004. The best of branding: best practices in corporate branding, McGraw-Hill Companies. Fine, S., 1990. Social Marketing. Allyn and Bacon, Inc., Boston Johnson & Johnson Annual Report 2008, Johnson & Johnson, viewed 19th May, 2010, <http://www.jnj.com/wps/wcm/connect/ad9170804f55661a9ec3be1bb31559c7/2008+Sustainability+Report.pdf?MOD=AJPERES>
Gareth Kane, G.2010, ‘The three secrets of Green business: Unlocking competitive advantage in a low carbon economy’, Earthscan publishers, London
Kimberly Clark Australia, KCA Sustainability Report 2009, viewed 19th May, 2010, <http://www.kca.com.au/docs/kca-sustainability-rpt-2009.pdf>
Kleercut (2009), Greenpeace 's Response to Kimberly-Clark 's Propaganda, viewed 17th May, 2010, http://kleercut.net/en/ResponsetoKC
McWilliams, A. and Siegel, D. 2001. Corporate social responsibility: A theory of the firm perspective. Academy of Management Review, 26: 117-127
Maignan, I.M., Ferrell, O.C., 2001. Corporate citizenship as a marketing instrument -Concepts, evidence and research directions. European Journal of Marketing 35 (3/4), 457-484. Mirchandani, D. & Ikerd, J., 2008. Building and maintaining sustainable organizations. Organization Management Journal, 5(1), 40–51.
Mohanty, A.K., Misra, M. & Drzal, L.T., 2002. Sustainable bio-composites from renewable resources: opportunities and challenges in the green materials world. Journal of Polymers and the Environment, 10(1), 19–26.
Procter & Gamble Sustainability Report 2009, viewed 19th May, 2010, <http://www.pg.com/en_US/downloads/sustainability/reports/PG_2009_Sutainability_Report.pdf> Song, X.M., Neeley, S.M. & Zhao, Y., 1996. Managing R&D-marketing integration in the new product development process. Industrial Marketing Management, 25(6), 545–553.
Unilever Report & publications: Sustainable Development Overview 2009, viewed 3rd June, 2010, < http://www.unilever.com.au/sustainability/Reportandpublications/>
Unilever Sustainable Development Report 2009, Unilever, viewed 19th May, 2010, <http://www.unilever.com/investorrelations/annual_reports/requestreports.aspx>
APPENDICES
Appendix A
Competitor CSR Activities
Johnson & Johnson
Johnson & Johnson’s social responsibility and sustainable strategy is reflected in the Johnson & Johnson credo and its annual reports. In every five years, Johnson & Johnson set new long-term goals to reduce the impact of the environment. To reduce green washing, in 2006 they had introduced ‘Healthy Planet 2010 Goals’. Healthy Planet 2010 Goal categories: * Energy Use—Carbon Dioxide Reduction * Water Use * Paper and Packaging * Waste Reduction * Product Stewardship * Environmental Literacy * Transparency * Biodiversity * Compliance * External Manufacturing
(J&J Sustainability Report, 2008)
Johnson & Johnson is one of the only two multinational companies to receive the World Wildlife Fund 's prestigious Golden Panda Award. Johnson & Johnson Family is highly committed to environmental excellence, aiming to deliver the highest environmental values to employees and the community. Approaching to climate changes Johnson & Johnson adopted the “Climate Friendly Energy Policy” in 2003 and in term of wellness and prevention for employees Johnson & Johnson acquire Human Performance Institute help to achieve health goals.
Johnson & Johnson has a large international and global sourcing presence for human rights which they had established a ‘Global Labour and Employee Guidelines and a Policy on Employment of Young Persons’.
Unilever
In promoting sustainable development and reducing the environmental impact in manufacturing, Unilever conducts a lifecycle analysis of their products in order to seek opportunities to reduce demand for energy and materials. Through addressing sustainability issues and strategies, Unilever also works with global partners includes UN World Food Programme, Global Alliance for Improved Nutrition, World Heart Federation, FDI World Dental Federation and Public-Private Partnership. (Unilever Sustainable Development Report, 2008)
Furthermore, Unilever introduced a Lamplighter program to help employees to track and improve their health, to create a better healthier team for the company. In term of world and community area, Unilever as a co-founded of the Project Laser Beam, partnership with the UN World Food Programme aim to helps child that are hunger and malnutrition in countries such as Bangladesh and Indonesia. Unilever also focus on product innovation technology, sponsoring a project for the implementation of sustainable packaging and Cleaner Planet Plan to reduce future environment impact.
Procter & Gamble (P&G)
Procter & Gamble deliver its social responsibility through five sustainability strategies: 1. Product 2. Operation 3. Social Responsibility 4. Employees 5. Stakeholders
In term of educating the employees, P&G introduce “Take the R” (Responsibility) program to continuously engage and educate employees to sustainable workforce behaviour in the long run.
In P&G’s product innovation, for every category, P&G have team of experts working in packaging sustainability and carry out its Environmental Quality Policy to ensure to provide a safer product, packaging and operations to the employees, consumers and the environment.
P&G focus its social responsibility through implementing P&G Live, Learn and Thrive signature programs over 50 countries, including Australia to help children between ages 0-13.
Live, Learn and Thrive Programs includes: * Pampers and UNICEF: Working Together for Healthy Babies * P&G Beauty’s Aqua Collection: Supporting Children’s Safe Drinking Water Program * P&G and Shiksha: Increasing Access to Education in India * Always and Tampax: Protecting the Futuresof Girls
(P&G Sustainability Report 2009)
Appendix B
European Bioplastics estimates that in 2007, all bioplastics applications comprised approximately 75,000-100,000 tons of the total 48 million ton European plastics market. Annual growth is considerably higher than 20%. Global production capacity will quadruple from nearly 300,000 tons today to well over a million tons by 2011.
Investment is occurring across all areas – in compostable bioplastics such as starch blends and PLA, but also in new polyesters such as PHA, which are due to become commercially available at the end of 2008. If all these announcements come to fruition, global production capacity will quadruple from nearly 300,000 tons today to well over a million tons by 2011. EBP – European Bioplastics
Source: European Bioplastics
Appendix C – Unilever Adoption of HDPC
Unilever Australia has already started integrating bio-degradable materials during the production of its products. Biodegradable products ingredients are considered to be more significant when diverging in the interest of the environment. Furthermore, Unilever has adopted HDPE (high density polyethylene) thermoplastics for their packaging material. Despite this type of material originating from petroleum, it falls under “2” of the SPI Resin Identification Coding System. HDPE is most commonly recycled, and the label “2” enables identifying the polymer type for recycling purposes.
KCA should consider intertwining HDPE within its own product packaging policies, corresponding with the above recommendation. Eliminating waste and consumption of raw materials through reduction and recycling along with biopolymer technology can only enhance KCA’s corporate image, as well as encourage acceptance and credibility of KCA’s CSR activities.
Appendix D -Gregory J. R. ‘The Best of Branding: Best Practices in Corporate Branding.
How CRM can Enhance Corporate Brand Image * The existence of a strong corporate brand can attract and inspire employees, stakeholders and business partners. * Strong Corporate brands build public support and provide goodwill for an organization * New product launches and brand extensions are cheaper and can be implemented more quickly. * Financial performance and value creation are also enhanced.
Appendix E: Aircel ‘Save tigers’ campaign
An example of above suggested strategy in use: Aircel India, which is a major Indian cellular provider, came up with this campaign that had an instant success. And their advertisement clearly represented that the focus is on the cause rather than the brand itself. Also their advertising message of showing a lonely tiger wandering in the woods communicates a Sick baby appeal that has led to increased consumer concern in India and consequent recognition for Aircel.
Appendix F
PESTL ANALYSIS
Political/Legal
In Australia and around the world, corporate social responsibility (CSR) has become a significant phenomenon and act as a key operational elements within the organization. The political situation can play an important role of what is expected from the companies regards to CSR.
Australia is one of the countries that have the strictest regimes of environmental regulation. The World Economic Forum 's Global Competitiveness Report 2007-08 ranks Australia 16th out of 125 nations for the overall stringency of its Environmental Regulations.
Environmental Regulations 2007 (1, 2) Country | Overall stringency of environmental regulations | Germany | 6.4 | New Zealand | 5.8 | Japan | 5.7 | Singapore | 5.6 | United Kingdom | 5.5 | France | 5.5 | Australia | 5.5 | Malaysia | 5.2 | Taiwan | 5.1 | United States | 5.0 | Source: The Global Competitiveness Report, 2007-08, World Economic Forum.
Australian government uses various legislations to govern the environment and social responsibility aspects. Examples of the environmental laws include The Environment Protection and Biodiversity Conservation Act 1999, National Environment Protection Council Act 1994, National Greenhouse and Energy Reporting Act 2007. Additionally, the social and responsibility laws include Occupational Health and Safety Act 1991 and Racial Discrimination Act 1975.
Economic
Due to the current economic conditions, it had made CSR more challenging and requires social programs to support the community more than ever before. However, a recent study from the Australian Centre for Corporate Social Responsibility shows that despite the downturn of the economy, Australian companies are still expanding the investment in CSR programs. A downturn provides an opportunity for companies to leverage greater non-financial resources (Lau, 2009).
Dow Jones Sustainability Indexes and FTSE4Good Index Series are designed to measure and track financial performance of leading sustainability-driven companies. FTSE4Good Index includes: environmental sustainability, human rights, supply chain labour standards, anti-corruption and Climate
change.
Social
The increasing social trends towards CSR are due to the strong requirement of accountability and transparency by the key stakeholders internally and externally. Results from Manpower 2009 Corporate Social Responsibility Survey, shown significant differences in CSR participation related to size of the organization in Australia and New Zealand. In the economic downturn, the larger the organizations were more likely to participate in CSR practices. This is mainly due to large organization can benefit from their reserve finance and volunteer resources that enable them to participate in CSR activities.
Organizations’ policies that are related to CSR may impact on their commitment to CSR activities and participation. The Manpower 2009 Corporate Social Responsibility Survey again shown companies with formal polices will have better and higher external and internal accountability for participation in CSR activities than the informal or no policies companies. CSR helps companies to build trust and reputation to the stakeholders, which act as a long term completive advantage for the company brand.
Source: Manpower 2009 Corporate Social Responsibility Survey, April 2009, Australia and New Zealand
Environment
Increasing global concern about the environment for human habitation and preserving scarce resources had forced companies to become more aware about the current environmental issues, the implementation of environmental systems and development programs to help to combat the conditions. Hence, many companies had begun to focus on the improvement of their current value chain and CSR strategy.
Technology
Due to the rapid depletion of raw materials, it leads to the increase of crude oil prices which then impacts on the plastics industry, these incremental costs can be very difficult to transfer to consumers. However, with the increasing development and trend towards the adoption of biodegradable technology, which is a new type of degradable packaging that allow plastic to biodegrade within few years. Datamonitor Group forecasts biodegradable trend in food and packaging will accelerate in the future years, which not only benefits the society but also reduce costs in the long run for companies.
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Kimberly Clark is a worldwide leading health and hygiene company, and has won global recognition in relation to social and environmental responsibilities. In spite of this recognition, the nature of the FMCG industry has hindered the extensive efforts of KCA’s CSR programs and activities. To reduce consumer scepticism and enhance consumer confidence with KCA, we have identified key elements instigating reform within their current CSR policies.
Despite KCA’s extensive involvement of CSR programs and activities, the nature of the FMCG industry has consequentially undermined the sincerity and credibility of KCA’s proactive efforts to take social responsibility beyond the realms of meeting legal obligations.
To address these …show more content…
issues, we have established recommendations supported by academic research and scholars on the basis of changing trends and values of society. Firstly, to justify the credibility of KCA’s CSR activities, we have endeavoured an in-depth analysis of the current trend and direction of new technological developments which can facilitate long term changes impacting on the environment.
Furthermore, it is critical to assess how effectively CSR activities have been implemented, and whether or not society will be receptive and gain consumer confidence regarding KCA’s CSR activities. Proposed recommendations have been developed according to Cause Related Marketing (CRM) model concepts, which will facilitate the enhancement of credibility and sincerity of KCA’s involvement and concern for social issues. In order to build strong and trustful relationships with its customers, we relate how CRM within CSR can actually improve the overall brand corporate image of KCA. Also techniques that KCA can use in designing or conveying such social issues through their advertising have been mentioned.
Radical recommendations have been proposed in a manner in which KCA can successfully implement its CSR programs through internalizing communication with employees, facilitating the alignment of incorporating CSR programs with the company culture.
By adopting the above recommendations, KCA should be able to combat the negative stigma that FMCG industry is harmful to the environment. By addressing the core elements that contribute to scepticism and resistance to consumer confidence development, it is believed that social perceptions can be changed in the long term.
TABLE OF CONTENTS
WHAT IS KIMBERLY CLARK AUSTRALIA CURRENTLY DOING? ...............................4
WHAT ARE THEIR COMPETITOR’S DOING? ……………………………………………………….4
WHAT DO CONSUMERS FEEL ABOUT CSR MARKETING CLAIMS? ………………………5
WHAT CAN KIMBERLY CLARK DO? ……………………………………………………………………5 -9
Change Value and Technology………………………………………………………………..…..5 -6
Using Cause Related Marketing………………………………………………………………..…6 -7
Social Topic Information……………………………………………………………………………..7 -8
Internal Adoption of CSR…………………………………………………………………………… 8 -9
REFERENCES…………………………………………………………………………………………………….10 - 11
APPENDICES…………………………………………………………………………………………………….12 - 19
Appendix A: Competitor CSR Activities
Appendix B: Annual Bioplastic Production Capacity Statistics
Appendix C: Unilever Adoption of HDPE
Appendix D: How CRM can enhance Brand Image?
Appendix E: Aircel ‘Save Tigers’ Campaign Strategy
Appendix F: PESTL Analysis
WHAT IS KIMBERLY CLARK AUSTRALIA CURRENTLY DOING?
Kimberly-Clark Australia believes that corporate social responsibility and sustainability are best achieved by embedding core values, corporate codes of ethics and policies, procedures and practices (KCA Sustainability Report, 2009).
KCA has been recognized as a sustainable leader since the early 1990s with local programs that includes water, energy and waste landfill reduction programs. KCA has achieved exceptional results across all areas of CSR and has gained appreciable global recognition. Some of their major achievements include:
* KCA was ranked 1st in the Personal Products category of the Dow Jones Sustainability World Index for five consecutive years owing to its Environmental Management Vision Program * Ranked 5th in the Best Corporate Citizen 2010 list * KCA also won the Personal Care and Cosmetics Packaging Action Award 2009
KCA is one of the first Australian companies to have an environmental policy and Environmental Management System that is based on global recognised ISO 1400 standard. Some of their initiatives include the Green Team, The Environmental Solution and ‘Reduce Today, Respect Tomorrow’ campaign. The Community Care Program, Jeans for Genes Day, their partnership with ‘Clean Up Australia’ and Kimberly-Clark Good Corporate Citizen Program are some of their programs aimed towards community development (KCA Sustainability Report, 2009).
WHAT ARE THEIR COMPETITORS DOING?
The implementation of CSR no longer creates a competitive advantage, where all identified competitors in the FMCG industry have grounded well established CSR programs and activities in place. * Johnson & Johnson with their ‘Healthy Planet 2010 Goals’ that focuses on efficient energy use, waste reduction and improving environmental literacy (Johnson & Johnson Annual Report 2008). * Unilever continues focus on Cleaner Planet Plan to reduce future environment impact (Unilever Sustainable Development Report 2009). * P&G focuses its social responsibility through implementing P&G Live, Learn and Thrive signature programs over 50 countries, including Australia to help poor children gain access to proper education and a healthy living (Procter & Gamble Sustainability Report 2009).
(A detailed list of current CSR initiatives for Unilever, Johnson & Johnson and Procter & Gamble has been provided in Appendix A)
WHAT DO CONSUMERS FEEL ABOUT CSR MARKETING CLAIMS?
McWilliams and Siegel (2001), define CSR as situations where the firm goes beyond compliance and engages in ‘actions that appear to further some social good, beyond the interests of the firm and that which is required by law’. But marketing of such actions seem to be having low impact on consumers for most companies. CSR claims are typically difficult to verify credence information situations, and therefore potentially more prone to scepticism(Darby and Karni, 1973). Also, there is an increasing amount of scepticism among public towards organizations marketing their CSR claims owing to the increasing awareness that most of these companies are using this as a marketing tool. Moreover, Cognitive responses to advertising, such as scepticism, have been found to affect brand evaluations.
WHAT CAN KIMBERLY CLARK DO?
The Industrial Revolution triggered a priority for productivity amongst industrial corporations, where productivity is reliant on efficiency in terms of profits and growth. However, the rapid depletion of natural resources and the ever increasing pressure on the environment from human wastes has instigated a need to shift the focus from productivity to sustainability. Sustainability relies upon efficiency and capacity irrespective of an organization’s objective. Consequentially, the concept of permanence is widely being adopted as opposed to that of productivity, focusing on an organizations’ ability to meet the needs of the present whilst not compromising the future (Mirchandani & Ikerd, 2008).
A) CHANGING VALUES AND TECHNOLOGY
KCA needs to further adopt the relatively young concept of sustainability currently implemented to overcome the non-compensatory nature of the FMCG (Fast Moving Consumer Goods) industry. The polymers (plastic) are produced from fossil fuel raw materials, and its spiraling prices and rapid depletion are causing concern for the plastics industry (Mohanty, A.K., Misra, 2002). To sever the rising costs as a result of rising oil prices, a substitute for petro based polymers, biopolymers can be applied. Market Reports on Biopolymer technology suggests that through technological progress, economies of scale in production and its causal lower costs indicate the ‘potential to substitute petro based polymers with biopolymers will increase in the years ahead.’(Crank & Patel, 2004) (Refer to Appendix B)
Traditional polymer businesses tend to promote administrative activities rather than innovative activities. Innovation is incremental with the objectives of cost reductions via process improvements, and upgrades of existing products (Chadha, 2009). Thus in the name of innovation, KCA should establish separate activities concerning bio-polymer technology development and research so as not to disrupt normal business operations in the process of converting from petro based to bio polymers.
CREDIBILITY AND CONSUMER CONFIDENCE
Despite the implementation of various CSR programs and activities undertaken by KCA, the nature of their industry consumes a substantive amount of chemicals and raw materials that are rapidly depleting and have direct impacts on the environment, which mean that consumers are not accepting the credibility and sincerity of KCA’s CSR activities.
Voicing this long term significant technological change of adopting biopolymers and rejecting petro based polymers can help build credibility in the eyes of consumers, and may help shape changing perceptions of the corporate image in a positive light (Chadha, 2009).
Studies have identified improved cross-functional integration in terms of the development and application of innovation can lead to improved manufacturability and quality, reduced production costs, and fewer ramp-up problems (Song et al, 1996). The hindrance of innovation within organizations has prevented standardized adoption in terms of biopolymer technology available from the 80s to a rapid growth within the plastics industry, and is slowly being adopted on product line basis. (Refer to Appendix C).
It is recommended for KCA to ensure representatives from R&D, marketing, and production to work as a cross functional team, facilitating the transfer of a broad array of external information and new know-how details. Close cooperation amidst these different departments can allow common understandings of the development focus and requirements, which in turn will enhance efficiency and effectiveness.
B) USING CAUSE RELATED MARKETING (CRM)
Demetriou et al (2010) suggests a vital relationship between CSR and CRM (Cause-related Marketing). Adkins evaluated the role of cause-related marketing is integral in demonstrating to society a business’ responsiveness to society’s increasing expectations and demands for responsible corporate behavior (Adkins, 1999). Currently, the adoption of CRM has also been expounding as a marketer and fundraiser’s promotional tool.
CRM is an activity initiated by a company with an image, product or service to market for the purposes of building a relationship through a cause(s) for mutual benefit (Demetriou, 2010). For an effective implementation of CRM, KCA will need to adopt long term goals and objectives in terms of CSR and must ensure it fits in line with their corporate strategy.
The next step is to define KCA’s CSR agenda in order to assess initiatives that fit with the agenda. KCA needs to initially establish the demographics of their target market when finding the right charitable partner to form a long term relationship with. It is important that the social issue supported and promoted is also supported by its consumers otherwise, ‘scepticism arises when individuals evaluate an ethical dilemma they do not recognize the existence of, or the social problem the firm is acting to help remedy.’(Meigan & Farrell 2001)
CRM AND KCA CORPORATE BRAND IMAGE
KCA will need to assess the type of corporate image it desires to be associated with, and process identifying the right partner to engage in CRM with. The formation of a long term relationship is more than ideal, which can deliver more benefits than one off donations. KCA has engaged in one off donations during the Victorian Bushfire Appeal during its short term cause. However, this relatively short engagement with a socio environmental issue is shortly forgotten, or society remains unaware of KCA’s contribution.
Cause Related Marketing will allow for KCA to use their charitable efforts to improve their competitive standing within their own industry, which will inevitably impact upon their corporate brand.
A corporate brand is the image that consumers have over a corporation, where the experiences created by a company are associated with the emotional feelings developed by internal and external stakeholder groups (Gregory, 2004). As study results revealed that consumers were willing to switch brands to demonstrate their support to a brand linked to a cause or social problem (Demetriou, 2010), CRM can be utilized to sustain and enhance a positive corporate image or name, which has the potential to engage individual consumers mentally and physically with a corporation.
By effectively implementing CRM as recommended above, KCA can expect to strengthen its corporate brand image to its stakeholders, build public support and establish quicker and cheaper new product launches and brand extensions as a result. (Refer to Appendix D)
C) SOCIAL TOPIC INFORMATION: YOUR NEW ADVERTISING STRATEGY
Another way of reducing consumer scepticism towards CSR Advertising is by providing Social Topic information. Auger et al (2003) opines that ‘consumers often lack knowledge of social issues’. KCA’s current advertising strategy tends to base itself more on informative advertising, which refers to merely providing information about the CSR characteristics (New Machinery, processes or initiatives) or CSR managerial practices (like the CSR Report) of the firm. It is also important to acknowledge the fact that merely providing information is not enough but it is also important to persuade consumers to believe and be affected by such information. In this regard it is advised that KCA’s advertising appeals can focus more on informing consumers the critical gravity of the social issues they are tackling and what impact these issues can have on an individual’s day to day life.
Aircel, which is a major cellular service provider in India conducted the campaign “Save our Tigers” to highlight the dangerous situation of reducing number of tigers in India due to illegal poaching. And their advertising strategy (Refer Appendix E) is clear indication of their focus on creating awareness on the social/environmental issue of saving the decreasing Tiger population among the urban Indian rather than their own personal marketing. The enormous success of their campaign was largely attributable to the emotional quotient in their Ads, which created feelings of fear/concern and compassion in the consumers. From a theoretical perspective, the Aircel campaign may have been based on the Sick baby/Well baby strategy. Fine (1990) proposes that firms can use a Sick Baby/Well baby appeal strategy in framing their advertising message. Sick baby appeal, generally refers to the problem and focuses on the severity of the problem. Often the Sick baby appeal tends to convince the consumers that such a problem is insolvable and creates increased feelings of fear. It is at this point of time that a Well baby appeal comes in that conveys to the consumer’s that the problem that has been portrayed is not a insolvable one and also highlight what the company is doing to improve the baby’s wellness or reduce the problem and also how they intent to keep doing to continuously improve the health of the baby. Therefore, KCA could use such contrasting appeals in their advertising messages to subtly portray their continuous commitment to environmental issues, which would have a more enhanced impact among consumers.
D) INTERNAL ADOPTION OF CSR
In this quest for a socially responsible company, it is important that the process starts internally first. The lack of proximity between CSR activities and employees can become a barrier to deploy the effectiveness of CSR. Employees are the most vital resources of a company; they represent businesses ' brand ambassadors. As Gilbert (2008) puts it ‘employees are much more credible than a full page ad in the New York Times’. In order to achieve success with CSR, it is critically important to communicate sustainability to the internal stakeholder and ensure CSR programs are aligned with the company culture. The internal outcomes of CSR activity brings increased employee pride for the company, increased job satisfaction and hence deliver positive WOM to the society.
But fostering increased employee commitment to such issues can be a difficult task. Gareth Kane (2010) states the concept of ‘Institutional inertia’, which refers to the ‘force of will that pushes back any change within the organization whether it is for the better or the worst’. The root cause of such inertia is the fact that ‘Nobody likes change’. Thereby organizations have to overcome this inertia and they can do so through continuous staff engagement.
STAFF ENGAGEMENT
This basically involves continuous reinforcement and intervention to shift people from their current behavior pattern to something that you want. KCA has already been very active in this area through their ‘Employee participation program’, which involves financial donations from employees. But we believe that such a program is more designed to forcefully involve them rather than a free commitment to it.
Some ways in which staff engagement can be more productive is by making employees the standpoint of external communication to consumers. Such an initiative should firstly involve ‘awareness sessions’ that allows employees to keep abreast of all issues and what their company is doing in terms of CSR activities. Companies need to educate employees about the company’s current and future CSR programs in a clear and consistent approach. And also need to explain the reasons behind the CSR involvement, resources required to develop the CSR programs and the challenges and successes involved in such programs.
Secondly these employees need to be allowed to engage with consumers through either social networking sites or online forums or even through setting up stands outside malls. The crux of their interaction must involve 1) Answering consumer’s queries revolving around environmental and social issues 2) Communicating their current company efforts.
Moreover, to increase employees’ proximity to CSR programs, companies need to provide real meaningful opportunities for employees to participate in the CSR activities. Companies can do so by involving employees in co-creating CSR value, such as in planning, designing and implementing of CSR programs, making them active as participants (Bhattacharya & Sen & Korschun, 2007).
REFERENCES
Adkins, S., 1999. Cause related marketing: who cares wins, Butterworth-Heinemann.
Bhattacharya, C.B., Sen, S. & Korschun, D., 2007. Corporate Social Responsibility as an Internal Marketing Strategy. MIT Sloan Management Review.
Business Social Responsibility, BSR Conference (2008), A Global Approach to Internal CSR Communications, viewed 20thth May, 2010, <http://www.bsr.org/bsrconferences/2008/session-summaries.cfm?DownloadAction=Click&thisURL=/ClientFiles/BAS/Conference2008/Materials/BSR_Conf2008_A_Global_Approach_to_Internal_CSR_Communication
s.pdf&agenda_id=45> Chadha, A., 2009. From carbon to carbohydrates: Corporate strategies for biopolymer technology development. Journal of Commercial Biotechnology.
Crank, M. et al., 2004. Techno-economic feasibility of large-scale production of bio-based polymers in Europe (PRO-BIP). Final Report prepared for the European Commission’s Institute for Prospective Technological Studies, Sevilla, Spain, Utrecht, Karlsruhe: Universiteit Utrecht, Fraunhofer ISI.
Darby, M., Karni, E., 1973. Free competition and the optimal amount of fraud. Journal of Law and Economics 16, 67-88 Demetriou, M., Papasolomou, I. & Vrontis, D., 2010. Cause-related marketing: Building the corporate image while supporting worthwhile causes. The Journal of Brand Management, 17(4), 266–278.
DJSI (2009), Down Jones Sustainability Indexes, Sustainability Index, viewed 17th May, 2010, <http://www.sustainability-index.com> Drumwright, M.E., 1996. Company advertising with a social dimension: The role of noneconomic criteria. The Journal of Marketing, 60(4), 71–87.
European Bioplastics Frequently Asked Questions (FAQs) June 2008, viewed 2nd June, 2010, < www.european-bioplastics.org>
Gregory, J.R., 2004. The best of branding: best practices in corporate branding, McGraw-Hill Companies. Fine, S., 1990. Social Marketing. Allyn and Bacon, Inc., Boston Johnson & Johnson Annual Report 2008, Johnson & Johnson, viewed 19th May, 2010, <http://www.jnj.com/wps/wcm/connect/ad9170804f55661a9ec3be1bb31559c7/2008+Sustainability+Report.pdf?MOD=AJPERES>
Gareth Kane, G.2010, ‘The three secrets of Green business: Unlocking competitive advantage in a low carbon economy’, Earthscan publishers, London
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Kleercut (2009), Greenpeace 's Response to Kimberly-Clark 's Propaganda, viewed 17th May, 2010, http://kleercut.net/en/ResponsetoKC
McWilliams, A. and Siegel, D. 2001. Corporate social responsibility: A theory of the firm perspective. Academy of Management Review, 26: 117-127
Maignan, I.M., Ferrell, O.C., 2001. Corporate citizenship as a marketing instrument -Concepts, evidence and research directions. European Journal of Marketing 35 (3/4), 457-484. Mirchandani, D. & Ikerd, J., 2008. Building and maintaining sustainable organizations. Organization Management Journal, 5(1), 40–51.
Mohanty, A.K., Misra, M. & Drzal, L.T., 2002. Sustainable bio-composites from renewable resources: opportunities and challenges in the green materials world. Journal of Polymers and the Environment, 10(1), 19–26.
Procter & Gamble Sustainability Report 2009, viewed 19th May, 2010, <http://www.pg.com/en_US/downloads/sustainability/reports/PG_2009_Sutainability_Report.pdf> Song, X.M., Neeley, S.M. & Zhao, Y., 1996. Managing R&D-marketing integration in the new product development process. Industrial Marketing Management, 25(6), 545–553.
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APPENDICES
Appendix A
Competitor CSR Activities
Johnson & Johnson
Johnson & Johnson’s social responsibility and sustainable strategy is reflected in the Johnson & Johnson credo and its annual reports. In every five years, Johnson & Johnson set new long-term goals to reduce the impact of the environment. To reduce green washing, in 2006 they had introduced ‘Healthy Planet 2010 Goals’. Healthy Planet 2010 Goal categories: * Energy Use—Carbon Dioxide Reduction * Water Use * Paper and Packaging * Waste Reduction * Product Stewardship * Environmental Literacy * Transparency * Biodiversity * Compliance * External Manufacturing
(J&J Sustainability Report, 2008)
Johnson & Johnson is one of the only two multinational companies to receive the World Wildlife Fund 's prestigious Golden Panda Award. Johnson & Johnson Family is highly committed to environmental excellence, aiming to deliver the highest environmental values to employees and the community. Approaching to climate changes Johnson & Johnson adopted the “Climate Friendly Energy Policy” in 2003 and in term of wellness and prevention for employees Johnson & Johnson acquire Human Performance Institute help to achieve health goals.
Johnson & Johnson has a large international and global sourcing presence for human rights which they had established a ‘Global Labour and Employee Guidelines and a Policy on Employment of Young Persons’.
Unilever
In promoting sustainable development and reducing the environmental impact in manufacturing, Unilever conducts a lifecycle analysis of their products in order to seek opportunities to reduce demand for energy and materials. Through addressing sustainability issues and strategies, Unilever also works with global partners includes UN World Food Programme, Global Alliance for Improved Nutrition, World Heart Federation, FDI World Dental Federation and Public-Private Partnership. (Unilever Sustainable Development Report, 2008)
Furthermore, Unilever introduced a Lamplighter program to help employees to track and improve their health, to create a better healthier team for the company. In term of world and community area, Unilever as a co-founded of the Project Laser Beam, partnership with the UN World Food Programme aim to helps child that are hunger and malnutrition in countries such as Bangladesh and Indonesia. Unilever also focus on product innovation technology, sponsoring a project for the implementation of sustainable packaging and Cleaner Planet Plan to reduce future environment impact.
Procter & Gamble (P&G)
Procter & Gamble deliver its social responsibility through five sustainability strategies: 1. Product 2. Operation 3. Social Responsibility 4. Employees 5. Stakeholders
In term of educating the employees, P&G introduce “Take the R” (Responsibility) program to continuously engage and educate employees to sustainable workforce behaviour in the long run.
In P&G’s product innovation, for every category, P&G have team of experts working in packaging sustainability and carry out its Environmental Quality Policy to ensure to provide a safer product, packaging and operations to the employees, consumers and the environment.
P&G focus its social responsibility through implementing P&G Live, Learn and Thrive signature programs over 50 countries, including Australia to help children between ages 0-13.
Live, Learn and Thrive Programs includes: * Pampers and UNICEF: Working Together for Healthy Babies * P&G Beauty’s Aqua Collection: Supporting Children’s Safe Drinking Water Program * P&G and Shiksha: Increasing Access to Education in India * Always and Tampax: Protecting the Futuresof Girls
(P&G Sustainability Report 2009)
Appendix B
European Bioplastics estimates that in 2007, all bioplastics applications comprised approximately 75,000-100,000 tons of the total 48 million ton European plastics market. Annual growth is considerably higher than 20%. Global production capacity will quadruple from nearly 300,000 tons today to well over a million tons by 2011.
Investment is occurring across all areas – in compostable bioplastics such as starch blends and PLA, but also in new polyesters such as PHA, which are due to become commercially available at the end of 2008. If all these announcements come to fruition, global production capacity will quadruple from nearly 300,000 tons today to well over a million tons by 2011. EBP – European Bioplastics
Source: European Bioplastics
Appendix C – Unilever Adoption of HDPC
Unilever Australia has already started integrating bio-degradable materials during the production of its products. Biodegradable products ingredients are considered to be more significant when diverging in the interest of the environment. Furthermore, Unilever has adopted HDPE (high density polyethylene) thermoplastics for their packaging material. Despite this type of material originating from petroleum, it falls under “2” of the SPI Resin Identification Coding System. HDPE is most commonly recycled, and the label “2” enables identifying the polymer type for recycling purposes.
KCA should consider intertwining HDPE within its own product packaging policies, corresponding with the above recommendation. Eliminating waste and consumption of raw materials through reduction and recycling along with biopolymer technology can only enhance KCA’s corporate image, as well as encourage acceptance and credibility of KCA’s CSR activities.
Appendix D -Gregory J. R. ‘The Best of Branding: Best Practices in Corporate Branding.
How CRM can Enhance Corporate Brand Image * The existence of a strong corporate brand can attract and inspire employees, stakeholders and business partners. * Strong Corporate brands build public support and provide goodwill for an organization * New product launches and brand extensions are cheaper and can be implemented more quickly. * Financial performance and value creation are also enhanced.
Appendix E: Aircel ‘Save tigers’ campaign
An example of above suggested strategy in use: Aircel India, which is a major Indian cellular provider, came up with this campaign that had an instant success. And their advertisement clearly represented that the focus is on the cause rather than the brand itself. Also their advertising message of showing a lonely tiger wandering in the woods communicates a Sick baby appeal that has led to increased consumer concern in India and consequent recognition for Aircel.
Appendix F
PESTL ANALYSIS
Political/Legal
In Australia and around the world, corporate social responsibility (CSR) has become a significant phenomenon and act as a key operational elements within the organization. The political situation can play an important role of what is expected from the companies regards to CSR.
Australia is one of the countries that have the strictest regimes of environmental regulation. The World Economic Forum 's Global Competitiveness Report 2007-08 ranks Australia 16th out of 125 nations for the overall stringency of its Environmental Regulations.
Environmental Regulations 2007 (1, 2) Country | Overall stringency of environmental regulations | Germany | 6.4 | New Zealand | 5.8 | Japan | 5.7 | Singapore | 5.6 | United Kingdom | 5.5 | France | 5.5 | Australia | 5.5 | Malaysia | 5.2 | Taiwan | 5.1 | United States | 5.0 | Source: The Global Competitiveness Report, 2007-08, World Economic Forum.
Australian government uses various legislations to govern the environment and social responsibility aspects. Examples of the environmental laws include The Environment Protection and Biodiversity Conservation Act 1999, National Environment Protection Council Act 1994, National Greenhouse and Energy Reporting Act 2007. Additionally, the social and responsibility laws include Occupational Health and Safety Act 1991 and Racial Discrimination Act 1975.
Economic
Due to the current economic conditions, it had made CSR more challenging and requires social programs to support the community more than ever before. However, a recent study from the Australian Centre for Corporate Social Responsibility shows that despite the downturn of the economy, Australian companies are still expanding the investment in CSR programs. A downturn provides an opportunity for companies to leverage greater non-financial resources (Lau, 2009).
Dow Jones Sustainability Indexes and FTSE4Good Index Series are designed to measure and track financial performance of leading sustainability-driven companies. FTSE4Good Index includes: environmental sustainability, human rights, supply chain labour standards, anti-corruption and Climate
change.
Social
The increasing social trends towards CSR are due to the strong requirement of accountability and transparency by the key stakeholders internally and externally. Results from Manpower 2009 Corporate Social Responsibility Survey, shown significant differences in CSR participation related to size of the organization in Australia and New Zealand. In the economic downturn, the larger the organizations were more likely to participate in CSR practices. This is mainly due to large organization can benefit from their reserve finance and volunteer resources that enable them to participate in CSR activities.
Organizations’ policies that are related to CSR may impact on their commitment to CSR activities and participation. The Manpower 2009 Corporate Social Responsibility Survey again shown companies with formal polices will have better and higher external and internal accountability for participation in CSR activities than the informal or no policies companies. CSR helps companies to build trust and reputation to the stakeholders, which act as a long term completive advantage for the company brand.
Source: Manpower 2009 Corporate Social Responsibility Survey, April 2009, Australia and New Zealand
Environment
Increasing global concern about the environment for human habitation and preserving scarce resources had forced companies to become more aware about the current environmental issues, the implementation of environmental systems and development programs to help to combat the conditions. Hence, many companies had begun to focus on the improvement of their current value chain and CSR strategy.
Technology
Due to the rapid depletion of raw materials, it leads to the increase of crude oil prices which then impacts on the plastics industry, these incremental costs can be very difficult to transfer to consumers. However, with the increasing development and trend towards the adoption of biodegradable technology, which is a new type of degradable packaging that allow plastic to biodegrade within few years. Datamonitor Group forecasts biodegradable trend in food and packaging will accelerate in the future years, which not only benefits the society but also reduce costs in the long run for companies.
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