accountability and sustainability: evaluation of corporate practices vesna Žabkar, ph.d. tosee, may...

Accountability and sustainability: evaluation of

corporate practices

Vesna Žabkar, Ph.D.

ToSEE, May 14, 2015

Definition of (marketing) accountability

American Marketing Association (2005, p. 1):

“The responsibility for the systematic management of marketing resources and processes to achieve measurable gains in return on marketing investment and increased marketing efficiency, while maintaining quality and increasing the value of the corporation”.

Defining sustainability

Ability for long-term maintenance (environmental, social equity and economic demands - the 3 Es).

‘the consumption of goods and services that meet basic needs and quality of life without jeopardizing the needs of future generations’ (OECD, 2002).

Market capacity & resource capacity problem

From activities to performance

ORGANIZATIONS’ EXTERNAL

ACTIONS (“what they do”)

PERCEPTUAL/ UNOBSERVABLE

MEASURES (“what customers

thnk”)

BEHAVIORAL OUTCOMES/

OBSERVABLE MEASURES

(“what customers do”)

FINANCIAL PERFORMANCE

of the organization

(“what they get”)

Source: Gupta, S. and V. Zeithaml (2006). "Customer Metrics and Their Impact on Financial Performance." Marketing Science 25(6): 718.

From activities to performance

ORGANIZATIONS’ EXTERNAL

ACTIONS (“what they do”)

PERCEPTUAL/ UNOBSERVABLE

MEASURES (“what customers

think”)

BEHAVIORAL OUTCOMES/

OBSERVABLE MEASURES

(“what customers do”)

FINANCIAL PERFORMANCE

of the organization

(“what they get”)

Source: Gupta, S. and V. Zeithaml (2006). "Customer Metrics and Their Impact on Financial Performance." Marketing Science 25(6): 718.

From activities to performance

ORGANIZATIONS’ EXTERNAL ACTIONS (“what they do”)

PERCEPTUAL/ UNOBSERVABLE MEASURES

(“what customers think”)

BEHAVIORAL OUTCOMES/ OBSERVABLE MEASURES

(“what customers do”)

FINANCIAL PERFORMANCE of the organization (“what they

get”)

Source: Gupta, S. and V. Zeithaml (2006). "Customer Metrics and Their Impact on Financial Performance." Marketing Science 25(6): 718.

From activities to performance

ORGANIZATIONS’ EXTERNAL ACTIONS (“what they do”)

PERCEPTUAL/ UNOBSERVABLE MEASURES

(“what customers think”)

BEHAVIORAL OUTCOMES/ OBSERVABLE MEASURES

(“what customers do”)

FINANCIAL PERFORMANCE of the organization (“what they

get”)

Source: Gupta, S. and V. Zeithaml (2006). "Customer Metrics and Their Impact on Financial Performance." Marketing Science 25(6): 718.

Customer impact

1. Customer awareness

2. Customer associations

3. Customer attitudes

4. Customer attachment

5. Customer experience

Sustainability as marketing’s superphenomena

“Sustainability has been creeping up on Eric Fromm’s homo consumens for a long time (Kotler 2011). Marketing has well-known negative impacts.

It encourages rapid consumption of limited natural resources,

it does not restrain the wants it encourages, and

it over-fulfills materialistic wants and under-serves nonmaterial wants”

Source: Achroll, Kotler, 2012

Business side of sustainability

Market for sustainability

Increased profits

Reduced employee turnover

Improved productivity

Generating competitive advantage

Accessing capital

Better brand recognition and loyalty

The new horizon for management

Accountability & sustainability

Customer care with long-term

interests

Cost accounting featuring nature

costing

Decision calculus with commitment to managerial values

Customer care with long-term interests

(1) Proactively communicating the harmful side-effects of wasteful consumption

(2) growing segments of environmentally conscious consumers

(3) demarketing/countermarket ing certain products, technologies

Vesna.zabkar@ef.uni-lj.si