Predominantly, marketplace social responsibility issues include integrity in governing the life cycle of the product which includes sourcing and producing (supply chain practices), marketing and promotion, disposing, privacy and technology issues, drug pricing for the poor and the elderly.
Table of Content
- 1 CSR Marketplace
- 2 Broad Issues of CSR Marketplace
- 3 Benefits of CSR Marketplace
- 4 Designing Marketplace CSR Activities
The scope of marketplace practices also includes environmental responsibility, an organisation’s relationship with its competitors, an organisation’s responsibility (or lack thereof) to pay “fair trade” prices that will sustain poor suppliers and to pay compensation for past harms.
Broad Issues of CSR Marketplace
- Disclosure of Labelling & Packaging
- Marketing & Advertising
- Integrity of Product Manufacturing & Quality
- Distribution & Selling Practices
Disclosure of Labelling & Packaging
Provide complete and accurate information of ingredients/components of a product. For instance: McDonald’s Corporation misled the Indian consumer by labelling their beef flavouring as ‘natural flavour’ which hurt the sentiments of the pure Hindu vegetarians3 .
Enterprises must extend absolute product responsibility with reference to product safety and usage. For instance, Cadbury reviewed its safe packaging practices to ensure complete safety.
Avoid deceptive and anti-competitive pricing or high pricing of products especially in case of life support products like drugs and other necessities (Serpell & Garner, 2000). For instance, high prices of life saving drugs for AIDS make it unaffordable for the poor and results in increasing infections4
Marketing & Advertising
Avoid circumventing or deceiving the customer or promoting offensive advertising (Serpell & Garner, 2000). For instance advertisements related to cosmetic products like creams, shampoos and so on mislead the customer about benefits of the product or Thumps up/ Sprite commercials displaying stunts without any consumer warnings promote risky activities amongst children and adolescents.
Integrity of Product Manufacturing & Quality
Includes responsibility of the company to produce high quality products with essential manufacturing standards. For instance, Coca-cola’s lapse in manufacturing standards resulted in pesticides in their soft drinks and contaminating the groundwater of the communities (Galliara, n.d).
Distribution & Selling Practices
Includes distributing and selling the products through ethical means and avoid high pressure selling (Serpell, Garner, 2000) For instance, Nestle infant formula product distribution included nurses on commission to promote their baby milk products. (ICFAI, 2004).
Benefits of CSR Marketplace
CSR at marketplace offers long-term sustainability for business. Its varied benefits range from providing risk management to increasing the credibility of the organisation in the minds of the stakeholders.
- Risk Management
- Product Differentiation/ Product Recalls
- Customer Loyalty
- Increase in Public Credibility
- Global Marketplace Advantages
- Technological Innovation
- Improved Financial Performance
Companies can safeguard themselves from lasting damages by implementing their market place social responsibility. When companies misrepresent their products or use unethical selling practices it affects their sales and brand credibility (Serpell & Garner, 2000).
For instance Infosys has always worked on strengthening its cash a management model in spite of strong criticism for letting go acquisition opportunities at the end of the last millennium. It conservative financial outlookCompanies can safeguard themselves from lasting damages by implementing their market place social responsibility.
When companies misrepresent their products or use unethical selling practices it affects their sales and brand credibility (Serpell & Garner, 2000). For instance Infosys has always worked on strengthening its cash a management model in spite of strong criticism for letting go acquisition opportunities at the end of the last millennium.
It conservative financial outlook allowed it to mitigate financial risks during the global meltdown of 2008. When arch rival HCL Technologies beat the Infosys offer to acquire Axon in the year 2008 and thus enter the western European market, Infosys stood firm on its degree of affordable risk (DAR). Infosys responded in 2012 with the acquisition of Lodestone to regain status quo at a lower financial risk.
Product Differentiation/ Product Recalls
In the year 2009, Tata Motors had unveiled the dream project of its Chairman, Ratan Tata. Tata Nano-the people’s car, was launched at a sub onelakh and ushered in the concept of Gandhian engineering. It allowed distributors to assemble parts and tools to deliver the car to customers at zero lead-time.
Customers are becoming increasingly demanding. As price and quality become more equal, they are looking towards brand values, which match, their own, and companies whose activities they can respect.
For instance M&S conducts constant researches to know more about their customers’ evolving needs. One of their most recent researches, published in their M & S report 2014 states that their global sales has been increased by 22.8 percent and except business to take lead in adopting CSR practices.
Increase in Public Credibility
Infosys was the first Indian company to comply with the Sarbanes –Oxley Act of the US government. It has also been widely known to encourage voluntary disclosure and thus reduce the trust deficit between the company and its shareholders.
Global Marketplace Advantages
Entry and success in new markets becomes easier because of three major reasons: a) higher accountability of the company helps in establishing direct relationships with key customers and business partners across the globe. b)
It contributes to innovation in product development and delivery thus providing an edge in the market. c) It helps in mitigating potential negative media coverage, and enhances market presence, all of which facilitates expansion into new markets (Radley.Y, 2004).
Many companies are investing in research and development to build systems and processes that will reduce/minimise pollution and liabilities which consequently reduce their operational and environmental costs (Radley.Y, 2004).
For instance, Kansai Nerolac Paints Ltd (KNPL) has developed technology to reduce the usage of steel barrels used for the storage of raw material. The steel saved by this initiative amounts to 137332 kgs. (Kansai Nerolac Paints Ltd Sustainabiltiy Report, 2013).
Improved Financial Performance
The effect of integrating market place accountability and responsibility directly contributes to the increased public image. Investors increasingly wish to invest in companies which are sustainability oriented and have developed a triple bottom line approach (Radley.Y, 2004).
Designing Marketplace CSR Activities
To design marketplace CSR activities the following steps need to be followed:
- Conduct review to identify the current market place polices within the organisation and identify strengths and weaknesses of your policies.
- Conduct surveys to identify the needs, feedback and satisfaction levels of customers, suppliers and business development agencies to identify their expectations from your organisation.
- Design new policies based on the findings of step (i) & (ii) by engaging relevant stakeholders.
- Design procedures and targets to implement the new policy.
- Formulate teams and train them to implement, monitor and report CSR activities at market place.