Lessons in Sustainability: Marketing

You see it everywhere nowadays. When you’re standing in line at the supermarket. When you’re streaming your favourite shows online. On billboards, at the airport and in the metro. Sustainability marketing. As consumers demand more responsible products and more responsible practices, brands big and small are eager to communicate what they are doing on sustainability. Smart leaders are turning action for people and the planet into a key differentiator that can give a competitive advantage and drive profits.?

In 2021, Forbes magazine proclaimed that ‘sustainability is the new digital’. In an article on the evolution of marketing, one CEO emphasizes the importance of sustainability communications, calling it a priority as customers can even put sustainability ahead of price when making a choice. One?cited study says that 79% of consumers change their purchase preference based on a product’s social or environmental impact. There’s just one catch – businesses have to actually take action on sustainability. This opens the door for businesses to do well by doing good.?

Over the last five years, the Hoffmann Global Institute for Business and Society has worked with our Marketing academic area professors to integrate sustainability into marketing research and learning so every INSEAD graduate can walk the talk on sustainability.?

In this edition of Lessons in Sustainability, we share how the Marketing area incorporates sustainability into academics as part of a series that explores sustainability across the nine INSEAD academic areas.?

Aligning Values, Building Trust

Marketing is fundamental to business. It is the activity of understanding customer needs, developing suitable product-service offerings, and promoting and selling them by making them accessible. This is a core function of any business and a foundational element of the global economy. At INSEAD, the Marketing academic area, thus, looks at marketing as more than just a business function. It is a way to see the world through the customer’s eyes and recognize the opportunities for profitable growth in a rapidly changing business environment. In the sustainability era, opportunities are opening from enhancing the well-being of people and the planet.?

To capitalize on these emerging trends, businesses need to take action on sustainability and communicate the initiatives and their outcomes to current and potential customers. Marketing can integrate authentic, meaningful sustainability activities into a brand’s identity and build trust that drives long-term profitability. Demonstrating positive impact that aligns with customer values is emerging as a powerful dynamic to connect with consumers.?

The Marketing academic area features?an innovative, multi-disciplinary, research-based group of faculty, many focused on sustainability-related issues. They educate the next generation of leaders with world-class teaching materials and classroom experiences. They connect with current business leaders through seminars, webinars and alumni engagement.

Conversation with the Chair

To better understand how INSEAD incorporates sustainability into the academics of marketing, we sat down with Area Chair, Professor Amitava Chattopadhyay. He shared the work of area professors and how sustainability is integrated across academics and engagement.?

Why is it important for future business leaders to learn about sustainable development practices?

Professor?Chattopadhyay: Several reports indicate that consumers care about sustainability and are willing to pay for truly sustainable offerings. Younger consumers, Gen Z in particular, are more likely to express this opinion, and in the coming years these more concerned consumers will come to dominate consumer spending. Thus, sustainability isn’t something that is “good to have” but is “necessary to have” to compete effectively. As one senior executive put it during a discussion, not considering sustainability as an integral part of one’s strategy today is akin to not doing any R&D and hoping to remain competitive. It is important to realize that consumers, and younger consumers in particular, are not taken in by greenwashing, as they are more likely to examine the veracity of sustainability claims. This further highlights the importance of integrating sustainability into business strategy.

What does sustainability mean to you in the context of business education?

Professor?Chattopadhyay: In the context of business education, we need to convey three interrelated ideas. First, sustainability is not just a moral imperative but a business imperative. Second, sustainable strategies deliver both impact and profit, and there is mounting evidence for this. Third, we provide frameworks for thinking about and integrating sustainability into business strategy.?

In achieving these objectives, marketing plays a crucial role. Sustainability is a very big word, and to different people or organizations, this word brings to the fore different material priorities. For some, the priority could be reducing carbon emissions, for others the efficient use of natural resources, for others recycling or deforestation, and for still others poverty alleviation, women’s rights, or human rights for all. It is important to understand what the target customer segment of your business, be it individual consumers or business customers, care about in terms of sustainability and then build these into one’s offerings. Doing so will lead to traction with the target segment and drive scalable, impactful and profitable growth.

How do you teach sustainability in your academic area and what are the main topics?

Professor?Chattopadhyay: Sustainability is integrated into Marketing core courses and electives for MBA and MIM students. We use innovative tools like VR and teach using cases that look at popular brands and businesses spanning commodities, healthcare, education, fast moving consumer goods, fashion and luxury goods. In executive education, we help business leaders stay at the forefront of dealing with the challenges of a sustainable business.

Cases in the Classroom?

After hearing how sustainability marketing is increasingly important for brands and companies, the Hoffmann Institute reached out to professors to see how sustainability features in their classes and research.?

Marketing area professors are using sustainability in core curriculum courses and in electives. In MBA and MIM core courses, Professor Paulo Albuquerque discusses sustainability and social impact topics using two INSEAD cases – the Does a Brand Need a Purpose? Unilever Hellmann's versus Kraft Heinz Mayonnaise?case he co-authored and Algramo: Smart Purchasing written by other INSEAD authors. Both cases explore the competitive advantage of social purpose and positive impact.

For MIM students, Professor Rupali Kaul teaches core marketing courses and practicums that emphasize the ethical dimensions of marketing, focused on sustainability and social responsibility. Professor?Abhishek Borah uses three cases to teach marketing. The first looks at Patagonia and its business model. The second case uses Algramo as a model of how a company can lower the poverty tax using sustainable products. The third case explores how organizations can deploy a circular economy model.

With electives, MBA and MIM students dive even deeper into aspects of marketing that use sustainability examples or educate on sustainability. For example, Professor Ziv Carmon leads a customer insight elective exploring behaviour nudges to encourage action on sustainability. This is underpinned by research co-authored by Professor Carmon, including a case on Habits to Save our Habitat: Using Habit Psychology to Promote Sustainability. His case Mobility as a Service (MaaS): The Importance of Transportation Psychology, explores the positive social benefits of MaaS models.?

Area Chair Professor Chattopadhyay delivers a Business Strategies for Impact and Profit elective that uses his VR simulation, Shea Seeds. The elective focuses on transforming a CSR project to a sustainable supply chain, with impacts for over 300,000 women shea collectors in West Africa living on less than a dollar a day at the base of the shea supply chain. Students learn strategies that can improve income, social standing and self-worth, while forging strong, long-term client relationships in the food and cosmetics space.?

Professor Pierre Chandon offers an MBA mini-elective titled The Body Business: Understanding Food and Wellbeing, which examines how business impacts health and wellness. Leading the INSEAD-Sorbonne University Behavioural Lab, his research guides businesses looking to balance profitability and people’s health with multimedia case studies on topics such as Candy Crush? Aligning Health, Business, and Pleasure in the Chocolate Industry and The Carrot Rewards Wellness App: Innovating in the Behavior Change Market.?

Electives delivered by Professor David Dubois include Value Creation in Luxury and Fashion with a full session featuring speakers on sustainable fashion and Digital and Social Media Strategy, which analyses brand reputation on sustainability using social media analytics. These concepts feature in the Leading Digital Marketing Strategy executive course, which guides leaders integrating sustainability into business models and communication.?

Professors Stephanie Lin and Hilke Plassmann also teach an MBA elective that shares concepts with executive learning. The Caring Consumption elective covers consumer decision-making and influencing society to be more sustainable in health, environment and social equality. For executives, topics of behaviour change in health and environmental sustainability applies to consumer communication and corporate culture.

INSEAD Professors of Marketing are thought leaders in the sustainability space. They are engaged in research on crucial topics that encourage leaders to take action on sustainability and share that action to improve business reputation. Groundbreaking research is brought into the classroom and promoted widely on INSEAD Knowledge and other engagement channels.

Moving Forward

More than just a core function of a business, marketing is the link between a business and its customers, enabling the building of brand reputation and relationships while driving profitability and growth. As sustainability and responsibility emerge as consumer demands, marketing plays a pivotal role in integrating sustainability into business strategy, creating a competitive advantage for long-term, profitable growth and impact.??

In areas from human health to planetary protection, INSEAD Marketing professors are helping leaders understand how communicating sustainability action can be a force for good for society and for their bottom line.??

The Hoffmann Global Institute for Business and Society Lessons in Sustainability series highlights lessons learned from integrating sustainability into all nine INSEAD academic areas. Stay tuned for more Lessons in Sustainability.