Sustainable market orientation

The issues raised in these traditional self-motivated approaches pave the way for a new wave of concepts and theory.

Ecological economics promotes preserving natural capital with emphasis on sustainability and sustainable development.[6] The potential negative impacts of creative destruction and tragedy of the commons are central to what ecological economics addresses, specifically the earth's carrying capacity.[7] Self invested firms without sustainable practices no longer have a place in the modern corporate world.

In terms of marketing, this shift has led to the development of concepts trying to promote and incorporate these ideas see: green marketing, triple bottom line, sustainability marketing, sustainability brand,and CSR. This shift towards adopting sustainable practices is both consumer and company driven.[8] Governments are also looking for more long run approaches towards the achievement of sustainability.[9] The Brundtland Commission or Our Common Future which was published in 1987 from the United Nations World Commission on Environment and Development. It is crucially important to the conceptualisation of SMO and is commonly seen as defining sustainable development. It has been the catalyst for the emergence of work on sustainability. It signaled the surfacing of issues regarding sustaining the environment as critical to international governance.[10]

Theoretical foundations for SMO have come from three prior sustainable marketing models.

"Socio-ecological market orientation" is the first theory that has led to the conceptualisation of SMO.[11] Social and ecological problems that arise from a free market approach could be mitigated by developing a framework of social, political, economic and ecological norms agreed upon corporations and society that govern the marketing based economy. However, it has a focus on corporate environmental marketing management, as opposed to sustainability and this concept relies on government regulation to ensure compliance.

A second, academically popular, approach relates to green corporate marketing strategies and lifecycle ecological management of product and service management.[12] However, this approach, whilst recognising the importance of incorporating environmentally responsible management fails to incorporate social, economic and environmental management aspects that are paramount to sustainable development.[2]

A third approach to sustainable marketing is using a macro marketing approach to sustainable corporate marketing. This criticises the traditional micro and short term economic strategies and its lack of consideration for externalities and costs associated with environmental deterioration. What is fundamental to this approach is that despite company restraints, sustainable marketing practices can improve efficiency within corporations and looks to trade off between commercial and environmental concerns.[13]

Market orientation has several definitions; Narver and Slater[14] discuss MO in terms of culture and the fundamental characteristics of the organisation. Kohli and Jaworski,[15] 1990 refer to MO as the organisation wide information generation and distribution and the appropriate responses to this information considering current and future customer needs. Key components of MO include market intelligence gathering and synthesis of market information to develop and implement competitive profitable marketing strategies.[16] A market oriented business knows that to maximise its long-run performance it must build and maintain long-running mutually beneficial relationships and be effective in creating sustainable competitive value for their customers.[14]

It has been noted MO has a need to address the interests of a spectrum of social, political and business (environmental) stakeholders by corporate management.[16] Its current emphasis places internal corporate dynamics as the way to achieve efficiency and profitability. The combination of MO's emphasis on internal corporate dynamics with an added reliance on long-term external social and ecological interactions creates the concept of SMO. SMO allows companies to build on advantages gained through an MO strategy to create a greater alignment of long-term commercial performance with the interests of a wider range of stakeholders.[2] The model of corporate SMO provides for a more comprehensive, stakeholder based approach to corporate management.

An early version of sustainable marketing was proposed by van Dam and Apeldoorn[13] through the combination of ecological marketing, green marketing and sustainable marketing, resulting in the concept 'environmental marketing'. Furthermore, Kilbourne, McDonagh and Prothero[17] recognised the dilemma of corporate reliance on the dominant social paradigm and micromarketing. A new marketing paradigm in which macromarketing takes the central role was suggested with the emphasis placed upon business embeddedness in social relationships.[2] It was said corporate marketing management should manage economic, social, cultural and environmental considerations, however marketing practitioners focused on green marketing and overlooked these broader social and environmental responsibilities required.[2][13] This is where macromarketing literature distinguishes MO from SMO. SMO combines the pursuit for economic benefits with the alignment of corporate marketing activity with social and environmental norms[18] and offers a more comprehensive framework for sustainable marketing.[2] The framework is supported by social, environmental and economic responsibilities.[2]

As early as 1969, Lazer[19] recognised a need to bridge the gap between the profit motive and social responsibility. Orlitzky, Schmidt, and Rynes[20] found corporate social performance and corporate financial performance are interlinked. MO holds little commitment for corporations to meet the social and environmental expectations of society. The importance of the combination of corporate social and economic responsibility with environmental responsibility is accounted for in the SMO model thus providing a more holistic approach to corporate marketing management.[2]

The MO paradigm guides corporate management with narrow ecological and environmental prescriptions. Sustainable development literature extends MO's parameters with less observance towards the dominant social paradigm and economic performance.[2][21] In the past conceptualisations of sustainable corporate management and sustainable marketing have often focused on the micromanagement of ecological issues. This only recently has been developed past these views.[11][13] SMO moves towards corporate marketing meeting market expectations of the responsible application of resources, environmental and social responsibility.[2]

Hult and Tomas have developed further the issue of sustainability, with regards to market orientation. They highlight that in order for an organisation to achieve market-based sustainability they must strategically align themselves with both the consumers wants and needs of a market-orientated product and the interests of the multiple stakeholders concerned about the social responsibility issues involving economic, environmental (ecological), and social dimensions.[23] There is also great emphasis on the importance of the Bruntland Report as the underlying backdrop for both academic and managerial work on sustainability.

SMO is becoming increasingly prevalent in the tourism industry with a shift from economic profit priorities towards sustainability and a sustainable tourism marketing model.[24] The emergence of this shift towards sustainability includes the concept of sustainable development put forward by the Brundtland Commission and the preservation of the environment for future use.[25] The sustainability approach adopts an integrated view of marketing, the consideration of social equity, environmental protection, and economic liveability. This paradigm shift traces the evolution of marketing approaches from a consumer oriented basis towards societal, causal, green, relationship marketing alongside the consideration of the triple bottom line.[24] Empirical research into the practical application of the SMO as a management model in the New Zealand tourism sector \found alignment of the SMO model alignment in the strategy management of a government conservation agency and tourism SMEs. The researchers recommended replication research and evaluation in other sectors and countries.[26]

Alongside tourism, the forestry industry is adapting to the paradigm shift and moving towards the embodiment of the principles of sustainable forest management. This industry recognises its responsibility to future generations and the environment. There are many other industries that could benefit from sustainable practices demonstrated in the forestry industry.[27]

Climate change is already affecting the agriculture sector. The net effect of climate change on world agriculture is likely to be negative, although some regions and crops will benefit, most will not. Adaptation play a significant role in reducing the climate change negative impact on agriculture and increase benefit from climate change (Easterling 1996). Producers can adapt by changing seeding dates, Dynamic fertilization and irrigation applications, and switching one crop to another according to climate changes (Barklacich and Stewart 1995).