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Economic Inequality and Environmental Degradation

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Added on  2021-07-20

Economic Inequality and Environmental Degradation

   Added on 2021-07-20

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Introduction 2787
Today, more than ever, increasing inequality and natural degradation
make the transition to a more sustainable economic system more vital
(Geissdoerfer, Vladimirova, & Evans, 2018). Within the last decade more and
more multinational organisations adopt environmental policies and strategies
through their global supply chains in an attempt to make their business more
sustainable (Dauvergne & Lister, 2012). Due to this fact, organisations are
turning their conventional marketing thinking into sustainability marketing
which is based on building sustainable relationship with the customers and
the social and natural environment (Belz & Peattie, 2009).
According to Wells (2013) one major principle that organisations should
incorporate in their business model to achieve sustainability is ethical
sourcing. However, many people believe that there are no ethics in business
and thus they cannot take morally acceptable actions (Crane, Matten, Glozer,
& Spence, 2019). But many multinational organisations such as Starbucks
argue that they follow ethical practices (Starbucks, 2021c).
It is quite important for organisations to promote ethical concepts, as
they have a major impact on society through various ways. One of them is
marketing which nowadays must create social benefits (Laczniak & Murphy,
2006). Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for
customers, clients, partners, and society at large (AMA, 2017). Also, there is a
specific type of marketing researching such concepts which is called social
marketing.
Economic Inequality and Environmental Degradation_1
Marketing plays a major role in society informing people about products
and services and makes the economy keep evolving. Furthermore, it has a
big impact on people’s behaviour and cultivates values and principles. Hence,
it is vital for organisations to develop and promote a more ethical marketing
(Cohan, 2001). This could be achieved by promoting ethical values and
morals and have people as priority (Laczniak & Murphy, 2006).
As mentioned above Starbucks is a multinational organisation that
claims to follow ethical and sustainability approached. In 2018 the
organisation won an award for the 12th consecutive year from the Ethisphere
Institute of being one of the World’s Most Ethical Companies (Starbucks,
2018). However, the company has been accused for applying not so ethical
practices in the past, such as tax avoidance (Campbell & Helleloid, 2016).
Due to the controversial opinions on Starbucks policies, this essay attempts to
analyse the company’s approach to ethics and sustainability marketing and
make recommendations for a sustainability marketing mix and marketing
strategy. It starts with an overview of Starbucks' history and stakeholders.
Then, using theoretical concepts it attempts to analyse Starbucks
sustainability marketing approach in terms of social and environmental issues
and the consumer’s interpretations of the company’s actions. Finally, this
essay attempts to provide recommendations of the company’s future
marketing strategy by using the marketing mix.
The company and the challenges that it faces
Economic Inequality and Environmental Degradation_2
Sustainability has been a controversial issue in the coffee industry for a
long time. Although it is one of the world's most popular beverages, it can also
cause environmental issues such as water resource consumption,
greenhouse gas emissions, plastic pollution, and other environmental issues
(Ncausa, 2018). Critics have primarily focused on the product supply chain,
specifically the coffee life cycle, from cultivation, production, and
manufacturing to the stage of product packaging (Bridges and Wilhelm, 2008).
This view supported by Boydell (2018) who argues that the coffee industry
faces complex challenges including climate change, affordable coffee prices,
gender inequality and rampant child labour.
Starbucks is one of the biggest coffee retailers and roasters in the
world. The first store opened in 1971 and today is operating in more than 80
countries with more than 32,000 stores. By being present in all over the world,
the company claims that it is committed to create a positive global and social
impact. More specifically, Starbucks promotes ethical sourcing and use of
sustainable products by helping the farmers and suppliers and purchasing
ethically the high quality products they provide. Furthermore, the company
argues that they provide equal opportunities for work and education as well as
minimise their environmental footprint (Starbucks, 2021d). In 2020 Annual
Report the company argues that it delivers benefit to all of the stakeholders
worldwide, including employees, business partners, customers, suppliers,
shareholders, community members and others (Starbucks, 2020).
Although Starbucks presents an ethical profile, it faces several social
challenges such as unfair prices, low salaries, racial discrimination and
Economic Inequality and Environmental Degradation_3
others. A recent study by Cramer (2020) shows that black baristas at
Starbucks earn $1.85 an hour less than white baristas. Racial discrimination
has affected Starbucks' reputation as well as received people's negative
reactions. Another social issue of concern is the provision of child labour in
supply chain management. Although Starbucks states that no one under the
age of 15 can be hired, it allows exemptions for family-owned businesses and
small businesses. Experts said Starbucks lost its trademark in the animal
rights and factory feed categories because the meat it sells is not certified
organic and it has no claims about genetically modified organisms (GMOs) in
animal feed (Ethical Cosumer, 2018). There is no doubt that animal activists
and organic lovers are resisting. As far as the price of Starbucks coffee is
concerned it is often higher in poor areas of India than in developed countries
in Europe.
There have been initiatives in the past that caused people’s negative
reactions and boycotts. For example, in 2012 a Starbucks executive said that
the organisation supports the same-sex marriage legislation and thousands of
people around the world called for a boycott against Starbucks (Smith, 2013).
Also, in 2017 the company announced its plan to hire 10000 refugees
worldwide. As a result, many customers accused the company of “political
brainwashing” (Vaughan & Rushe, 2017).
Another big challenge that Starbucks has to face is the pressure from
campaigns to the coffee retailer to use 100% recyclable cups. Although the
company made a promise to achieve that, this target was never met and in
2018 only 14% of drinks was served in reusable cups (Business Insider,
2018). The challenge for Starbucks is to balance water conservation with
Economic Inequality and Environmental Degradation_4

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