Posted: December 8th, 2014

Critical Review – Sustainability and business-to-business marketing: A framework and implications

-Brief evaluation?
• Summary of key points, with examples. Explain author’s aims/intentions. Describe how it is organised.
•Balanced discussion of strengths/weaknesses & notable features. Other reading? Recommendations on how it could be improved?
•Restate overall opinion, with qualification?
•References listed if used to inform Critical Review.

2.3. Environmental sustainability and other functional areas
Researchers in other functional areas have argued that the focus on
environmental sustainability stems from the pressures of global
competition, governmental regulations, and resource constraints
(Jiménez and Céspedes, 2001; Sarkis, 2001; Sharma & Ruud, 2003).
Government pressures as in the case of Germany had led to firms
changing their packaging requirements. Similarly, resource constraints,
especially the rising costs of traditional energy have put more pressures
on firms to seek alternative sources of energy, including solar power.
Firms that have control over their manufacturing function have
focused on various approaches to environmental sustainability. At the
minimum, firms have initiated elaborate programs of recycling. Most
companies have recycling programs that range from simple sorting of
recyclable materials to more complex behaviors like reusing products
and materials (such as packaging cartons). Hewlett-Packard’s recycling
plants process about 1.5 million tons of electronics/month and
recover materials that are reused in some form (Moran, 2006). Some
companies require the seller to take charge of the old products as a
condition for buying new products. Thus, the job of disposing or
retrofitting the old product and recovering the usable parts is shifted
to the seller. Many businesses are thriving in this retrofitting business
(Schoenberger, 2004; Wagstaff, 2003; Prizinsky, 2000).
Some firms engage in remanufacturing of previously used products
(Thierry, Salomon, Van Nune, & Van Wassenhove, 1995). Specifically
within production and operations management, there is now an
invigorated focus on the development of optimization models in which
environmental sustainability is included as an additional consideration.
Remanufacturing requires reverse logistics, disassembly, sorting, and
reassembling. Remanufactured products typically cost less and extend the
life of the original parts and components (Ferrer &Whybark, 2000).
In summary, current literature advocates paying attention to
environmental constraints in production and operations planning
(e.g., Dobos, 1999), recycling and reuse in manufacturing (e.g., Sarkis,
2001), and remanufacturing (e.g., Guide & Van Wassenhove, 2001).
Table 1 provides exemplars of research that address these environmental
concerns. Also, closed-loop processes within production and
operations management have highlighted the need to integrate the
forward supply chainwith the reverse supply chain (Guide et al., 2003).
3. The sustainable market framework
We develop a framework (Fig. 1) that is based on two major
objectives in sustaining environments. First, when firms do not
manufacture more units than are required (over-produce), a reduction
in over-supply occurs that leads to lower levels of product needing to
be disposed (that may need recycling or remanufacturing), leading to a
more sustainable environment. We label this strategy as reducing
surplus supply. Second, firms can reduce the number of products that
need recycling. We label this strategy reducing reverse supply and
suggest that firms need to develop repairable products as well as more
complete recycling and remanufacturing strategies. We discuss these
strategies in detail next and suggest that both these strategies are not
only good for environmental sustainability, but also for business. Our
position is similar to Esty and Winston (2006), Hawken et al. (1999),
and Savitz andWeber (2006), who have suggested that sustainability
strategies are compatible with good business strategies.
Our focus in this paper is on identifying the important role of
marketing in environmentally sustainable strategies. Fig. 1 highlights
the critical role of internal and external marketing in the successful
implementation of environmental strategies. As will be observed in
subsequent sections, both internal marketing and external marketing
are important for a successful approach to sustainability.
Recent literature within marketing makes a distinction between
external marketing and internal marketing. External marketing refers to
marketing strategies and activities outside the firm, i.e., those employed to
attract or retain customers or buildmarket share. Internalmarketing refers
to the marketing of process changes within firms, especially the
communications necessary to successfully deploy new organizational
strategies.While this distinction has been advanced in the area of services
marketing (Gronroos, 1990), internal marketing is necessary to achieve a
greater interdepartmental consensus and coordination for all firms
(Narver & Slater, 1990). In the context of environmental sustainability as
well, internal marketing efforts are especially important, since a
coordinated effort is required across all functional departments. In
discussing our framework, we provide the implications on both internal
and external marketing efforts of the firm. The three major strategies
discussed in our framework are also elaborated in Table 2.
3.1. Reducing surplus supply
Current discussions of environmental sustainability emphasize only
external marketing efforts, i.e., the firm’s relations to its customers. In
most competitive environments, a focus solely on external consumer
demand contributes to surplus supply, especially due to lack of precision
in forecasting demand or lack of attention to supply management.
Surplus supply (over-production) typically has two implications for
firms — discounting or non-consumption of the product. First,
discounting results in business customers purchasing features that
they will not utilize during the life of the product. Therefore, the
materials that were utilized in providing unnecessary functionality
will result in an unnecessary need for recycling. Examples of such
features are DVD players in laptops that business customers may not
use but are bundled with the system. Second, due to over-supply, some
products may never be sold and may go to recycling without reaching
the consumer. Such recycling may result in materials going back to the
same cycle of non-use or may result in harvesting for spare parts. Oversupply
thus increases the burden on costly recycling efforts.
One key strategy to reduce surplus supply is to produce only after
an order has been placed or build-to-order (BTO). This strategy has also
been labeled as demand-driven manufacturing and is also discussed
under the rubric of lean manufacturing (Sharma & LaPlaca, 2005).
Build-to-order (BTO) and lean manufacturing have been revolutionary
in the last decade and are increasingly being adopted in a large variety
of industries (Bylinsky, 2001). Firms such as Dell, Agilent Technologies,
and Batesville have adopted BTO technologies to create enhanced
competitive positions through associated cost reductions. The primary
impetus for the move toward BTO and lean manufacturing is the value
that can be generated for both the firm and the customer (Sharma &
LaPlaca, 2005). Adopting BTO processes allows firms to effectively and
efficiently customize their products. Customization in turn provides for
a more precise matching of product to customer needs, leading to
enhanced satisfaction and loyalty (Berman, 2002; Holweg & Pil, 2001;
Salvador, Forza, & Rungtusanatham, 2002; Sharma & LaPlaca, 2005).
More importantly, BTO processes create tremendous savings in the
areas of reduced raw material inventories, reduced finished goods
inventories, and reduced space requirements (Sharma & LaPlaca,
2005). For example, it is estimated that by manufacturing non-demand
inventory, auto makers spend 80 billion dollars more annually than
they would with BTO processes (Agarwal, Kumaresh, & Mercer, 2001).
Similarly, Pella, a windows manufacturer in the U.S., worked on
reducing surplus demand between 1991 and 2000, with the results
that:
• The production line occupies about one-fourth the original space
• The company’s inventory turns doubled between 1990 and 1999, in
spite of a tripling in sales
• The value of work-in-process inventory was reduced by nearly onefourth
• The cut-lumber inventory– which once ran as high as 6.9 million
board feet–is down to less than 2 million with a reduction in the
number of lumber suppliers (Siekman, 2000).
332 A. Sharma et al. / Industrial Marketing Management 39 (2010) 330–341

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