Marketers cannot assume that true costs will not be seen or considered in the purchasing decision.
What is the true cost of your company’s product? Behind the simple economic analysis of materials, labor, marketing, and distribution lurks the more complicated question of your brand’s social and environmental impact. Does your brand kill polar bears, and if so how does that fact impact your reputation?
Stephanie Jue, a business, government and society lecturer at McCombs School of Business, says cost economics is just the starting point for determining the societal impact of your product.
“Consider a $1.25 bottle of water,” she says. “What the consumer wants is the water inside, but it has to be in the bottle. We assume the price includes all of the costs of the water and creating the bottle, but consumers don’t pay the full cost of eliminating the plastic and eventually discarding the plastic when it can no longer be recycled.”
If consumers remain oblivious to the added cost there is likely no impact on brand reputation (convenient, portable water is good!), but in today’s information-rich world, consumers tend to wise up. Social advocates make sure of it.
Witness the gradual demonization of bottled water as an example of what can happen when true costs are not just revealed, but turned into a cause célèbre.
Is your brand impact a factor of cuteness?
How much consumers care about social and environmental impact, speaking from a pure brand perspective, may depend on the “cuteness” of the declared victim.
Jue notes that society is very worried about saving polar bears, for example, which seem to have minimal direct impact on the average person. Endangered honeybees, on the other hand, responsible for pollinating one-third of the food crops in the U.S., receive much less concern.
“Valuing things in nature is very difficult and controversial, but as consumers, we tend to apply more value to things we find familiar or cute,” she says. Unfortunately for society, cuteness does not necessarily correspond with value.
Wolves, not generally considered cute, were eliminated from Yellowstone Park in the 1920s, beginning a chain of events that resulted in deforestation, loss of natural lakes, and the disappearance of songbirds. Wolves were reintroduced to the park in the mid-1990s and the negative effects were reversed.
It may be that foreign technology workers are not cute enough to matter to American consumers. Despite the controversies regarding workers rights at Foxconn, including suicides, worker riots and charges of child labor violations, sales of the Apple iPad and iPhone remain undiminished. The Apple brand, despite some recent softening, appears relatively untouched by concerns regarding its manufacturing partner.
Managing your brand with eyes wide open
Jue doesn’t suggest an exact measure for the social and environmental impact of brands, but she sees a new generation of consumers more aware and alert to the true costs of the products they choose.
“Young consumers comprise the best-informed generation about environmental issues,” she says. “Social and environmental impact is now mainstream, and marketers cannot assume that true costs will not be seen or considered in the purchasing decision, particularly when the purported victims are familiar and appealing.”