Purpose This memo is intended to respond to the Video Case 3 which correlates with Chapter 20, Marketing Ethics and Social Responsibility. Does Land Rover ‘walks to talk’ and practices what it preaches in the video, and whether that translates into a competitive advantage. Is the basis for Land Rover’s competitive advantage truly accurate or are they using a clever marketing scheme to target socially responsible consumers? Summary
In Land Rover’s Sustainability Report 2009/2010 it states “We commit to continuously improving the environmental performance of our business and products by reducing emissions, conserving natural resources, and optimizing the use of sustainable energy and materials. This is underpinned by our investment in research into cutting-edge environmental innovation” (Land Rover, 2011). Land Rover is using the hot new green marketing concept to highlight their social responsibility and target the consumer who is eco conscience.
According to the American Marketing Association, green marketing is the marketing of products that are presumed to be environmentally safe. While it may seem that to advertise one’s company as “green” it must include a broad range of activities, including product modification, changes to the production process, packaging changes, as well as modifying advertising. Background Founded in 1948, Land Rover was designed with the tough working, never ending job of farming in extreme places in mind. Since its early days and with countless changes in designs and technology, Land Rover is still the epitome of toughness and forward thinking design.
Now Land Rover is also addressing environmental concerns with initiatives such as e-Terrain Technologies, Sustainable Manufacturing and CO2 Offsetting (Land Rover, 2011). Land Rover’s global sustainability strategy is focused on minimizing the environmental impact of its products and operations, and is used to heavily market Land Rover as a true “green” corporation as well as a leader in the automotive industry. Through the integration of an environmental strategy into the core business process Land Rover’s goal is to become a long term sustainable energy corporation.
To do this it must make process more efficient and reduce resource consumption, waste and costs which is plans to do through the target goal of reducing operating CO2 emission by 25%, waste to landfill by 25%, and water consumption by 10% by 2012 (from a 2007 baseline). Additionally, Land Rover will strive to increase sustainability investing ? 800 million over a five year period in sustainability research and development to reduce tailpipe CO2 emissions (Land Rover, 2011).
Analysis Sustainability Efforts
The campaign plan which outlines the sustainability plan for Land Rover is quite impressive and clearly details how the auto maker intends to reach its target goals. Realistic and measurable numbers are important for Land Rover as it will allow them to be able to prove to the naysayers that they are truly making a change to their carbon footprint in both manufacturing and auto areas. Charter Institute of Management Accountants found that “sustainability governance structure is part of the reason why sustainability is so embedded strategically in the way they do business” (Cimaglobal, 2011).
Overall, the positive publicity that Land Rover has put forth has been echoed from others around it, and kudos has been given to them for taking the perceived lead in caring for the environment. Sustainability Value Land Rover is clearly making strides when it comes to their green marketing and portraying how the company has become a sustainable energy corporation. Through the publication of their sustainability reports along with various partnerships with websites and printed material, Land Rover has used their commitment to go green to their advantage.
After a brief but targeted attack from Greenpeace which focused on what they called “UK’s least fuel-efficient 4×4 doing a criminal 12 miles to the gallon in urban areas” Land Rover has committed itself to turning around their public image. While the sustainable marketing campaign and current company focus is impressive, it is simply not enough for this auto maker to be considered a green. Compared to the Chevrolet Tahoe which averages 15mpg city or 20mpg hwy, the Range Rover averages 12mpg city or 18mpg hwy and does not have a hybrid option (US DOE, 2011).
None of the Land Rover lineup is available in a hybrid option, although the new Range Rover Evoque is billed as the new “green” SUV. Additionally while Land Rover has a plan to reduce their foot print over a five year period, Ford Motor Company has reduced its global operating energy use by 44%, carbon dioxide (CO2) emissions by 50% and water use by more than 62% since 2004 far surpassing any of the benchmarks set by Land Rover (Ford, 2011). Land Rover is currently doing a superb job of riding the “green” train as it suits them, while other auto manufactures have yet to jump on.
Environmental Business A company will have a very difficult time staying in business solely for the purpose of environmental concern, but will be able to reap the benefits of the current green wave should they choose their concern for the environment as one of the selling points. A recent article in The Independent noted that, “Nearly 60 per cent of the 500 senior executives questioned said sustainability could increase market share and almost half felt it could boost profits by making their operations more efficient” (Independent, 2011).
Land Rover is not simply in the business to be the eco-friendly auto maker but is better known as the luxury brand for sport utility vehicles, which in and of itself is a bit of an oxymoron. When a vehicle that is driven around town and to tote the children to and from school averages 15mpg, and the most fuel efficient vehicle on the market is pushing 50mpg there is a disparaging difference here. To become a truly sustainable auto manufacturer, Land Rover will have to revamp its vehicle line which will ultimately lead to the downfall of the business.
Strategy Unlike other auto makers, Land Rover has been able to capture and market its sustainable ideas and practices to reach the eco conscience consumer. Through the use of such things as carbon offsetting fund where buyers can contribute a certain amount based on the vehicle that they drive to offset the CO2 emissions produced and the adding of aluminum in its vehicle manufacturing to reduce the car’s need for such a large engine and would drastically cut fuel consumption and CO2 emissions, Land Rover certainly has the right idea in mind.
Even more powerful is Land Rover’s ability to target in on these initiatives and publicize to its consumers how it’s saving the environment one SUV at a time. Works Cited “Jaguar Land Rover Case Studies. ” Cimaglobal. com. Charter Institute of Management Accountants. Web. 16 Sept. 2011. <http://www. cimaglobal. com/Documents/Thought_leadership_docs/Sustainability%20and%20Climate%20Change/jaguarcasestudydec09. pdf>. Mesure, Susie. “Going Green: Why It’s Good for Business – Green Living, Environment – The Independent. ” The Independent. Web. 16 Sept. 2011. <http://www. independent. co.
uk/environment/green-living/going-green-why-its-good-for-business-2040854. html>. “Miles per Galon Rating. ” Fuel Economy. US Department of Energy. Web. 19 Sept. 2011. <http://www. fueleconomy. gov/feg/bymake/bymanuNF. shtml>. “The Path to Green Production. ” Official Global Ford Corporation Information. Ford Motor Company. Web. 15 Sept. 2011. <http://corporate. ford. com/about-ford/sustainability/the-path-to-green-production>. “Sustainability | Land Rover UK. ” Sustainability. Land Rover Global Home. Web. 14 Sept. 2011. <http://www. landrover. com/gb/en/lr/about-land-rover/sustainability/>.