A Marketer’s Roadmap to Sustainable Innovations
From a marketing perspective, a firm’s sustainable innovations capabilities are critical. In addition to offering a competitive differentiation advantage, the sustainability-related attributes of a firm’s product offerings are potential bases for market segmentation, target marketing, and positioning.
In a recent article in the Journal of the Academy of Marketing Science, Texas A&M professor Rajan Varadarajan offers a roadmap for decision makers undertaking such efforts, addressing the “imperative” for legacy or established firms to invest in developing sustainable innovation capabilities.
Such capabilities are increasingly important from the standpoint of organizational legitimacy, he says. “Various stakeholders including customers, employees, shareholders, and suppliers expect that firms in general—and large firms in particular—demonstrate a commitment to and a proven record of innovating for sustainability.”
Stakeholders expect firms in general—and large firms in particular—to demonstrate a commitment to and a proven record of innovating for sustainability.
Sustainable innovations such as resource use reduction, elimination, and substitution are the “building blocks” for reducing the impact of any firm’s activities and product offerings on the natural environment, he says. “The cumulative effect of a sustained and systematic approach to identifying and implementing such innovations during each of the five stages of the product lifecycle—upstream supply chain, production, downstream supply chain, use or consumption, and post-use or post-consumption—can enable a firm to significantly lower its environmental footprint even as it strives to increase its market footprint.”
While a number of sustainable innovations are the result of firms proactively striving to reduce the environmental harm associated with their product offerings, the sustainability benefits of other innovations happen to be serendipitous.
For example, the auto industry has a long history of focusing on greater efficiency in resource use during the use stage of the lifecycle of the product such as greater fuel efficiency and less frequent engine oil changes and parts replacement. On the other hand, it is doubtful as to whether sustainability considerations were the primary impetus for a convergence innovation such as the smartphone, which subsumed a number of standalone products (phone, camera, music and video streaming, surfing the web, and more), Varadarajan notes.
For firms scanning the environment for ideas, both types of innovations can be valuable sources of inspiration.
It’s important for sustainability-oriented firms to focus on sustainable innovations in the category of “low-hanging fruits” as well as “moon shots,” he concludes. The collective impact of a number of incremental sustainable innovations can help firms achieve significant reductions on important dimensions such as CO2 emissions and energy and water consumption, as well as increasing the substitution of nonrenewable resources with renewable resources, and less abundant nonrenewable resources with more abundant nonrenewable resources.
Furthermore, success with incremental innovations can play an important role in nurturing an organizational culture and climate that motivates employees to aim higher and successfully develop breakthrough sustainable innovations.
Download full article (free until January 23, 2016)
Varadarajan, Rajan (2015), "Innovating for Sustainability: A Framework for Sustainable Innovations and a Model of Sustainable Innovations Orientation," Journal of the Academy of Marketing Science (August 2015)
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