Essay on Sustainable Marketing: The British American Tobacco Company

2021-07-09 06:14:09
7 pages
1656 words
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University of California, Santa Barbara
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Essay
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The question in most customers minds is when will companies start to view them as more than just big spenders? Or perhaps when an individual becomes a proprietor of a company, how would the owner know the means of connecting to the potential clients on a personal level? In both cases, one has to familiarize themselves with sustainable marketing. Before proceeding, this article will note down the meaning of sustainable.' The word sustainable refers to the capability of being maintained at a stable level without depleting the resources or may relate to a system that preserves its viability by employing techniques that facilitate recurrent reuse.

At this juncture, then, one should understand that sustainability, and, more precisely, sustainable marketing activities are not merely about trying to appear more socially aware or environmentally friendly. Instead, sustainable marketing as a field of sustainable community development involves development that aims to meet the wishes of people living in the present without compromising the needs and wishes of the future generations (study.com, 2017). When a company embraces sustainable marketing, it aims to monitor pollution, reduce energy consumption, and cater for waste disposal in a bid to acquire the competitive advantage over rival companies. This report tends to focus on how the British American Tobacco Company employs sustainable marketing, the environmental factors that call for sustainable marketing, the potential impact of this method in the future, and the extent to which the company is managing the different forms of sustainability practices.

Brief background: British American Tobacco

1902, the British American Tobacco Company was formed when the UKs Imperial Tobacco Company and the American Tobacco Company of the United States merged. James Buck Duke is the companys first chairperson. He plans to come up with a superior product, appoint the best people to manufacture it, charge it at a low price, and finally to mechanize the production. 1904 to 1911 period saw rapid growth that facilitated expansion to markets such as West Indies, Ceylon, India, Holland, Egypt, Egypt, Sweden, Egypt, Norway, Indonesia, Finland, Malaya and East Africa. In 1905, the purchase of the Cairo-based cigarette producer, Maspero Freres Company, permits BAT to expand the export trade of cigarettes manufactured from Turkish tobacco into Europe as well as India. By 1910, annual BAT cigarette sales were a little over 10 billion. The American Tobacco Company traded its stake in the company in 1911, with time, Imperial Tobacco reduced its stake in the company but ultimately sold all its shares in 1980 (Bat.com, 2017).

The company attained its peak in 1937 where it was manufacturing and distributing 56 billion cigarettes in China alone. The company's properties were held by the Japanese government in 1941 only four years after its expansion to Japan. In 1953, BAT was expelled from China after the formation of the People's Republic. 1976 saw the reorganization of the group companies into a new parent company, B.A.T Industries. 1994 was the year BAT bought its former parent, American Tobacco Company. This acquisition added the Pall Mall and Lucky Strike brands into BAT's collection. Rothmans International joins BAT in 1999, which resulted in a share of a factory in Burma.

In 2002, BAT suffered a lawsuit concerning the right to trade cigarettes using the UK-based Marlboro brand. Since BAT had bought Rothmans, the company assumed that the license the license to use the name also belongs to them. However, in 2003, BAT announced the purchase of Ente Tabacchi Italiani (ETI), Italy's prime tobacco establishment (Bat.com, 2017). The significant acquisition would raise BAT to the second position in Italy, and the second leading tobacco consumer in the European Union. The magnitude of the enlarged operations would result in opportunities to grow and develop ETI's and BAT's local and international brands respectively. In the offset of August 2003, British American Tobacco secured a 68% share in Duvanska Industrija Vranje (DIV), a Serbian tobacco company that allowed local production of its brands, avoiding import duties.

In July 2004, Brown & Williamson, a U.S. based partner of British American Tobacco linked with the R. J. Reynolds Tobacco Company. R. J. Reynolds and Brown & Williamson were ranked second and third before the merger. After combining, R. J. Reynolds became a part of Reynolds American, with BAT having 42% shareholding. BAT halted its remaining UK production in 2007 due to the loss of over 600 jobs in the Southampton plant. However, the site continues to host global Research and Development operations. Later in 2008, BAT bought Tekel, Turkey's state-owned cigarette manufacturer. Also in 2008, BAT purchased the snus and cigarette processes at the Scandinavian Tobacco Group. BAT went to acquire 60% of Bentoel Group in Indonesia before upping its stake to 100% in 2010 (Bat.com, 2017).

Overview of Supply chain

BAT relies on a critical but complex supply chain which is kept fit for future use. Thats why the company is using its influence to encourage agricultural sustainability that applies all the way to the consumer (Zanjirani and Kardar, 2012). The nature of a tobacco manufacturing and distribution company means that the supply chain operates under two distinct supplier categories: tobacco leaf agricultural and non-agricultural goods and services.

Environmental Factors that create need for Sustainable Marketing in BAT

The environmental factors according to the companys analysis consider natural resources that are affected by selling and marketing of BAT services and products. BAT expects the effects of climate change to be felt more strongly in the coming years. Together with the growing global population and economic development, this will probably result in decreasing soil fertility and deforestation, air contamination, water pollution, and the disruption of the water cycle. We are also likely to see more legislation and other initiatives to manage climate change.

Decreasing soil fertility and Deforestation

The late 1970s experienced growing concerns about the energy or fuelwood crisis triggered by the manufacture of tobacco, with the emphasis on deforestation as a result of large-scale soil fertility depletion and extensive use of wood. Tobacco production poses a threat to development. While generating cash-contributing effects such as employment, foreign exchange, and income, the damage to the environment and public health, in the long run, appears to outweigh the advantages (ROPER AND DEFRA Framework, 2017). Estimated data from the mid-1980s shows that BAT Investments use approximately 82 to 176 million cubic meters of round wood produced globally each intended for curing, which shockingly translates to about 1.2 to 2.5 million hectares of woodland or forests annually removed. Through the years, additional estimations have not been made to evaluate the problem. The Bellagio statement on tobacco and sustainable development established that, in both developed and developing countries, tobacco not only poses a significant challenge to health but also to environmental sustainability. Likewise, the United Nations Food and Agriculture Organization (FAO) is in the forefront of sustainability and informs people on the impact of tobacco-related deforestation in the form of wood shortages amongst people living in rural areas around the world.

Tobacco and Air Contamination

Secondhand smoke holds over 4,000 components, a lot of which are lethal and over 60 of them can cause cancer. SHS is a health threat to non-smokers as well as the living animal and plants. Tobacco-free strategies initiated by many nations in the world are effective in lowering air pollution indoors but do not change the extent of air contamination on Earth. Instead, the policies will facilitate a rise in the carbon footprint since most smokers today expect to enjoy their smoke outside. The increase in energy consumption might be considerable or small in other cases, outdoor smoking is dangerous and is not beneficial to the environment (ROPER AND DEFRA Framework, 2017). Tobacco industries furthermore release enormous amounts of CO2 into the atmosphere yearly, which contributes to global warming. If we consider that the same sector is also accountable for substantial deforestation, we can see how this industry spells doom for the surroundings, bearing in mind that woodlands are the air purifiers of our planet.

Water Pollution by the British American TobaccoIt is very easy to contaminate water. When it rains, the water washes away toxic components that have collected in the soil. These harmful ingredients include cigarette butts, pesticides, and fertilizers. Rainfall directs the components into streams, rivers, lakes, seas, and oceans. The most alarming fact is that all of those contaminants find their way into drinking water reservoirs which poses a major threat to the health of individuals. Aquatic life suffers through cigarette but pollution (ROPER AND DEFRA Framework, 2017). Investigation shows that certain algae species die after exposure to cigarette butt contaminated water. Algae belong at the bottom of the food chain, so when other sea organisms feed on them, they are also exposed to a similar extent of poisoning, contamination goes all the way up to the fish humans consume regularly. Cigarette butts are ranked the number one contaminant of beaches in California and Hawaii.

Impact of Sustainable Marketing

Most investments such as city governments, big-box retailers, colleges, and universities consider sustainability. As the world partakes in projects that conserve our environment and protect our planet, companies and their projects are also adopting these conservatory methods. Going green has been the main focus of many businesses. To achieve this, they must encourage sustainability practices in their organization to reduce costs, energy use, waste, and other environmental aspects. Sustainable marketing impacts both the society and the organization as well. Principles of sustainability influence organizations that are already implementing steps that help the community and the environment positively. For instance, many businesses are at present recycling and reducing their emissions (Kahle and Gurel-Atay, 2011). Many investors and clients progressively expect to see initiatives that promote sustainability; per se, sustainability is becoming the new way of the tactical and strategic environment of many companies.

Impact of Sustainable Marketing on the Society

Methods and principles of sustainability should be embraced and incorporated into all aspects of business across many fields and levels of any organization. Sustainability involves participation and consideration of the community as well as preserving our surroundings. However, sustainability also becomes very useful when considering new projects and initiatives. The British American Tobacco sustainable practices impact the society in the following ways:

Energy management...

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