Sustainable practices & marketing strategies for developing countries

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Sustainable practices & marketing

strategies for developing

countries

A multiple case study of international firms

operating on the Malaysian market

Authors: Heidi von Jahf 891104

Master’s in Business Administration with specialization in Marketing

Paulina Huhtilainen 890905 Master’s in Business Administration with specialization in Marketing

Tutor: Dr. Setayesh Sattari

Examiner: Prof. Anders Pehrsson

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Abstract

As the traditional role of corporate entities have been challenged by an increased number of demands from society, companies are no longer just legal factors intended to generate profits by supplying products or services. Instead, they are expected to play the role of responsible co-citizens of the community, taking social and environmental responsibility for the consequences of their actions. Implementing sustainable practices into business strategies is considered beneficial for both organizations and society, as it brings organizations opportunities for growth and development, as well as a more sustainable future for society. One way for businesses to ensure their responsibilities regarding sustainability issues and maintaining sustainable business practices has been depicted in the United Nation’s eight goals termed the ‘Millennium Development Goals’ (MDGs).

Previous research argues that organizations must incorporate sustainable practices into their different organizational strategies such as marketing, purchasing, and finance in order to maintain organizational growth and contribute to sustainable development. This issue has become especially important in developing countries as emerging markets compose great opportunities for businesses in terms of growth and development. An emerging market and developing country providing humongous growth opportunities for businesses is Malaysia. However, limited research has been conducted connecting the concepts sustainable development and marketing strategies, and how these may lead to an accelerated achievement of the MDGs within developing countries.

In order to answer the purpose of the study, a qualitative approach using open, - and semi-structured interviews together with observations was chosen as the most appropriate research method. Four international firms operating on the Malaysian market participated in the study and the findings indicated that having a well-developed sustainability marketing strategy and striving for a sustainable future does bring organizations competitive advantage and growth opportunities, and thereby an accelerated achievement of the MDGs.

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Acknowledgements

This research was conducted during our last semester at the Master’s Program in Marketing in spring of 2015. The process of writing the dissertation has been educational and given us an increased knowledge and understanding within the field of subject. The experience has endowed us with significant understanding and awareness regarding sustainability issues in relation to marketing strategies formed in a developing country. The choice of conducting a qualitative research based on observations, as well as semi-structured-, and open interviews has facilitated the aim to gain in-depth knowledge regarding how international firms operating on the Malaysian market employ sustainability practices into their marketing strategies. The process of writing the dissertation and gather the empirical data based on fieldwork on the Malaysian market has been a great opportunity for personal,- and professional development. This dissertation would not have been possible without the assistance and support from several people. We would like to thank the organization ’Styrelsen för Internationellt Utvecklingssamarbete’ (SIDA) for providing us with scholarship and hence, giving us the opportunity to conduct our research in Malaysia. We would also like to thank our tutor Dr. Setayesh Sattari for the assistance and guidance during the process of developing and writing the thesis, and for all valuable feedback and advice. Further, we would like to thank our examiner Prof. Anders Pehrsson for the support throughout the research process, which encouraged us to improve the quality of our research, and we also appreciate the guidance and support from all our fellow students. Last but not least, we want to thank the four organizations that made the research possible by sharing their experience and knowledge regarding the subject, and for allowing us to gather the empirical data on site.

Linnaeus University May 2015

Paulina Huhtilainen

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Table of Contents

List of Tables

Table 1 - Operationalization ... 34

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Introduction

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1. Introduction

This chapter contains an introduction to the field of study, a presentation of the concept ‘sustainability’ and ’sustainable development’, ‘sustainability marketing strategy’ as well as the Millennium Development Goals (MDGs). Further, the chapter provides background information about the federation of Malaysia and continues with a problematization of the field under study. Lastly, the study’s research gap and questions are stated together with the purpose of the study, followed by delimitations and ending with an outline of the thesis.

1.1 Background

Over 20 years ago the World commission on Economic Development (WCED) introduced a concept known as ‘sustainability’ into business practices and scholarly research (Crittenden et al., 2010). According to Crittenden et al. (2010) the concept includes a large assortment of terms and management approaches such as; environmental responsibility, social responsibility, sustainable development, and many more. The authors discuss that even though these concepts have all been engaged in displaying business accountability to the public, regardless of the term used, it is reasoned that the intention is to argue for business responsibility among organizations. According to the International Institute for Sustainable Development (IISD) the term ‘sustainable development’ is referred to as: “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (IISD, 2013). Furthermore, sustainability includes three dimensions; social,- environmental,- and economical sustainability and authors argue that business practices should address all three dimensions in order to be considered sustainable (Kumar et al., 2012).

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| P a g e 12 same time work to prevent pollution and avert diffusion of HIV and AIDS. (milleniemålen, 2015; Okpala & Ekpemiro, 2012)

The notion of sustainability or, sustainable development, is reflected in different concepts related to corporations and the concept ‘Corporate Social Responsibility’ (CSR) is one of them (Idemudia, 2011). Idemudia (2011) also argues that the idea of CSR presumes that businesses have certain obligations to society that go beyond profit-making and instead involves the help to solve societal and ecological issues. Concerns related to sustainability have come to be one of the more important aspects within developing countries since these markets are in need of socio-economic stability within business environments, which as a result may lead to the support of macro trends and growth strategies (Kumar et al., 2012). For international companies doing business in these markets, the adoption of sustainable development is a function of including diverse firm activities of which marketing has been identified as one (Nkamnebe, 2011). ‘Sustainability marketing’ in regards to ‘sustainability issues’ encompasses a broader scope of marketing and is described as forming and maintaining sustainable customer relationships, the social environment and the natural environment (Kumar et al., 2012). Furthermore, the market opportunity for organizations is also considered vast within developing countries and the main drivers within emerging markets are sustainability issues and growth opportunities (Lenssen & Wassenhove, 2012). 1.1.2 Malaysia as a developing country

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Introduction

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According to the American stock exchange ‘National Association of Securities Dealers Automated Quotations’ (Nasdaq), Malaysia has come to be known as an important emerging market and one of the developing countries providing humongous growth opportunities for businesses. Moreover, Nasdaq (2015) states that Malaysia has often been overlooked by the powerhouses Thailand and Vietnam, despite the fact that the country has managed to keep expanding its economy regardless of the two air disasters from which it has suffered badly. During the global economic crisis in 2008-2009, Malaysia also managed to keep a steady growth while other Southeast Asian economies faltered (Nasdaq, 2015). Consequently, there are several industries in Malaysia providing humongous growth opportunities, thus, licensing or incorporating business in Malaysia is considered potentially profitable options (Startupoverseas, 2015). Moreover, Malaysia has undergone rapid changes socially, economically, and environmentally during the last few decades (Hezri & Hasan, 2006). The pursuit of socio-economic progress and the unprecedented rate of change in the natural environment have lead the government to adapt their responses in order to address the emerging environmental situations(Hezri & Hasan, 2006).

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1.2 Problem Discussion

As the traditional role of corporate entities have been challenged by an increased number of demands from society, companies are no longer just legal factors intended to generate profits by supplying products or services, but instead expected to create job opportunities (Schmeltz, 2014). As of today, corporate entities must play the role of responsible co-citizens of the community, taking social and environmental responsibility for the consequences of their actions (Schmeltz, 2014; Kumar et al., 2012). The expectations from society are high and in order to survive and maintain organizational growth, companies must align their way of working to the demands of society (Schmeltz, 2014). This requires organizations to incorporate sustainable practices into their different organizational strategies such as marketing, purchasing, and finance (Kumar et al., 2012). Furthermore, sustainability marketing strategy is described as a concept that does not only result in added value to customers but also in long term relationships with customers, which is considered beneficial for both businesses, and society and ecology (Kumar et al., 2012). Hence, developing and operating businesses in a responsible way is a procedure that all organizations should strive to address in order to minimize the risk of compromising resources for the future (Azmat & Samaratunge, 2009).

Governments, campaigners, and media have become experts at holding companies responsible for the social consequences of their actions, and despite companies’ effort to continuously work towards improving the social and environmental consequences of actions taken, these attempts have not been nearly as effective as they could be (Porter & Kramer, 2006). This issue has become especially important in developing countries as emerging markets compose great opportunities for businesses in terms of growth and development (Zou et al., 1997; Schlager and Maas, 2013). Consequently, factors such as cultural and environmental differences have an effect on international firms’ strategic choices in order for organizations to claim a competitive role on the emerging market (Zou et al., 1997; Schlager and Maas, 2013).

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Introduction

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(2012) argue that managing sustainability strategies is more than just an expense, a limitation or an abundant deed, instead it may provide organizations with a source of innovation, opportunity, and competitive advantage. Moreover, analyzing and evaluating marketing strategies in terms of sustainability issues may also provide a unique objective for firms, and therefore requires special attention (Kumar et al., 2012).

One major aspect related to sustainable development is the concept of corporate social responsibility (CSR), which has shifted the attention towards a more social and environmental repercussion of business operations (Giuliani, 2014; Kumar et al., 2012). Giuliani (2014) reasons that firms are encouraged to adopt CSR practices as part of their sustainable operations with the intention of positively contributing to society and the environment. However, the author argues that this shift has resulted in an increased pressure for companies operating in developing countries, as the awareness of including sustainable development into business strategies has resulted in firms being exposed to international nongovernmental organizations (NGOs) and the media. The amplified global demand has subsequently forced organizations to implement codified set of laws, regulations and other CSR guidelines (Giuliani, 2014). Further, the link between companies’ business ethics and NGOs has received an increased amount of attention during the last decade, as a result of social and political pressure (de Hond et al., 2015).

Moreover, as a reaction to the increased global pressure, organizations may use their relationship with NGOs to their advantage in order to increase competitive advantage and thereby strengthen legitimacy and reputation, while at the same time prevent negative actions from stakeholders’ side (den Hond et al., 2015; Giuliani, 2014). The interaction is related to CSR principles as NGOs have different ways of influencing, shaping, and measuring social responsibilities of firms (de Hond et al., 2015).

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| P a g e 16 in transforming their strategic ambitions into sustainable marketing practices (Krishnan & Ganesh, 2014).

The primary role of marketing strategies is to achieve competitive advantage (Kumar et al., 2012). However, Kumar et al. (2012) argue that designing an effective marketing strategy is a complex task as each business objective requires a diverse set of marketing strategies, together with a unique set of assessments. It is also argued that sustainability has become crucial as it is a long-term vision dealing with the development of strategies based on ethical and moral obligations (Kumar et al., 2012). Nevertheless, few studies have been conducted that addresses the link between sustainability and marketing strategy in terms of issues related to environmental, social and economic goals and objectives in an integrated manner (Kumar et al., 2012; Lenssen & Wassenhove, 2012; Krishnan & Ganesh, 2014).

1.3 Research gap and purpose

Previous research has illustrated that there is a research gap between sustainability issues and organizations’ marketing strategy. Further, the recognized opportunity for company growth and competitive advantage, and the increased global pressure have created a need to develop strategies that deal with sustainability issues, while at the same time accelerate the achievement of the MDGs. The research gap further highlights the relation between Sustainable Development and manufacturing companies as organizations face increased scrutiny from employees as well as stakeholders. This in turn, demands organizations to engage in sustainable initiatives. Therefore the intention is to gain in depth knowledge regarding the sustainability issues in relation to the accelerated achievement of the Millennium Development Goals. As a consequence, the following research questions were developed:

RQ1: How are international firms operating on the Malaysian market engaging in sustainability issues?

RQ2: How are international firms supporting and contributing to Sustainable Development in developing countries such as Malaysia?

RQ3: Does the employment of Sustainability Marketing Strategy lead to competitive advantage and growth opportunity?

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Introduction

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In order to answer the stated research questions, the purpose of the study is to:

Create an understanding of how international firms operating on the Malaysian market employ sustainable practices into their marketing strategy.

1.4 Delimitations

According to the National Association of Manufacturers, the manufacturing industry accounts for a total of 12.0 percent of the world’s GDP (nam, 2015). For every $1.00 spent in manufacturing, another $1.37 is added to the world economy, which makes the industry the highest multiplier effect of any economic sector (nam, 2015), hence, due to the size of the industry and its level of impact on society, sustainable manufacturing among industries has become important. The pressure on the industry is high since manufacturers must increase flexibility, speed of production systems, as well as supplier networks, while at the same time reduce environmental impacts, energy consumption, and strive for a sustainable future (Mani et al., 2014).

Furthermore, large international firms are considered powerful as they have the ability to influence society in various ways in terms of social,- economic,- and environmental sustainability (Kumar et al., 2012). Based on this background, the study will target four large international manufacturing firms operating on the Malaysian market, holding more than 250 employees. International firms are chosen in order to gain knowledge in how sustainable practices are employed into business processes and strategies within developing countries such as Malaysia. Moreover, the four organizations chosen all operate within diverse industries and markets and it is therefore considered interesting to gain insight into how they formulate and adapt their sustainability marketing strategies based on the Malaysian market.

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1.5 Outline of thesis

An illustration of the outline of the thesis is presented below to give an overview of the structure of the paper.

Ø Introduction

Chapter one presents an introduction to the research field, with an explanation of the concepts sustainable development, the Millennium Development Goals (MDGs) and Malaysia as the country of focus. Furthermore, a problematization of the field is presented, together with the study’s identified research gap and questions, purpose of the paper, delimitations, ending with an outline of the thesis.

Ø Literature Review

Chapter two presents the conducted literature review with the concepts and definitions international marketing strategy, sustainable development, the Millennium Development Goals, Corporate Social Responsibility, all in relation to the developing country Malaysia.

Ø Conceptual model

Chapter three presents the study’s proposed research model as well as the authors’ developed assumptions.

Ø Methodology

Chapter four presents a discussion and justification of the chosen methods including the philosophic research approach, practical methodology comprising research approach and strategy, and data collection method, followed by data collection instruments, sampling, analysis method, ending in ethical considerations and quality criteria.

Ø Empirical Data Presentation

Chapter five presents the empirical data presentation collected for the study. The data was collected from semi-structured and open interviews, as well as from observations.

Ø Data Analysis

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Introduction

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Ø Conclusions and Implications

Lastly, chapter seven presents a discussion of the main findings and conclusions, together with theoretical contributions and managerial implications, ending with limitations and suggestions for future research.

1.6 Chapter summary

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2. Literature Review

This chapter presents the background of International Marketing Strategy as well as sustainability and is followed by arguments from several researchers. A theory section is included, based on the main concepts of this study, namely; International Marketing Strategy, Sustainable Development, the Millennium Development Goals, and Sustainability Marketing Strategy. Moreover, the literature review presents the research gaps in the abovementioned areas that will be studied further.

2.1 International Marketing Strategy

There are various reasons and motivations to why firms should enter international markets and be part of the increased business globalization (Rundh, 2003). One of them being the market opportunities it presents and the other highlighting the chances for development (Rundh, 2003; Kumar et al., 2012). Some studies present factors such as company core capabilities and competencies as the major sources of international competitive advantage (Rundh, 2003), while other authors argue that these factors change based on the company’s international experience (Zou et al., 1997). Moreover, researchers argue about the definition and intent of ‘International Marketing Strategy’ (IMS), of which one is that IMS goes beyond export marketers and is more focused on the marketing surroundings in the specific countries in which the company operates in (Keegan, 2002). Other research proposes that IMS is aiming to present international marketing as an application of marketing orientation and marketing capabilities to international business (Mühlbacher et al., 2006). Regardless of the choice of definition one decides to accept, IMS involves numerous decisions across nation-wide borders (Doole & Lowe, 2004). Moreover, at its most complex level it engages the firm in establishing manufacturing amenities in foreign countries and organizing marketing strategies across the globe (Doole & Lowe, 2004).

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Literature Review

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accelerated during the last couple of years due to an augmented globalization, and companies have to alter to the pace (Koku, 2005; Schlager & Maas, 2013). This issue is recognized by the business environment as there is obvious pressure from different economic and political sources, which consequently influence and impact the choice of marketing strategies for companies operating on an international level (Rundh, 2003).

2.1.1 International Marketing Strategy in developing countries

Studies concerning marketing approaches and growth have resulted in newly formed strategies to distinguish the link between marketing activities and the economic, social, political, as well as ecological environment (Kumar et al., 2012). Furthermore, some studies support the perspective that the relationship between marketing and development is mutual and that both shape and influence one another (Koku, 2005). However, international marketing is also the procedure of focusing the capabilities and objectives of a firm on global marketing opportunities (Rundh, 2003; Koku, 2005). It refers to the ability to adapt an organization’s strategic activities in unity with the market, thus; due to continuous change in the marketing,- and business environment, it is crucial to regulate a firms’ marketing strategies accordingly (Rundh, 2003; Koku, 2005).

Schlager and Maas (2013) suggest that emerging markets within developing countries compose great opportunities and is vital to uncover for the future of many organizations. Due to cultural and environmental differences, international firms operating in developing countries need to adjust their strategies in order to compete with the business pattern on the emerging market (Zou et al., 1997; Schlager and Maas, 2013). Given that the environmental circumstances differ tremendously between developing and developed countries, it is recognized that variation in business opportunities, experience, and marketing strategies is highly distinguished between the two (Iakovleva et al., 2011).

2.2 Sustainable Development

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| P a g e 22 sustainability but also comprises economic and social issues (Mariadoss et al., 2011; Kumar et al., 2012; Mokthsim & Salleh, 2014). Additionally, the main objective of sustainability is to move societies beyond constant consumption at no more than an existence level, and doing this without conceding the potential for the future (Khavul & Bruton, 2013). Mariadoss et al. (2011) argue that Sustainable Development comprises sustainable consumption behavior on a social, economic, and political level. The authors also mention that activities carried out at the individual household,- community,- business,- and government levels will support and encourage the consumption of goods and services that respond to basic needs and bring better quality of life. This in turn may minimize the use of natural resources, toxic materials and emissions of waste (Mariadoss et al., 2011). The vision of a future sustainable society is one that invests more than it consumes, and passes to future generations at least as much as it inherited from previous generations (Khavul & Bruton, 2013).

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The increased global demand has left several international institutions proposing a codified set of laws, regulations, and other CSR guidelines in order to help organizations move towards sustainable development (Giuliani, 2014). Several of these institutions are linked to the United Nations through specific agreements and one of these guidelines is depicted in the United Nations’ Millennium Development Goals (un.org., 2015).

2.2.1 The Millennium Development Goals

The Millennium Summit culminated when the Millennium Declaration established by the United Nations (UN) and its 190 members was signed in year 2000 (millenniemålen, 2015). By signing the declaration, world leaders pledged to “create an environment, at national and global levels, conducive to development and to eliminate poverty” (Addo-Atuah, 2014; millenniemålen, 2015; Akinboade & Kinfack, 2014). In order to facilitate the achievement of the Millennium Declaration, eight goals known as the ‘Millennium Development Goals’ were formed (Addo-Atuah, 2014). The main goal of the MDGs is to improve and better the lives of people in developing countries (millenniemålen, 2015; Okpala & Ekpemiro, 2012). The eight goals form a blueprint agreed to by all the world’s countries and development institutions where efforts are made to meet the needs of the world’s poorest (un.org., 2015). Furthermore, the MDGs are all interrelated; as one goal is reached, movement towards the next goal is advanced as well (Akinboade and Kinfack, 2014). An illustration of this is given by the authors, where access to clean and safe drinking water will have a positive impact on health-related outcomes. Likewise, accomplishing universal primary education would in turn assure greater gender equality as more girls are enrolled in school (Akinboade and Kinfack, 2014).

The enthusiasm, the newfound prominence, and the practically universal acceptance of the value of the MDGs occasionally overshadow the importance of understanding the ways in which the goals influence in shaping primacies, the actions of stakeholders, as well as the following consequences (Fukuda-Parr et al., 2014).

2.2.2 Corporate Social Responsibility

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| P a g e 24 been put on traditional organizations in terms of societal pressure and expectations (Schmeltz, 2014). As of today, organizations are not only considered legal entities intended to generate profits and create job opportunities; instead they are required to play the role of responsible co-citizens, conscious of social and environmental issues (Schmeltz, 2014). Furthermore, CSR is described as discretionary business practices and contributions of corporate resources intended to improve societal well-being (Korschun et al., 2014). Further, it is argued that adopting CSR to organizations may facilitate the communication of underlying company values, which in turn may lead employees to create an organizational identification to the idea of CSR (Korschun et al., 2014; Schmeltz; 2014). This may also trigger organizational benefiting behaviors as CSR becomes part of the business’ daily practices (Korschun et al., 2014).

Porter and Kramer (2006) mention that CSR can be much more than a cost, a constraint, or charitable act, it may in fact provide organizations with a source of opportunity, competitive advantage, and innovation. Further, the construct of CSR bridges micro and macro levels and has been found to positively impact employee performance, attractiveness to future employees, commitment, identification with the organization, organizational citizenship, creative involvement, and enhanced employee relationships (Glavas & Kelley, 2014).

Furthermore, Giuliani (2014) argues that the concept of CSR has shifted the attention towards a more social and environmental repercussion of business operations, where firms are encouraged to adopt CSR practices as part of their sustainable operations. The author further mentions that this shift has resulted in an increased pressure for companies operating in developing countries, as the awareness of including sustainable development into business strategies has resulted in firms being exposed to NGOs and the media.

2.2.3 Sustainable Development in developing countries

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dimensions of sustainability; i.e., economic, social, and environmental (Luken & Castellanos-Silveria, 2011). In recent years, the issue of maintaining a sustainable business development in manufacturing has become a vital subject due to the various environmental impacts such as earthquakes, terrorism, and hurricanes to name a few (Gunasekaran & Spalanzani, 2012). It is no longer considered an option to be successful purely in one’s business, nowadays it has become an obligation to protect the environment, as well as ensuring safety and welfare for those alive today and for future generations (Gunasekaran & Spalanzani, 2012).

According to Mani et al. (2014) manufacturers must increase flexibility, supplier networks, and speed of production systems while at the same time reduce energy consumption and environmental impacts in order to remain globally competitive. Moreover, Lenssen and Wassenhove (2012) argue that sustainable manufacturing is connected to the resources required for meeting Asian energy requirements and consumption. The authors further discuss that if manufacturing in Asia is formed in an unsustainable way, it will have a global impact on demand and resource supply, distribution and energy generation, and market pricing. Furthermore, as sustainability is directly linked to the natural environment and poverty issues of developing countries, modeling sustainable manufacturing that minimizes the negative environmental impact and conserves energy and natural resources are considered safe for employees, communities and consumers, and is believed to be economically sound (Khavul and Bruton, 2013; Mani et al., 2014).

2.3 Sustainability Marketing Strategy in developing countries

The term ‘Sustainability Marketing Strategy’ emphasizes added value to customers as well as the establishment of long-lasting customer relationships, beneficial for businesses, society and environment (Kumar et al., 2012). As issues related to Sustainability and Sustainable Development will become more of an obligation in the future, accompanied by the fact that stakeholders increasingly influence organizations to adopt Sustainability in their marketing strategies, authors argue that it is crucial to implement sustainable criteria into marketing strategies in order to survive (Kumar et al., 2012).

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| P a g e 26 Sustainability as a key factor that has emerged within marketing strategy and that has become the focus of attention. It is widely argued that the main objective when forming marketing strategies is to gain competitive advantage (Kumar et al., 2012; Lenssen & Wassenhove, 2012). However, as companies are urged to acknowledge that Sustainability is no longer an option but instead a requirement; recognizing the importance of implementing sustainable development into organizations’ business practices and strategies is considered vital in order to achieve competitive advantage (Kumar et al., 2012). Regardless of the fact that many authors highlight the link between marketing and Sustainability, limited research exists presenting the relationship and link between the two. It is therefore considered vital to study the connection between marketing strategies in relation to Sustainability and thus, understand the difficulties linked to achieving environmental, social, and economic goals (Rundh, 2003; Kumar et al., 2012; Zou et al., 1997).

Moreover, Lenssen and Wassenhove (2012) claim that developing countries may come to act as an engine for growth that in turn may carry the world economy, provided that organizations have a well-defined strategy. It is further argued that businesses’ contribution to the transformative shift in the world economy may turn out to be the most essential driver for development emphasized by the objectives of sustainable and inclusive growth (Lenssen & Wassenhove, 2012).

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Research Questions and Frame of Reference

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3. Conceptual model

This chapter includes the study’s proposed research model, established in order to present the relationship between Sustainability Marketing Strategy, growth opportunity/competitive advantage, and how these may lead to an accelerated achievement of the Millennium Development Goals (MDGs).

3.1 Proposed Research Model

The literature review revealed that organizations may gain growth opportunities and competitive advantage through the employment of sustainable marketing practices, however; it is claimed that designing an effective marketing strategy is a complex task that requires a diverse set of strategies and a unique set of assessments. Therefore, the purpose of this research is to create an understanding of how international firms operating on the Malaysian market employ sustainable practices into their marketing strategy.

The study’s proposed research model (see Figure 1) illustrates that employing Sustainability Marketing Strategy in an organization’s business that addresses social,- economic,- and environmental issues, may provide organizations with an increased growth opportunity and competitive advantage, which in turn may accelerate the achievement of the Millennium Development Goals.

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| P a g e 28 As a result of the previously conducted literature review, the following assumptions were established and therefore studied in relation to the subject matter:

Ø Employing a Sustainability Marketing Strategy within an organization will lead to growth opportunity and/or competitive advantage.

Ø Employing a Sustainability Marketing Strategy within an organization will lead to an accelerated achievement of the MDGs.

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Methodology

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4. Methodology

In order to successfully conduct and interpret research within business, it is crucial to have an understanding of the theoretical constructs and practical instruments of research. This chapter will therefore cover the methods and approaches used to collect and analyze the gathered data. Moreover, the philosophical standpoint within the study will be explained, followed by a justification of the practical methodology used. Lastly, methods of data collection, data analysis, and a discussion of quality criteria for qualitative research will be presented.

4.1 Research philosophy and approach

As the overall aim with this research is to create an understanding and a deeper knowledge within the subject field, it is vital to elaborate and reflect upon the various philosophical standpoints taken (Saunders et al., 2009).

Bryman and Bell (2011) as well as Saunders et al. (2009) mention that there are two major philosophical standpoints within research, known as; ontology and epistemology. The authors discuss that each of these standpoints contain important differences that will influence the way in which the researcher thinks about the research process. The former is referred to questions regarding what constitutes reality and how we can understand existence, while the latter constitutes valid knowledge and how we can obtain that knowledge (Bryman & Bell, 2011; Saunders et al., 2009). The authors argue that there are two separate aspects discussed within ontology known as objectivism and subjectivism. Objectivism holds the belief that social entities exist in reality, external to social actors concerned with their existence. Moreover, within subjectivism it is believed that social phenomenon stems from the perceptions and consequential actions of the social actors concerned with their existence. Moreover, epistemology is a branch of philosophy that constitutes acceptable knowledge within a field of study and is concerned with the nature of reality itself (Bryman & Bell, 2011; Saunders et al., 2009).

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| P a g e 30 authors, positivism is one of the epistemological positions advocating the application of methods of the natural sciences and implies that there is valid knowledge only in the obtained knowledge. Moreover, positivism suggests that the physical world is functioned according to general principles and laws (Bryman & Bell, 2011; Saunders et al., 2009). These laws imply that knowledge is created through the gathering of data, which can be confirmed by the senses, and that science has to be performed impartially (Bryman & Bell, 2011). Bryman and Bell (2011) discuss interpretivism as a contrast to positivism and refers to the importance of understanding the differences among humans and their role as social actors. The authors further mention that interpretivists believe that reality is multiple and relative and the knowledge gained within this discipline is socially constructed. In order to understand the various causal relations the researcher is required to apply empathy and view the researched field from the point of view of the social actors within the study (Bryman & Bell, 2011; Saunders et al., 2009). The last position within epistemology is known as realism and is quite comparable to positivism as it assumes a scientific approach to the development of knowledge (Saunders et al., 2009). Moreover, realism is related to scientific enquiry and holds the belief that what the senses show us as reality is the truth, and that the objects under study have an existence that is independent of the human mind (Saunders et al., 2009).

The aim of this research is to create an understanding of how international firms employ sustainable practices into their marketing strategy, and whether this may provide organizations with an increased growth opportunity and competitive advantage. In order to collect the appropriate data and answer the purpose of the study, actors within the selected organizations holding valuable knowledge regarding the field of the study will be chosen.

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Methodology

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epistemology and realist epistemology as the aim is to study differences between social actors with the basic belief that what the senses show us as reality is considered the truth.

4.2 Practical methodology

4.2.1 Research approach

Inductive and deductive research comprises two types of theories, or approaches, that consider the relationship between research and theory (Bryman & Bell, 2011). The authors further explain that inductive research theory involves a “bottom up” approach where the researcher moves from specific observations to broader generalizations and theories, while deductive research represents the most commonly held view of the relationship between theory and research. Further, the deductive process involves using already existing theories to lay ground for formulating research questions and conclusions are drawn based on logic reasoning (Bryman & Bell, 2011).

When investigating various methodological issues, there are two research methods available that comprise two different research approaches; quantitative and qualitative research (Bryman & Bell, 2011; Saunders et al., 2009). As the name suggests, the former focuses on quantification and is often employed when the aim is to generalize the findings to the population. The latter emphasizes words rather than quantification and is an in-depth exploration of what people think, feel, or do (Bryman & Bell, 2011; Saunders et al., 2009). Subsequently, this study will involve a deductive research approach where theory will lay the foundation for the developed research questions and the conclusions drawn will be based on logical reasoning. Moreover, the study will hold a qualitative nature, as the focus is to gain in-depth knowledge within the field of subject.

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| P a g e 32 that includes observing and explaining a subject without modifying the surroundings in any way.

As the aim of this study is to create an understanding of whether employment of sustainable practices into a firm’s sustainability marketing strategy may give international firms a competitive advantage and an increased growth opportunity, the study will comprise an exploratory research design. Moreover, as the field of sustainability marketing strategy in relation to the MDGs comprise a new and unexplored subject that may result in limited theories, an exploratory research approach is considered most suitable in order to meet the purpose of the study.

4.2.2 Research strategy and data collection method

The choice of research strategy is highly guided by the type of research questions and objectives set, the philosophical foundation, the extent of existing knowledge, as well as the amount of time and resources available (Bryman & Bell, 2011; Saunders et al., 2009). Multiple case studies are often used when exploratory research design is employed and where the aim is to gain in-depth understanding regarding a specific subject field (Saunders et al., 2009). As the study aims at creating an understanding of how international firms employ sustainable practices into their marketing strategies, and thereby gaining in-depth knowledge of the context of the research, multiple case studies will be conducted.

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As a part of the ethnographic tradition, fieldwork will be conducted as the aim is to achieve an understanding of others where interaction with the human targets in their respective home ground is crucial (Van Maanen, 2011). It is also argued that conducting fieldwork observations will provide the researcher with rich, concrete, as well as complex and truthful accounts of the social setting under study (Van Maanen, 2011). Through the process of fieldwork the primary sources of the data gathering are people’s experiences, attitudes, and viewpoints on certain matters (Palmer et al., 2014).

This research focuses on triangulation as multiple data sources are employed with the aim to produce in-depth understanding of the subject matter, as well as further increase the validity of the study. This technique if often used within qualitative research in order to ensure that the data gathered is comprehensive, rich, robust, and well developed (Bryman & Bell, 2011). This study focuses on combining semi-structured,- and open interviews together with observations at four international manufacturing firms operating on the Malaysian market. Moreover, as the aim is to gain richer knowledge within areas such as international marketing strategy and sustainability marketing strategy, personnel with extensive knowledge in company strategies and sustainable development work, such as CEOs and managers, are considered most suitable to answer the interview questions.

4.2.3 Operationalization and measurement of variables

The purpose of an operationalization is to connect the concepts presented in the literature review into comprehensive words and thereby make the concepts measureable (Bryman & Bell, 2011; Zikmund et al., 2011). Eliasson (2012) argue that in order for the study’s concepts to be measureable, a decision must be made with regards to how they should be measured in the study. This decision is made through various types of definitions (Eliasson, 2010).

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| P a g e 34 Furthermore, the operational definition and measure was excluded from the operationalization table (see Figure 2) as the conceptual definition of each concept stated in the literature review will lay the foundation for the study.

Table 1 - Operationalization

Concept Conceptual Definition Operational

Definition/Question

(See Appendix 1)

International Marketing Strategy

Aiming to present international marketing as an application of marketing orientation and marketing capabilities to

international business (Mühlbacher et al., 2006). 1.1 1.2 1.3 1.4 4.3 4.4 Sustainable

Development Works on a ‘Triple Bottom Line’ i.e., people, planet, profit, and is regarded as a long-term vision dealing with the development of a strategy based on ethical and moral principles (Kumar et al., 2012; Mokthsim & Salleh, 2014). Comprises environmental, - economic, - and social issues (Mariadoss et al., 2014; Kumar et al., 2012; Mokthsim & Salleh, 2014). 2.1 2.2 2.3 2.4 2.5 2.6 3.3 4.4 4.5 The Millennium Development Goals

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Sustainability Marketing Strategy

Emphasizes added value to customers as well as the establishment of long-lasting customer relationships, beneficial for businesses, society and

environment (Kumar et al., 2012). Implementing sustainable

development into organizations business practices and strategies is considered vital in order to achieve competitive advantage (Kumar et al., 2012). 2.2 2.5 2.6 3.3 4.1 4.2 4.3 4.4 4.2.4 Sampling technique

The sampling for this specific research was in regards to international manufacturing companies operating on the Malaysian market. In order to gain deeper knowledge regarding how sustainable practices may be employed into a firm’s marketing strategy it was considered most appropriate to select manufacturing companies as they operate in ways that may have an immense impact on the environment. As Malaysia is a developing country, the focus was to include medium and large-sized international firms, holding more than 250 employees, with the intention of understanding how they may adapt their marketing strategies according to the specific market. Furthermore, the sampling frame was prepared through the use of a commercial list provided by the Ministry of Foreign Affairs in Sweden, which included international firms operating on the Malaysian market (Swedenabroad, 2015).

Moreover, this research includes four case studies and the sample organizations are four international manufacturing firms operating on the Malaysian market. Within the four organizations, a few individuals were interviewed for which the list and details of the dates as well as position can be found in the ‘List of References’ at the end of the dissertation.

4.2.5 Data analysis method

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| P a g e 36 choice of data analysis method is based on data reduction and crystallization, data display, as well as conclusions drawing and pattern matching (Miles & Huberman, 1994).

The first method is called data reduction and crystallization which comprise choosing, placing, shortening, conceptualizing, and lastly, transforming the gathered material (Miles & Huberman, 1994). Data reduction and crystallization in regards to this research was conducted through careful screening of all the empirical data gathered, as well as transforming the gathered material into each defined concept. Moreover, according to Miles and Huberman (1994) the next step within the data analysis method is data display, which includes the way in which the data is presented and organized, for instance through the use of graphs, charts, or matrices. This way, the gathered data is summarized in a composed way (Miles & Huberman, 1994). Finally, the last step in a qualitative data analysis method is conclusion drawing and pattern matching which comprise the main analysis of the gathered data. Further, this step requires the researcher to decide what the organized material signifies by observing inconsistencies, consistencies, and patterns, as well as identifying fundamental streams in order to draw conclusions (Miles & Huberman, 1994). The last step within the data analysis method was conducted through a careful observation of inconsistencies and consistencies, as well as pattern matching across all defined concepts of the study.

4.3 Ethical considerations

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individuals participating in the study have the right to be informed regarding the nature of the study and may thereafter decide if they wish to participate in the research or not (Miller et al., 2012).

The four organizations participating in this research have accepted the request to include the firms’ names in the study. All participants were well informed about the subject matter and the study’s aim before proceeding with the data collection. Furthermore, the participants were given the option to stay anonymous in the study and confidentiality was guaranteed with regards to the collected material.

4.4 Quality criteria

A good qualitative study may help us “understand” a situation that would otherwise be puzzling or perplex (Golafshani, 2003). Golafshani (2003) argues that the concept of ‘quality’ in qualitative research is with regards to the ability to create an understanding of the phenomena studied. Furthermore, in order to reduce the possibility of getting an answer wrong, attention must be put on two specific emphases of research design, namely; reliability and validity (Bryman & Bell, 2011; Saunders et al., 2009; Ghauri & Grønhaug, 2010). These are known as quality criteria that are considered prominent and important issues when evaluating business and management research (Bryman & Bell, 2011). The first refers to the consistency of a measure of a concept, meaning to what extent the techniques for data collection and the analysis procedures will generate consistent findings. The latter is a concept used for assessing whether a concept measures what it is intended to measure, meaning to the extent to which the findings provide an accurate representation of the phenomena they are intended to represent (Bryman & Bell, 2011; Saunders et al., 2009; Ghauri & Grønhaug, 2010).

To ensure that the quality criteria of the study is met in terms of semi-structured,- and open interviews, reliability as well as content,- construct,- and external validity will be employed. 4.4.1 Quality criteria for observations

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| P a g e 38 In order to ensure that the quality criteria for the observations were met, all interviews were recorded, field notes were taken, and all factory visits were photographed and documented. The main argument for using various data collection methods, i.e., triangulation, was based on the need to check for consistency of the findings.

4.4.2 Content validity

Authors argue that content validity, or face validity, refers to the extent to which the measures of a study represent all facets of a given social construct (Bryman & Bell, 2011; Ghauri & Grønhaug, 2010). By exposing the study’s interview guide to experts within the field of subject, and have these review how well the measurement instrument represent that measure beforehand, content validity can be increased (Bryman & Bell, 2011; Ghauri & Grønhaug, 2010).

In order to assess the content validity of the study, an interview guide was sent out by e-mail in order to pre-test the developed questions for the semi-structured interviews. Furthermore, the interview guide was sent out to experts within the field of study who then reviewed the stated questions and judged how well they responded to the research questions and the purpose of the study.

4.4.3 Construct validity

According to Ghauri and Grønhaug (2010), construct validity is described as the degree to which an operationalization measures the concept which it intents to measure. This is further explained as the degree to which inferences can reasonably be made from the operationalizations in a study to the theoretical constructs from which the operationalizations are made (Bryman & Bell, 2011; Ghauri & Grønhaug, 2010).

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4.4.4 External validity

External validity is referred to as the degree to which generalizations can be made, thus it addresses the study’s ability to be assessed and generalized in another social setting or with a different population (Bryman & Bell, 2011; Saunders et al. 2009). However, Saunders et al. (2009) also argue that as long as a researcher does not claim that the results, conclusions, or theory of a conducted case study is generalizable, but instead made with the intention to contribute to the understanding of the studied phenomena, external validity does not have to be addressed in the same way.

In order to ensure the external validity of the study, multiple case studies were conducted and the findings in this study are based on a cross-case analysis. Moreover, the study’s interview guide was developed based on previous research which increases the external validity and thereby the generalizability of the study. Additionally, the study’s chosen sample covers several industries in order for the research to have good reliability in a qualitative context. 4.4.5 Reliability

The consistency of a research, meaning to what extent an experiment or test yields the same results on repeated trials is known as ‘reliability’ (Bryman & Bell, 2011). The repeatability of a study will be strengthened if the results remain the same and if a researcher can replicate the same study again in another social setting without the results being affected (Bryman & Bell, 2011; Ghauri & Grønhaug, 2010). Without reliability researchers would be unable to draw satisfactory conclusions, formulate theories, or make claims about the generalizability of the study (Saunders et al., 2009). Furthermore, the reliability of the study was assessed by conducting multiple case studies and interviews with the chosen firms, together with semi-structured and unsemi-structured interviews with several respondents at each firm, as well as extensive fieldwork in terms of observations.

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5. Empirical Data Presentation

This chapter presents the empirical data gathered at four international manufacturing firms operating on the Malaysian market. Each company is introduced briefly, followed by a presentation of the gathered data according to the study’s four main concepts; International Marketing Strategy, Sustainable Development, the Millennium Development Goals (MDGs), and Sustainability Marketing Strategy. Moreover, in consent with all four companies involved in the study, company name and work titles of all respondents will be published. All respondents’ and their respective position and work title is provided in the List of References.

5.1 Case One – Toyota Material Handling International

Toyota Material Handling International (TMHI) is dedicated to manufacturing high quality products and service. The company is situated in Shah Alam, Malaysia, and operates on a global level. Toyota has a thriving history since 1956 and holds the belief that creativity and innovation are the main drivers for the company in order to become the world’s leading brand of material handling equipment. Today, Toyota has sales and service amenities in 90 countries spread all over the world, and over 2 million entities have been sold to satisfied customers.

5.1.1 International Marketing Strategy

Regarding the concept ‘International Marketing Strategy’ (IMS), TMHI’s General Manager considers it an incredibly large term used to describe different actions taken with regards to how one markets ones business in different countries, cultures, and markets (Interview with General Manager, 25-02-2015). Moreover, several respondents at TMHI agree with the General Manager and also argue that IMS comprises different ways of doing things.Meaning, different countries have different laws and regulations and diverse boundaries and thereby different ways of managing business. It is therefore crucial that all marketing strategies are adapted according to what country and culture the firm operates in (Interview with respondents at TMHI, 23-02-2015; 24-02-2015).

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TMHI’s General Manager claims that having a well defined and structured IMS is crucial not only due to the large amount of divisions the company holds, but also due to the high demand and thereby increased production required. Moreover, the General Manager is responsible for a total of seven countries, or divisions, and all market strategies are adapted to each respective division according to culture, laws and regulations, and boundaries in each respective country (Interview with General Manager, 25-02-2015).

Furthermore, each division is also required to adopt and follow the concept known as; Toyota Production Systems (TPS), which is a socio-technical system comprising management practices and philosophies and has its main focus on eliminating waste and use less components to produce for example a truck in an efficient way (Interview with General Manager, 25-02-2015). According to the General Manager, TPS has been incorporated within the organization for many years and it is considered a part of the organization’s gene to practice LEAN manufacturing. The system is also regarded as a type of international marketing strategy as it gives all employees well-defined responsibilities in each production step and calls each team member to strive for global improvements (Interview with General Manager, 25-02-2015).

5.1.2 Sustainable Development

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| P a g e 42 Toyota’s code of conduct as well as through company leaflets and internal e-mails to staff members (Interview with respondents at TMHI, 23-02-2015; 24-02-2015).

Furthermore, TMHI’s General Manager claims that nongovernmental organizations (NGOs) have had a significant effect on the company as they pressure organizations to contribute to Sustainable Development. Further, it is argued that for TMHI this has meant focusing on LEAN production and incorporating the TPS as rules and guidelines for all employees to follow (Interview with General Manager, 25-02-2015). Respondents at TMHI also claim that the organization is involved in several activities with the aim at giving back to the environment and society. One example of TMHI’s involvement in environmental issues and its engagement in sustainable practices is its cooperation with BMW where experience is shared and thereby new knowledge created on more ways to become sustainable. It is also claimed that TMHI is continuously investing in research and development in order to learn about new technologies that may minimize pollution and thereby preserve the natural environment (Interview with respondents at TMHI, 23-02-2015; 24-02-2015).

TMHI’s distributor UMW Toyota Motor (UMW) owns a significant share of TMHI and due to this fact, TMHI’s General Manager argues that it is of great important that UMW employs sustainable practices in order for the two companies to be aligned with one another and to share the same goals and visions. In order to ensure and maintain satisfactory cooperation, it is considered vital to make sure that UMW’s values are aligned with TMHI’s (Interview with General Manager, 25-02-2015). Furthermore, UMW claims that it is engaged in several activities aimed at helping the natural environment and giving back to society (Interview with respondents at UMW, 26-02-2015). However, according to TMHI’s General Manager, most activities carried out on the behalf of UMW are not pre-planned or structured beforehand, but instead an active reaction to various societal situations and issues. UMW also has a developed Corporate Social Responsibility program incorporated in its business plan where several activities to promote a Sustainable Development for the Malaysian market has been undertaken (Interview with respondents at UMW, 26-02-2015).

5.1.3 The Millennium Development Goals

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the goals since they are highly involved in waste management, poverty issues, and sustainable development. UMW’s developed CSR program is also an example of its engagement in activities aimed at giving back to society and the natural environment (Interview with respondents at TMHI and UMW, 26-02-2015).

5.1.4 Sustainability Marketing Strategy

TMHI claims to have a well-developed Sustainability Marketing Strategy but since the majority of the sustainable practices and activities are carried out by its distributor there is not enough time and resources put on developing it further and implementing it more efficiently. However, both TMHI and UMW argue that having a well-developed Sustainability Marketing Strategy does give the company a competitive advantage and increased growth opportunities as it positions the company as sustainable and environmentally friendly; hence customers become aware of its engagement in various societal issues and their ways to improve these (Interview with respondents at TMHI and UMW, 24-02-2015; 26-02-2015).