The Practice of Corporate Social Responsibilities in the Brewery Industry

THE PRACTICE OF CORPORATE SOCIAL RESPONSIBILITIES IN THE BREWERY INDUSTRY (A CASE STUDY OF THE NIGERIAN BREWERIES AMA ENUGU)

Socially responsible marketing which incorporates the societal marketing concept goes above and beyond responsive marketing.  Some argue that you can not practice socially responsible marketing if you do not appreciate the importance of being responsive.Other argue that being too socially responsible could create problems for the company.

The question is how socially responsible are Nigerian marketers.  Let us look at some of the indices and see how far Nigerian marketers go.

Many organizations pursue the protect objectives relentlessly.  Some take cognizance of the needs of the customers, but most do not as they operate under an environment very hostile to customers.  Just take the perennial fuel scarcity as an example and see how “traders” who call themselves marketers are relegating customers to the background in their pursuit of profit, profit and more profit.

Many companies care only about that section of stakeholders who are part and parcel of their profit objective, or who if not carefully cultivated would adversely affect their profit bottom line.

They are prepared to ride rough – shod over any stakeholders who can be “cheated” without the company being adversely affected, because the stake have no alternative.  How many companies respond positively to the cries of their employees, through negotiations, work to rule or at worst strike actions for better working conditions in consonance with the economic realities of the time.

The normal answer is a lock – out or outright dismissal.  How many companies respond positively to the cries of their dealers for a better deal.  The usual answer is threat or cutting off the “troublesome” dealer.

Many companies in Nigeria do not understand anything about value marketing, same goes for sense of mission marketing.  To them what is important is simply to dispose their products at a profit.  Value is anything that can give them immediate profit.  Their sense of mission is encapsulated in the profit objectives instead of the other way round.

Which Nigerian company is truly innovative.  The word is not yet in their dictionary of business.  Nigeria is more or less a dumping ground for antiquated technologies.  To compound it all, the replacement parts may not even be available to keep the “brittle bones” of the machines together.  In the same rein Nigerians are not given adequate training to deal with the cups and headaches associated with these antique technologies.  Just go round the stakes and see the billions of Naira tied down in antiquated technologies.  Some projects after billions of Naire and years of downs and downs have refused to justify the huge expenditure of money, time, and energy – the Ajaokuta steel complex is a typical example of trying into use 19^th century technology in the 21^st century and it is only in Nigeria that one can attempt to perform the miracle of resurrecting the technologically comatose or shall we say deed.

Societal marketing is not built on mere rhetoric’s. it requires commitment to action.  How many Nigerian companies have recalled deficient or dangerous products.  How many companies have warned on dangerous food.  When a vehicle steering or braking system is defective and the vehicle is not recalled, the company is being dangerously and unpardonably irresponsible.  Where a drug they manufacturer mixes the wrong combination of ingredients, or mixes chalk for an analgesic, antipyretic or antibiotic, it is being dangerously, murderously and unpardonably irresponsible.  May be Nigeria need a Ralph Nader to lead the against, fake, adulterated and substandard products.

Nigerian manufacturers and businessmen, most especially importers are good at negative trading activities like counterfeiting and cloning.  Others try to be more positive by imitating and adapting.

A counterfeit duplicates the market leaders products and packages and sells on the ground market.  Many motorists have suffered untold hardship as a result of this.  Even drugs are cloned, one buys a brand of antibiotic only to discover after use that is not efficacious.  Doctors are even mere troubled as some times they end up confused as to whether their diagnosis or therapy is defective, not knowing that the defects comes from the drugs.

Clones emulate the leaders products, names and packaging, with slight variations, which may not be discovered by buyers.  A cloner calls its product Philips instead of Philips, sunny instead of sony, Novagen instead of Novalgin, Dolvilan instead of Dolviran.

We shall not touch on imitators and adaptors as they actually try to differentiate offerings, and even attempt to improve on them.

Taking cognizance of the above, one has a lot to be grateful for, to the national agency for food and drugs administration and control (NAFDAC) for their crack down or counterfeiters and cloners of drugs and food.  It is surprising that a multinational company like Cadbury can allow its Nigerian operatives to try and pas across the consumers, products that could be injurious to health having failed to meet certain standards on safety and quality (see Hall mark newspapers October 2002: 31 and 35).

Counterfeiting of drugs is a global problem.  Even the European federation of pharmaceutical industries and association is worried about these, and believes that financial gain generally and criminal intent motivated by lack of criminal penalties and enforcement against pharmaceutical counterfeiting, as against the more several penalty against traffickers of illegal drugs like cocaine and heroine have caused the illicit business to continue unbated (Funso Abdullahi Thisdey Sunday Newspaper Feb. 24 2002:21).

2.1     CRITICISMS OF SOCIAL RESPONSIBILITIES:

In dealing with this issue of socially responsible marketing, one must point out that same criticisms have been leveled against the concept.

Palmer and Hartley (1996:21 – 212) pointed out that followers of Milton Friedman the Noble Laureate feel that firms should concentrate on doing what they are at best – marking profit for the owners – – – donations to social causes should be left to the government.  Moreover engaging in social causes might make some firms too powerful.  Also to meet these social causes, companies may tax consumers wit increased prices – this is a philosophical criticisms.

A more pragmatic argument is that companies engage in social causes as a cheap way of gaining attention and unique selling proposition.

Also firms tend to be selective in which causes or sections of the society thy support.  They tend to concentrate on causes, which are very popular, whilst forgetting the less popular but more important causes.

Other critics have stated that having a double bottom line of values and profit is not easy.  Such policies cost money, which some critics claim is “Wasted on righteousness” they believe that once as an organization you add social goals to the demand of serving customers, making profit and returning value of shareholders, you tie yourself up in knots (Kotler and Arns rong 2001:748).  They feel that this social cause marketing would end up hurting the bottom line.  Not all companies are strong enough to measure their successes as much by its social contribution as by its financial success.

If a company wants to practice socially responsible marketing successfully, it must continuously evaluate its effort by means of social audit which is a systematic assessment of a firm’s objectives, strategies and performance in the domain of social responsibility.

Social audit consists of five (integrated) steps:

• Recognition of a firm’s social expectations and the rationale for engaging in social responsibility endevours
• Identification of programmes consistent with the company mission.
• Determination of organizational objectives and priorities for programes and activities.
• Specification of the type and amount of resources necessary to achieve the objectives.
• Evaluation of results and assessment of further involvement (see Berkowitz et al 1998:112 – 113)

Social responsibility marketing, no matter whatever criticisms are leveled against it have come to stay.  The world is so worried about the planet Earth that marketers need to understand that it is no longer “business as usual” companies have to appreciate the effect of their operations on the customers, the shareholders, the general public and the environment.

The Valdez principles for environmental concerns and corporate responsibility was drawn up by the coalition for environmentally responsible economics, soon after the huge oil Tanker Exxon Valdez spilled 11 million gallons of crude oil in Alaska’s prince William sound, and causing ecological disaster of unimaginable magnitude – killing tens of thousands of birds and animals, and polluting more than one thousand six hundred Kilometers of the Alasken coastline.

The Valdez principles encourage companies to

• Eliminate pollutants, minimize hazardous wastes, and conserve non renewable resources
• Market environmentally sate products and vices.
• Prepare for accident restored damaged environment
• Provide protection for employees who repot environmental hazards.
• Appoint an environmentalist to their boards of directors, name an executive for environmental affairs, and develop an environmental audit of the global operations to be made available for public inspection.

We believe that these principles are very necessary, more so in developing economics which do not have to facilities for environmentally monitoring like the developed societies.

One must not fail to point out though, that socially responsible marketing cannot be separated from a country’s marketing ethics, which on its own cannot be separated from the country’s subcultures.

Whereas marketing ethics deal with the principles, values and standards of conduct considered appropriate for marketers, the marketing culture deals with the shared values, beliefs, ideas and attitudes of marketers in doing business.  It comprises the effective rules of the game, the boundaries between ethical and unethical behaviour, codes of conduct in marketing activities.  So how sociresoponsible marketers are in a society, is to large extent intertwined with the marketing ethics and culture of the society.

• WHAT IS COCIAL RESPONSIBILITY AND ETHIC MARKETING

In today’s marketing activities, many businesses devote more attention to what is called their social responsibilities.  There are a lot said about such obligation, but view points differs as to what constitutes the firm’s social responsibilities.  Some scholars argue that the responsibility of business is to make profit.  By doing so, the society benefits and people’s material needs are met.  However, other scholars are of the opinion that the responsibility of a business is to satisfy the society.  The firm belongs to the people and thus has an obligation to the different sections of the society – suppliers consumers, stock brokers, employees, local community, government and the general public.  The social responsibility of business is a logical extension of the societal marketing concept and social marketing.

In recent years, a lot of question about marketing practices have been asked.  Many people argue that marketing is not being practiced the way it should be.  They maintain that the existence of consumerism is an evidence of this fact.  In their opinion, the marketing concept is not being practiced by many business form.  Even in situation where firms satisfy consumer wants for automobiles, questions can be asked about the uncovered social cost of heavy pollution, road accidents and high maintenance cost that will result with automobiles, coca cola and their soft drink firms catered to the demand of Nigeria.

Consumers for a convenience disposable soft drinks cans in the early 1980’s.  the cans constituted a littering problem in the whole country.

These situations have crated more pressure for social marketing and have led to the development of the societal marketing concept; which focuses on long run consumers’ and society’s well being.  The concept f social responsibility requires companies to consider the implication of their actions within the whole social system, and the system holds the company responsible for any harm or damage the company’s action will have any where in that system.  Social responsibility is the responsiveness of a business to the problems and interests of the society.  It is carrying out the moral obligation of business to the society.

Marketer’s social responsibilities flow out of their conception of business ethics. Ethics I the study of right and wrong.  The conduct of most business people are highly unethical.  There are practices such as false or misleading advertisements, overpriced, shoddy goods, bribes to loan business, industrial pollution, and defective, dangerous and harmful products.  There are, also greedy and exploitative marketers who contribute to the criticisms of marketing and draw attention to the issues of social responsibilities and ethics.  Business or marketing ethics should not be confused with legal requirements.  The low stipulates what a company cannot do.  What a company can do is legal, but may not be right.

For example, it is not illegal to use high pressure tactics in persuading people to buy, this does not mean that it is right in every situation.  The ethics of business are changing, and therefore cannot be generalized.  There are ethically difficult situation that marketers could face living their careers.  Marketers needs a set of principles that will help them determine the normal gravity of each situation without appearing ineffective or immoral.  Some of the situations according to Philip Kotlr (1980,706) are:

• You work for a cigarette company and up to now have not been conceived that cigarette causes cancer. A recent report have come across your desk that clearly shows the connection between cigarette smoking and cancer.  What would you do?
• Your R and D department has modernized one of your products, it is not really “new and improved” but you know that putting this statement on the package and in the advertising will increase sales. What would you do?
• You are interviewing a former product manager who has just left a competitors company. You are thinking of hiring him.  He would be more than happy to tell you all the competitors plan for the coming year.  What would you do?
• You have a chance to win a big account that will be influenced by a “gift”. You assistant recommends sending a colour television set to home.  What would you do?
• You produce an anti – dandruff shampoo that is effective with one application, your assistant says that the product would turn over faster if the instruction on the label recommended two applications. What would you do?

The list of questions can go on and on, and they are not as easy as they might appear to be.  There are usually conflicts in tackling issues involving ethics.  Marketers who decide in favour of making sales each of the above situations, could be described as immoral or unethical in their marketing behaviour.  On the other hand, those who refuse to make sales in each situation could well be described as weak and ineffective.

Therefore, marketers should develop a set of principles or rules that will guide them properly in determine whether an action is ethical or unethical.

2.3     AREAS OF SOCIAL RESPONSIBILITY:

The role of business is to act within the frame work established by ethics and by government to satisfy the demands of the public.  Guided by this frame work, more and more businesses are becoming increasingly more socially responsible.  Social scientists have presented different lists of what constitutes areas of responsibility.

• Increasing the efficiency of marketing operations, so as to lower distribution costs and selling prices.
• Properly interpreting and anticipating consumer demand.
• Refusing to do business with unethical suppliers.
• Reducing the marketing problems of low income consumers.
• Increasing product safety
• Minimizing defective products
• Developing more informative packaging and labeling
• Elimination of malpractice in the market place
• Supporting consumer education
• Supporting the cause of social justice.
• Cooperating with government in its effort to increase consumer well being.
• Reducing environmental pollution and hazards
• Maximizing long – run profits.
• Participating in community welfare and improvement
• Efficient (or economic) use of energy and natural resources.
• Maximizing job content and satisfaction for the worker.
• Instituting a programme for hiring and training the disadvantaged and the unemployed.
• Removing all forms of discrimination against women, old people and minority groups.

Socially responsibility enables a firm to be in the good books of consuming public.  It increases consumer well – being and promote the general welfare of the public.  Failure to perform social responsibility will not only put a firm in the disfavour of the society, but also attract government control, scrutiny and regulations to protect the consumers and the general public.  It is not enough just to perform socially responsible activities.  Companies must report such activities to their customers, shareholders, employees, as well as the general public.

2.4     FACTORS AFFECTING SOCIAL ETHICAL STANDARD:

The ethical standard are influenced by many factors in the society.  The ethical standard tends to be higher when the following factors are present in the society.  (Rom Mariem 1979 P. 676).

• Public disclosure, publicity, media coverage and better communication.
• Increase public concern, public awareness consciousness and scrutiny, better informed public and societal pressure and social expectations for the role of business.
• Government regulation, legislation and intervention.
• Greater sense of social responsibility and grater awareness of its implications by business.

On the other hand, the ethical standards will be lower when the following factors are present in the society.

• Low societal standards, social decay, more permissive society, materialism and hedonism, loss of church and home influences, less quality desires, more quantity desires.
• Competition, search to succeed, poor economic conditions and high cost of doing business.
• Political corruption, loss of confidence in government
• Greed, desire for gain, worship for wealth as a measure of success, individual selfishness, lack of personal integrity and moral bibre.
• Pleasure profit from within the organization, from shareholders, board members and the executive.

2.5     CONSUMERISM:

When marketing falls to live up to its ethical and social responsibilities to both consumers and the society, the result is consumerism.  Consumers generally expect and demand fair treatment in the market place.  Today’s consumer is more affluent better educated more sophisticated and probably more aware.  These characteristics result in an insistence that they be treated fairly.  When they are not, there is individual or group reaction to seek redress.  This reaction or agitation is what is retried to as consumerism.  Consumerism has been defined or described in various ways.

• Consumerism is an effort to bring pressure on business firm as well as government to correct business conduct, thought unethical (craven and mills 1970 P:21)
• Consumerism is an organized movement of concerned citizens and government to enhance the rights and power of buyers in relation to sellers (Kotler 1980, P. 639).
• Consumerism is the organized efforts of consumers, seeking redress, restitution and remedy for dissatisfactions they have accumulated in the acquisition of their standard of living. (Backirk and Roth 1970 P:62).

No matter the definition embraced, the important issue is that consumerism is caused by discontent that results from an abuse of the buyers rights.  These rights which were first identified in 1962 by president John. F. Kennedy of America include:

• The right to safety: To be protected against marketing questionable products – products that may be hazardous to health or life.
• The right to be informed. To be protected against fraudulent deceitful or grossly misleading information advertising, labeling or other practices and to be given the facts needed to make an informed choice.
• The right to choose: To have access to a variety of products and services at competitive prices on satisfactory quality and services at fair price.
• The right to be heard: To be assured that consumers interest will be given full and sympathetic consideration in the formulation of government policy.

The above four rights clearly laid the foundation for consumerism.  It is the realization of these rights that made consumers organize voice their grievances.  Today, the scope of consumerism have been expended to include environmental matters affecting the quality of life.  According to Rock Efeller, (1969) “consumerism covers the various group protests against a series of social crisis such as “inadequate educational system, had core unemployment, hazardous pollution of natural resources, antiquated transportation, shametul housing insufficient and ineffective facilities, lack of equal opportunity for all and a highly dangerous failure of communication between young and oil, black and white”.  It should be pointed out that some marketing decisions aimed at satisfying the needs of the consumers may have an indirect, negative impact on the society, a person, a business or a group.

For example, consumers in Enugu buy steel, from Ajaokuta Rolling company.  But in producing the steel, the company pollutes the river used by inhabitants of Ajaokuta for fishing and swarming, so Abaokuta residents protest.

Thus, marketing concept seems to conflict with the social interest leading to consumerism.  “That after many year of marketing Rhetoric consumerism could become a powerful popular movement, proves that not much marketing has been practiced.  Consumerism is the shame of marketing”.

2.6     COMPANY’S PROFILE:

For over fifty (50) years of existence Nigerian breweries Plc is one of the leading breweries operating in Nigeria today.  The company has a wide range of products that includes alcoholic, malt and soft drinks.  The notable products in the company’s product mix include; guider, star, Amsteel Malt, Maltina, Legend, and Schepps.

The company has a large factory at Agbara, Lagos and a brewing plant at 9^th Mile Corner Ngwo, Enugu.  The company again commissioned its new ultra – modern brewery in Ama Enugu state in October 27^th 2003 by his excellency president Olusegun Obasanjo.

The Nigerian breweries Plc has depot in most state capitals of the federation to facilitate the distribution of its products.  The products of the company are seen and kwon in every nook and cranny of the southern parts of this country as well as some Northern states.

According to the Saturday champion paper May 1^st (2004) Nigerian breweries is totally committed to Nigeria cause in areas of entertainment through a vigorous music sponsorship programme which has brought international stars like Naught by Nature, Usher, Sheggy and Awilo that have thrilled Nigerian’s live in recent times, courtesy of Nigerian breweries’ star mega jam and legend fun Rampnage. Nigeria breweries is also involve in discovering and promoting local and budding artists through the star quest and star trek (star sponsored music programmes).

Foreign investment: Nigeria Breweries has through their performance attracted some foreign companies like Heineken which invested over 500 millions Euros (N70 billion).

The company have supported education in Nigeria by funding of educational and research facilities in institution of higher learning.  For example, education tax fund in which IMT is one of the beneficiaries.

Nigerian Breweries are the major facilities in the building of a sickle cell foundation.

Again they also support various health institutions through the donation of blood bank equipment, child incubators.

They have also sponsored sports like football, chess, golf, cycling, athletics, table tennis, lawn tennis.

They are also committed in the areas of tax and social responsibility, environment, employment generation and so on.  All these are done to promote their products and educate, inform the public about their products and finally to achieve the sales volume target.