Company Background

Discuss about the Sustainable Marketing for Amorepacific Singapore Pte Ltd.

Contemporary businesses are applying the concepts of sustainable marketing to support environmental friendly operations and drive profits. There is a mainstream concern for organizations to conserve the environment and resources for future generations. Consumers are increasingly motivated to support firms that adopt sustainable operations, not only in the products or services offered but also all areas affected by a company’s existence (Rosen, and Kishawy 2012). Businesses adopt ideas of sustainability that focus on the planet, people, and profit to survive the changing market environment. Companies in same industries are embracing sustainability elements as a competition tool to expand market share and grow profits while protecting the natural environment (Montiel, and Delgado-Ceballos 2014). One of these organizations is the AmorePacific Singapore Pte Ltd that operates in the Singapore’s cosmetics industry and other global markets. This company is adopting various sustainability practices in all areas ranging from extraction of resources, through the production and supply-chain, to disposal of wastes by its customers. The marketing programs incorporate activities to popularize AmorePacific’s sustainability efforts and attract more customers to buy its beauty products (Martin, & Schouten 2012). Some of the successes included in marketing activities include reducing carbon, water, and ecological footprint per unit production. There are also opportunities for improvements. Exploring the AmorePacific’s sustainability aspects in marketing strategies would provide insights for use in other companies to embrace the environment and resource protection campaigns.

AmorePacific is a global manufacturer and seller of cosmetic products. The company has origins in Korea market with history of over 70 years in the business. It has expanded over the years to venture in other Asian countries and the rest of the world. It has operations in many countries through outlets, regional offices, research centers, and partnerships with distribution intermediaries. AmorePacific Singapore is the regional headquarters for functions in the ASEAN (Association of South East Asia Nations) bloc (Amorepacific 2016a). Operations in the Singapore also involve research and innovation portfolio aimed at improving sustainability of the society, environment, and profitability. The regional offices give the company advantages in marketing the products in Singapore. AmorePacific has introduced brands to the Singapore customers. They include Laneige, Etude House, Sulwhasoo, and Innisfree. Laneige was the first sell in the market since 2004, while the others were adapted in 2009, 2012, and 2013, respectively (Amorepacific 2016a). Expansion of the product portfolio signifies successful penetration and growth in the market despite the competition from local and other global firms. At the core of this continued success is an aggressive marketing strategy inspired by comprehensive sustainability considerations for the planet, people, and profits (Smith, 2016). Each brand has a link to the sustainable policies adopted for the company’s global operations. Although there is notable success, AmorePacific faces some sustainability issues that push the company to explore innovative ways to do business. Examples include pressure for minimizing carbon footprint, water consumption, and ecological destruction (Seuring, and Gold 2013). Sustainability concepts applied in the Laneige brand are of interest in this report.

Laneige Brand

The Laniage brand was developed in 1993 and has been selling in the Singapore market for over a decade. It is designed to attain beauty for the users. Laneige brand consists of over one hundred products categorized under three purposes: skincare, makeups, and home functions (Amorepacific 2015). It applies technology that transforms water into skin-hydrating energy besides enhancing beauty. Hence, water is an essential ingredient, and thus subjects the company to water-related sustainability issues (Hoekstra, and Mekonnen 2012). Icon products under Laneige brand are: water bank moisture cream, water sleeping mask, and BB cushion (Amorepacific 2016b). AmorePacific carries out innovations through research centers to continually improve the Laneige brand and counter competition from substitutes. As a result, new products are released to the market for customers to enjoy. An important aspect of the development of these products is the sustainability implications. Other than using water in manufacturing processes, the brand requires other materials obtained from the environment. Extracting these resources has impact on the ecology (Whiteman, Walker, and Perego 2013). Additionally, processing stages require energy that affects the carbon footprint of the company depending on the source. Further, the supply chain activities such as transportation and marketing require resources that influence the carbon footprint levels. Other areas of concern include management for industrial and domestic wastes (Gunasekaran, A. and Spalanzani, 2012). Waste disposal procedures affect the carbon and ecological footprint. The Laneige brand seeks to continually reduce negative impacts on the environment to support in accordance with the company’s strategies all over the world. AmorePacific’s sustainability practices adopted in Laneige brand are evaluated and discussed in subsequent paragraphs taking into consideration the competition and other marketing forces.

AmorePacific has developed water and waste management sustainability plan to apply on all products worldwide. The Laniage brand and its products follow this policy to address issues related to water consumption and waste disposal. The company strives to conserve water resources by maximizing utilization throughout the manufacturing cycles. The strategy is pegged on three water sustainability concepts: reducing amount used, recycling, and reuse (Amorepacific 2016c). Reduction improves efficiency by optimizing usage and minimizing water loss. AmorePacific is expanding recycling activities and the use of recycled water in various functions in the company. For instance, the company is expanding uses of recycled water after primary treatment (Sahota 2014). Reuse component involves utilizing rainwater and concentrated water after ionization in some process in the company. Sustainable water consumption practices have yielded a 25 percent reduction for every unit produced in 2015 compared to 2010 usage levels (Amorepacific 2016c). Based on these performances, the company would surpass the target of 30 percent reduction by 2020. The waste management practice adopted is reduction of non-recyclable waste by expanding recycling operations. By 2020, the company seeks to attain 35 percent reduction per unit production of the 2010 non-recycled waste volumes.

AmorePacific Sustainability Strategies Water and Waste Footprint Management

AmorePacific has developed a comprehensive strategy to cut down carbon emission that is the major contributor to climate change. The manufacture and distribution of Laneige products is associated with significant emission of carbon to the environment. AmorePacific adopts best sustainability practices to attain effective control of carbon in every phase of operation. The strategy includes control of carbon from raw materials sourcing to the manufacturing process, and into transport and supply of products to the buyers (Amorepacific 2016d). The company goes beyond and creates a policy for addressing carbon footprint due to consumption of the products until the disposal stage. The company has greenhouse gas records for all operations and brands to help realize goals. AmorePacific goal was to achieve a 30 percent reduction of greenhouse gases on the 2010 statistics by 2020 (Amorepacific 2016d). Activities to achieve this aim included optimizing direct and indirect energy use in processing and supply activities. Owing to the strategy, AmorePacific accomplished the target in 2014. Despite this success, the company implements practices to reduce greenhouse gases further.

Specific practices in the purchase and production stage include increasing energy efficiency and using renewable sources. AmorePacific analyzes patterns of consuming energy to determine opportunities for improvement (Amorepacific 2016d). After identifying an area to cut down power consumption, energy saving plan is developed for all products. Adopting renewable energy such as solar power reduces reliance on highly pollutant sources and associated carbon footprint. Measures to reduce carbon emissions for transportation and supply functions are eco-driving and joint transport means. AmorePacific transport vehicles are fixed with devices to guide drivers practice more environmentally-friendly activities. The distribution drivers receive incentives based on their eco-driving scores that motivate them to improve their performances (Amorepacific 2016d). Another way of reducing transport carbon footprint involves conducting joint distribution of products to utilize full capacity of vehicles. For the product use stage, the company has developed low-carbon items by tracking the carbon emission for every product and developing one that attains reduced footprint (de Jong et al. 2015). The low-carbon Laneige items are marketed to support the company’s commitment to providing environmentally sustainable product. At the last phase of the product cycle (consumer disposal), AmorePacific develops sustainable packaging material for the products (Amorepacific. 2016h). This practice is in line with plans to reduce packaging use for every product by 20 percent by the year 2020 (Amorepacific 2016d). An example includes development of recyclable, renewable, and reusable packaging material. In 2014, the company created a post-consumer recycled packaging plastic. 

Carbon Footprint Management

AmorePacific Company values the biodiversity of natural ecosystems and strives to reduce damage associated with its operations. The company uses a significant share of raw materials extracted from the natural environment. To preserve the ecological quality for the future generations, the company implements several practices. The guiding principle is to protect, restore, and champion for diversity (Amorepacific 2016e). The biodiversity strategy includes conservation practices that strive to restore endangered or rare species to avoid their extinction. Additionally, the company seeks to manufacture products using materials that cause no harm to environment. Under the biodiversity strategy the company has managed to restore endangered species in a Koren flower farm in 2012. It has also produced books to create awareness of conserving plants in Jeju region. Other practices include sponsoring conservation activities aimed at preserving rich biodiversity in the environment.

AmorePacific adopts other sustainable concepts of utilizing and protecting biological resources. One practice is attaining sustainable use of natural resources in manufacturing processes. The company identifies the rare native species and develops cultivation activities that aim at achieving restoration and proliferation (Amorepacific 2016e). Moreover, AmorePacific invests in biodiversity research to gain a thorough understanding of different species that enables exploration for possible new applications. Under this practice, the company has established a botanical and beans garden to grow rear herbal resources. It uses the plant species in research to discover new ways of creating beauty products. Novel applications would improve the product efficacy besides helping attain maximum use in production (Despeisse et al. 2012). Consequently, high utilization ensures minimal resources used yield mass products. As a result, the company limits ecological degradation that takes place when there resource extraction rate is greater than the rate of replenishment.

As part of ecological preservation, AmorePacific cooperates with other stakeholders. The company works together with communities to influence the traditional knowledge on the use of biological resources to control depletion or the species. Local communities also use the resources for various functions despite having little awareness for conservation. AmorePacific seeks to improve the knowledge of locals using the plant species to enable sustainable extraction that does not lead to loss or rare species (Amorepacific 2016e). The company also involves the locals in cultivating the biological resources and buys them as raw materials for the production activities. It pays fair prices that ensure the profits generated are shared equitably with the locals. Both the company and the people benefit from mutual arrangement. AmorePacific can influence the use of biological resources as well as gaining knowledge of the traditional uses that can enhance research and innovation activities. On the other hand, the people receive fair prices for cultivating and supplying raw materials to the company. Incomes earned help improve their living standards.

Ecological Footprint

AmorePacific marketing strategies incorporates sustainability concepts to reach more customers and communicate company’s efforts to conserve the environment. AmorePacific applies these environmental conservation practices along the 4Ps (products, price, place, and promotion) marketing strategy for all brands. The marketing activities of Laneige brand in Singapore exhibit these attributes. The product marketing component includes all sustainability features such as quality, diversity, and safety for consumer use (Amorepacific 2016f). AmorePacific invests huge resources and expertise in the product design and processing stage to ensure the end product meets desirable sustainability performances. The products are manufactured applying practices to minimize energy and carbon footprint, optimal resource utilization, limited water consumption, and recyclable wastes. Moreover, the company carries out continuous research to improve quality and range of products. By doing this, the products meet diverse needs of customers while attaining maximum resource use (Høgevold, Svensson, and Padin 2015). The products are also tested to ensure are safe before delivering for consumption. The technology applied aims to ensure packaging materials are recyclable and safe for the environment.

The AmorePacific pricing strategy strives to attain sustainable revenues while preserving the economic wellbeing of consumers and suppliers. The company uses fair trade principles in purchasing that links to the final prices charged (Amorepacific 2016g). Its procurement program supports sourcing of safe materials at reasonable prices to create strong relationships with suppliers. Payments to suppliers aim to share the profit generated from sales. Pricing of end products strives to ensure customers can afford items offered and enhance their beauty. The prices charged takes into consideration all costs to ensure sales yield sustainable profit margins. Place component involves distribution strategies to avail the products to customers (Heikkurinen, and Bonnedahl 2013). Numerous sustainability issues surround supply chain activities. Transportation of goods accounts for significant carbon emission as many vehicles are powered by petroleum. AmorePacific marketing strategy aims to reduce transportation carbon footprint through the use of joint distribution and eco-driving campaigns (Amorepacific 2016d). The promotion element of the marketing strategy entails communication of company’s sustainability practices and educating the public to support programs for preserving the environment (Belz 2012). AmorePacific Laneige brand incorporates these considerations through commercials and messages for customers on the products (Kumar, and Christodoulopoulou 2014). The company also organizes and supports sensitization programs to lobby for public support for environmental sustainability such as safe waste disposal and conservation of natural resources.

The Laneige brand faces intense competition from other substitutes employing sustainability practices as a response to the mainstream environmental conservation pressure. AmorePacific’s competitors in the Singapore market include the French-based L’Oreal Corporation and Dione International Corporation. Dione International Company is based in Singapore and distributes aesthetic skincare products from Korean firms. It does not engage in production activities and hence does not have a comprehensive sustainability strategy. The company supplies a few brand products. One of the brands competing with the Laneige is the Dione brand. Dione products include EX-C after Cream, Microdermabrasion Cream, and U Modelling Mask (Dione International 2016). The company assumes sustainability attributes of the manufacturers by selecting products that promote environmental sustainability for the planet, people and profits. Dione’s sustainability practices involve the marketing activities. It seeks to reduce carbon footprint by the transportation vehicles by utilizing full capacity when moving products to customers. It also partners with other supply chain players who apply environmental sustainability practices.

L’Oreal is a major player in the Singapore’s market with several brands and a wide range of products. One of the brands is Lancôme that competes with Laneige brand (Chung 2015). Lancôme involves a range of products for skincare, makeups, and fragrance. Iconic products include Visionnaire, Absolute, and Teint Miracle, among others (L’Oreal 2016a). The Lancôme brand incorporates comprehensive sustainability practices under the company’s strategy. The company aims to make beauty sustainable by modifying the business model in research, operations, marketing, and communication with consumers. It seeks to share growth with suppliers, employees, and communities (L’Oreal. 2016b). Moreover, it has the goal to create more products with least negative impacts on the environment through innovation, production, and consumption stages. In innovation, the company has attained 80 percent sustainable sourcing of plant-based raw materials and 100 percent palm oil purchases certified to be sustainable (L’Oreal 2016c). Production sustainability includes 17.7 percent growth in output, 22 percent reduction in water consumption, and 23 percent reduction of transportable wastes. Consumption practices include stakeholder engagement and studies to guide sustainable usage (Burritt 2012). The company is committed to realizing greater sustainability achievement by 2020 according to the set strategy (L’Oreal. 2016b). Activities to guide this plan include in-depth research for impacts of products on the environment and society to strengthen sustainability practices.

Conclusion

AmorePacific Company is a leading firm in the Singapore’s cosmetics industry. It embraces sustainability practices based on the principles of safeguarding the planet, people, and profits. It has a comprehensive sustainability strategy for all products. The Laniage brand products and marketing activities apply concepts to reduce carbon, water, and ecological footprint. The approach involves setting goals and implementing activities to realize targets. Some achievements include reduction carbon emission, water consumption, and restoring rare plant species to protect the environment for the future generations. Although Laneige faces competition from Lancome and Dione substitutes, the sustainability practices give the company cutting edge. As a result, the company has attained large customer base in Singapore using the brand. Sustainability practices for the Laneige products are observed in the marketing strategies using the 4Ps. Product, pricing, place and promotional activities incorporate best practices to conserve the environment and encourage consumers support for safe waste disposal. The company can improve in a few areas to further reduce impacts on the environment. For instance, the company can carry out research to replace raw materials that face the threat of extinction. Additionally, the company can stock different brands in store outlets to benefit from economies of scale operations that promote sustainability.

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