Climate Change Generates Competitive Advantage for
European Poultry Processors.
Using Promotional Marketing
Author: Patrick Fijn Student number: S3836177 Email: H.Fijn@student.rug.nl Supervisor: P.J. Marques Morgado
Faculty of Economics and Business University of Groningen
Duisenberg Building, Nettelbosje 2, 9747 AE Groningen, The Netherlands P.O. Box 800, 9700 AV Groningen, The Netherlands
TABLE OF CONTENT
ABSTRACT ... 4
1. INTRODUCTION ... 5
2. THE POULTRY INDUSTRY ... 7
3. PROMOTIONAL MARKETING ... 9
3.1 Different Levels of Marketing ... 9
3.2 Use of Promotional Marketing ... 10
4. CLIMATE CHANGE ... 11
4.1 The Sources of Emissions ... 11
4.2 The Opinion of European Citizens ... 12
4.3 Consumer Behaviour and Climate Change ... 12
5. THEORETICAL FRAMEWORK ... 14
5.1. Porter’s Five Forces of Competitive Position ... 14
5.1.1. Threat of new entrants ... 14
5.1.2. Bargaining power of suppliers ... 14
5.1.3. Bargaining power of buyers ... 15
5.1.4. The threat of substitutes ... 15
5.1.5. Rivalry among existing competitors ... 16
5.2. The Six Markets Models ... 16
5.2.1. Customer markets ... 16
6. RESEARCH DESIGN ... 18
7. ANALYSIS & DISCUSSION ... 19
7.1 Tuning the Mix of Meat Production ... 19
7.2 Changing Buying Behaviour of European Citizens ... 20
7.3 Increased Revenues For Poultry Processors ... 21
7.4 Competitive Advantage For Poultry Processors ... 22
8. CONCEPTUAL MODEL ... 23
9. CONCLUSION, LIMITATIONS & FUTURE RESEARCH ... 24
9.1 Conclusions ... 24
9.2 Limitations ... 25
9.3 Future research ... 25
TABLE 1: Top 10 European Poultry Meat Producers. ... 8
TABLE 2: EU-28 and Iceland Greenhouse Gas Emissions 1990-2017. ... 11
TABLE 3: Carbon Footprint of Meat Products. ... 12
TABLE 4: Beliefs of European Citizens Regarding Climate Change. ... 13
FIGURE 1: Market Share Based on Value of Total Revenues. ... 7
FIGURE 2: Working Together to Influence the Market. ... 9
ABSTRACT
The meat and livestock industry is the biggest emitter of greenhouse gases of the European agricultural sector, which leads to negative publicity. Chicken meat has the lowest carbon footprint of meat products. This can generate competitive advantage for European poultry processors. Poultry processors can use promotional marketing to make people aware of the benefits that the production of chicken meat has for the climate compared to other types of meat. The low carbon footprint offers opportunities in the field of sustainability. Integrating Porter’s competitive forces with the ‘six markets model’ helps to understand who can affect and who are affected by the operations of poultry processors. Literature on this subject doesn’t make clear how the favourable carbon footprint of chicken meat matters for promotional marketing and can ensure that poultry processors generate competitive advantage. The research question is: How does climate change matter for promotional marketing to generate competitive advantage for European poultry processors? My
expectation is that if more people become aware of the favourable carbon footprint of chicken meat, more people will buy chicken meat. Climate change is one of the most important topics in today’s politics and the market value of the meat and livestock market shrank by 3.5% in 2018.
1. INTRODUCTION
The agricultural sector faces increasing pressure of the European Union (EU). Greenhouse gas emissions in the sector contribute to climate change. The meat and livestock industry is the biggest emitter of the European agricultural sector (RVO, 2016). The European meat and livestock market can be broadly divided into pig, cattle and chicken meat. Pig meat is the largest segment of the European meat and livestock market, accounting for 44.0% of the market’s total value in 2018. Cattle meat accounts for 36.0% of the market value. Chicken meat accounts for 20.0% of the total market value (Marketline, 2019). The research will focus on firms that process chicken meat. Processing is the term used by the poultry industry to describe the conversion of live poultry into poultry products that are ready for human consumption (FSIS, 2013).
The meat and livestock industry faces negative publicity because of the greenhouse gases that are emitted during the production process. The negative publicity faced by the meat and livestock industry as a whole, must be converted into positive publicity for poultry processors. This is possible if poultry processors succeed in making people aware of the benefits that the production of chicken meat has for the climate compared to other types of meat. Promotional marketing can help to create awareness among European citizens.
The carbon footprint refers in tonnes to how many greenhouse gases a human being produces (Emerald Insight, 2008). Out of the different types of meat, chicken meat has the lowest carbon footprint. The relative low carbon footprint of chicken meat offers opportunities for poultry processors in the field of sustainability. Poultry processors should focus on their social, environmental and financial performance.
It hasn’t yet been investigated whether climate change can help to increase the revenues of poultry processors. Literature on this subject doesn’t make clear how the favourable carbon footprint of chicken meat matters for promotional marketing activities and can ensure that poultry processors generate competitive advantage.
The missing piece in the research literature leads to the following research question: How does climate change matter for promotional marketing to generate competitive advantage for European poultry processors?
My expectation is that many consumers aren’t aware of the fact that, compared to other meat products, less greenhouse gasses are emitted during the production of chicken meat. My expectation is that if poultry processors will increase this awareness, people will more often consume chicken.
Climate change is one of the most important topics in today’s politics. Research of the European Environment Agency shows that the agricultural sector accounted for 10% of total EU greenhouse gas emissions in 2017. This makes the agricultural sector the second largest contributor. Meat and dairy have the largest carbon footprint of all food products (EEA, 2018). This leads to a lot of negative publicity. The market value of the European meat and livestock market shrank by 3.5% in 2018 (Marketline, 2019). A new approach is needed to increase the value again.
2. THE POULTRY INDUSTRY
The meat and livestock market can be defined as animals reared for consumption purposes. In 2018, the European meat and livestock market had total revenues of $121.7 billion. Pig, cattle and chicken meat are the most important meat products produced for European consumption. That’s why the European meat and livestock industry is often divided into these three
segments. Pig meat is the largest segment of the European meat and livestock market, accounting for 44.0% of the market’s total value in 2018. Cattle meat accounts for 36.0% of the market value. Chicken meat accounts for 20.0% of the total market value (Marketline, 2019). Figure 1 shows the market shares based on the total revenues of each segment. This amounts the production of 23.8 million tonnes of pig meat, 7.9 million tonnes of cattle meat and 14.6 million tonnes of chicken meat. For comparison, the fourth largest segment concerns sheep meat with a production of 0.72 million tonnes (Eurostat, 2019).
This research focuses on companies that process chicken meat. Chicken meat is produced by the poultry industry. Poultry refers to domestic birds that produce eggs and meat that can be consumed (Hilmi et al., 2011). Processing is the term used by the poultry industry to describe the conversion of live poultry into poultry products that are ready for human consumption (FSIS, 2013).
FIGURE 1:
The poultry value chain involves a number of steps. First, there are breeding and propagation companies. These companies focus on the production of eggs. The eggs go to hatcheries. The hatched chicks go to broiler farms. When the animals are big enough, they are slaughtered. After the meat has been cut, processed and packaged, the poultry company often sells it to wholesalers and retailers (Kip in Nederland, 2018).
The EU is one of the largest poultry meat producers in the world. Around 80% of the
European poultry market consists of chicken. The biggest European poultry processors focus on the slaughter, process and pack of their products. The hatchery and raising of chickens are usually outsourced to farmers. Many big European poultry processors increasingly operate in different European countries. These developments increase international competition
(Rabobank, 2018). Table 1 shows the 10 biggest European poultry meat producers.
TABLE 1:
3. PROMOTIONAL MARKETING
Marketing bridges the gap between production and consumption. It includes all activities undertaken to bring the buyer and seller together (Verhage & Visser, 2018).
3.1 Different Levels of Marketing
Macro-marketing focuses on achieving the economic goals of the society as a whole. The counterpart of macro-marketing is micromarketing. Micromarketing focuses on individual companies (Verhage & Visser, 2018). According to Mohan Sawhney (2004), there’s another level in between macro- and micromarketing that focuses on the joint marketing activities of companies operating in the same market. This is called meta-marketing (Shah, 2005).
Poultry processors can use meta-marketing in order to increase the revenues of the poultry industry. The meat and livestock industry faces a lot of negative publicity because of the greenhouse gases that are emitted during the production process. Climate change and the contribution that meat production makes to it, offers opportunities for the poultry industry. The negative publicity faced by the meat and livestock industry as a whole, must be converted into positive publicity for the poultry industry. The marketing activities of poultry processors play a key role in this process. Poultry processors are the companies in the poultry value chain that are the closest to the customer.
FIGURE 2:
3.2 Use of Promotional Marketing
The marketing mix is a combination of different marketing decision variables used to market goods and services. Companies can use the marketing mix to influence buyer responses (Singh, 2012). The elements of the marketing mix are product, price, place and promotion. The first three elements mainly focus on the mutual competition between companies that operate within the European poultry industry. Public promotion almost doesn’t occur in the poultry industry.
Promotion refers to motivational methods and mainly consists of messages and related media used to communicate with the target audience (Familmaleki et al., 2015). Promotion used to be a way to encourage people to buy at certain companies or certain products. Nowadays it becomes more common to start promotional campaigns to tackle problems. Promotion can be used to create an image among citizens. It can focus on the benefits of a particular product, but also on the disadvantages that certain behaviour entails (Maulani, 2017).
Social marketing applies commercial marketing concepts and techniques to bring about social change. Social marketing is mainly used by governments to encourage people to behave in a certain way and tries to let people make choices that contribute to a larger goal. It’s a method to achieve sustainable behavioural change (RIVM, 2019). Companies can also promote the social benefits of their products. Awareness, engagement, behaviour, social norm and well-being are examples of factors that affect the effectiveness of social marketing (Maulani, 2017).
4. CLIMATE CHANGE
Sustainability can be defined as ‘‘meeting the needs of the present without compromising the ability of future generations to meet their own needs’’ (United Nations, 1987). Sustainable buying involves procuring products that possess social, economic and environmentally
friendly attributes (Joshi & Rahman, 2019). Climate change is increasingly becoming a driver for sustainability initiatives. Human activities change the climate of the globe through the enhanced greenhouse effect. CO2 has the largest effect on climate change of the greenhouse gasses that are directly affected by human activities (Watson et al., 1990).
4.1 The Sources of Emissions
The EU accounted for 9% of total global greenhouse gas emissions in 2017 (PBL, 2018). The energy-industry accounted for 78% of EU emissions in 2017. The second largest contributor is the agricultural sector, which accounted for 10% of total emissions. Table 2 provides further insight into the sources of EU emissions (EEA, 2019). About 52% of the total greenhouse gas emissions in the agricultural sector are coming from the meat and livestock industry (RVO, 2016). The carbon footprint refers in tonnes to how many greenhouse gases a human being produces (Emerald Insight, 2008). Table 3 shows that chicken meat has the lowest carbon footprint of the three types of meat (RVO, 2018). There are variations between emissions among countries due to differences in animal production systems, feed types and nutrients use of efficiencies (Lesschen et al., 2011). Western European countries have the lowest carbon footprint in Europe (Rabobank, 2018). Despite the fact that the carbon footprint of chicken meat is not the same in every European country, it’s still lower than the carbon footprint of pig and cattle meat.
TABLE 2:
Sustainability goals show that companies should focus on more than making money. The production of chicken meat has less impact on the environment than the production of pig and cattle meat. This environmentally friendly attribute of the product provides opportunities and creates incentives for economic advancement (Emas, 2015). The carbon footprint of chicken meat decreased from 3.5 to 1.9 between 1990 and 2017 (RVO, 2018). This shows that the sector is innovating to operate in a sustainable way, whereby ecological and social aspects are harmed as little as possible.
4.2 The Opinion of European Citizens
Poortinga et al. (2011) investigated the beliefs of European Citizens regarding the existence, causes and impacts of climate change. More than 90% of the European citizens believe that the world’s climate is changing. Respondents were asked if they believe that climate change is caused by human activities and if climate change will have bad consequences. The results of this survey are shown in table 4 (ESS, 2018). According to a survey of the European Commission (2017), nearly 75% of EU citizens sees climate change as a very serious problem. Almost 80% of EU citizens think that fighting climate change will bring economic benefits (European Commission, 2017).
4.3 Consumer Behaviour and Climate Change
Empirical research of Wells et al. (2012) shows that there are demographic factors that affect the extent to which consumer behaviour is influenced by environmental developments. Their analysis shows that people aged 65+ show a more environmental responsive buying
behaviour than younger people. The buying behaviour of people aged between 16-34 is least affected by environmental concerns (Wells et al., 2012). This conclusion is striking compared to research of Andor et al. (2017). Their study suggests that elderly people are more sceptical about the existence of climate change and are less likely to support climate-friendly policy measures (Andor et al., 2017).
TABLE 3:
There’s frequently a gap between consumers reported willingness to consume more sustainable and their actual behaviour (Vermeir and Verbeke, 2006). Consumer response partly depends on the ability of consumers to understand information (Wells et al., 2012). Individuals are often not able to make connections between issues like climate change and their lifestyles (Anable et al., 2006). Kaiser and Schimoda (1999) stated that ‘‘If a person is aware of the consequences of certain behaviour, the ascription of personal responsibility becomes crucial’’. According to Schwartz’s Norm Activation Theory (1977), personal behaviour is the result of awareness of consequences and feelings of responsibility for carrying out the behaviour. Knowledge about climate change is a strong predictor of the intention to engage in pro-environmental behaviour (Wells et al., 2012).
TABLE 4:
5. THEORETICAL FRAMEWORK
Two different theoretical frameworks will be used to look at poultry processors from different angles. The first framework is Porter’s five forces of competitive position analysis. The second one is the six markets model.
5.1. Porter’s Five Forces of Competitive Position
Michael Porter defined five forces that shape the competition in an industry. These five forces are the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, the threat of substitutes and rivalry among existing competitors. Promotional marketing focuses on reaching the customer. The bargaining power of buyers will therefore be examined most extensively. Also the threat of substitutes is highly relevant for this analysis because it provides insight into the competition between meat producers.
5.1.1. Threat of new entrants
The threat of new entrants is high in the European poultry industry. The biggest threat is coming from global trade deals (Marketline, 2019). In 2018, the European Commission signed a trade agreement with the Mercosur group of countries, which allows the entry into the EU market of 180,000 tonnes of poultry meat (European Commission, 2019). The deal corresponds to 1.2% of current consumption. The Association of Poultry Processors and Poultry Trade (AVEC) states that the extra 180,000 tonnes of poultry meat means a
significant loss of jobs for the European poultry industry. European firms are afraid that they will be put out of business by low-priced and tariff-free imports which don’t have to meet the same standards as European farmers (Davies, 2019).
5.1.2. Bargaining power of suppliers
5.1.3. Bargaining power of buyers
The bargaining power of buyers is high in the European poultry industry. The direct buyers of poultry processors are retailers and wholesalers. These are strong businesses with a lot of power. If the retailers and wholesalers think that they can get better prices or quality
elsewhere, they can move to new suppliers. This gives them the power to force down prices and ask for extra services (Marketline, 2019).
Competition between retailers often ensures that poultry processors are only allowed to supply their products to one big player on the market. This retailer has a crucial role in the process. Continuous competition between poultry processors makes it very important to meet the requirements of this customer (Boeve et al., 2014). Processors are constantly competing to create better products and reduce costs to meet the wishes of the retailers. The wishes of the retailers are influenced by the public opinion (Marketline, 2019). The consumers determine the sales of retailers and indirectly the production of poultry processors.
Despite the power that the major retailers have, there are also factors that favour the
processors. Retailers and suppliers often enter into long-term contracts. This makes the cost of switching significant. A rival processor has to offer a deal that’s significantly better to make it valuable to switch between processors (Marketline, 2019).
5.1.4. The threat of substitutes
The threat of substitutes is average in the European poultry industry. Substitutes for poultry meat are other types of meat and meat substitutes. Research of the RIVM shows that the sales of different meat products is lightly affected by price. When the price of chicken products increases, the sales of pork and cattle meat lightly increases (RIVM, 2006). The BSE-crisis is an example of the shift in demand between meat products. BSE is also known as the ‘Mad cow disease’ (BBC, 2018). During the peak of this crisis, there was a clear decrease in the consumption of cattle meat and a clear increase in the consumption of chicken meat and fish. Cattle meat, pig meat, chicken meat and also fish can be seen as substitution goods of each other. However, a study conducted in 2003 that focuses on the Scandinavian countries shows that chicken meat is the least sensitive for changes in price (RIVM, 2006).
made of plant proteins like soy, wheat and tofu are examples of meat substitutes for
vegetarians. However, the threat of this possible substitute seems to remain stable and doesn’t really increase (Marketline, 2019).
5.1.5. Rivalry among existing competitors
The rivalry among existing competitors is high in the European poultry industry. The EU is among the top four chicken meat producers in the world. The United States, Brazil and China complete the top four (Augere-Granier, 2019). Around 77% of the EU’s broiler meat
production is produced in the UK, Poland, Germany, France, Spain, Italy and The Netherlands (Van Horne, 2018). European trade regulations give companies access to international markets. The threat of acquisition for smaller companies, that focus on the national market, is high (Marketline, 2019). There are many examples of large poultry processors that acquired smaller potential competitors.
5.2. The Six Markets Models
Fast changing global markets changed the idea of what effective marketing is. Christopher, Payne and Ballantyne (1991) developed the six markets model to define the relationships with traditional stakeholders (Parmar et al., 2010). In this research, the focus is on customer
markets. Customer markets are the central part of the six markets model and focus on the relationship between a firm and its customers (Bhattacharya & Korschun, 2008).
5.2.1. Customer markets
Payne distinguishes between transactional marketing and relationship marketing. Transactional marketing focuses on the short-term and on acquiring new customers. Relationship marketing is about building long-term relationships with customers (Payne, 1993). Almost all major poultry processors use relationship marketing as their main
marketing method. They focus on the relationship with, mainly, retailers (Boeve et al., 2014). High customer contact and high customer service are important factors to strengthen the relationship. The quality of the product is not only a concern of the poultry processor. The retailers also care about the quality because consumers look at them first. A certain
Overall, there is a satisfying relationship between the current customers and poultry
processors. However, poultry processors should also try to acquire new customers. Not only direct customers must be approached, but also the indirect customers. The indirect customers of poultry processors are the customers of the supermarket. More attention needs to be paid to reach the consumers. The prominence of transactional marketing is to blow up the
effectiveness and capacity of single sales (UKEssays, 2018). Promotion can play a major role in this.
FIGURE 3:
6. RESEARCH DESIGN
The research is conducted from an interpretivist philosophy. ‘‘Interpretive researchers assume that access to reality is only through social constructions such as language, consciousness, shared meanings, and instruments’’ (Myers, 2008). Researchers investigated how European citizens are influenced by climate change and their awareness about climate change. Meaning will be given to the effects of these results and how poultry processors can respond to this. An empathic attitude is necessary to interpret results and to understand the social actors.
An inductive approach forms the basis for this research. ‘‘Inductive research involves the search for pattern from observation and the development of explanations for those patterns through series of hypotheses’’ (Bernard, 2011:7). Previous research has been done to climate change and the contributions of various sectors to it. The opportunities that these results create for companies active in sectors that highly contribute to climate change, create new research questions. I will investigate whether it’s possible to make connections between the results of various studies. Explanations coming from various studies lead to new hypotheses. Results of surveys taken by other researchers will be used to obtain information about the extent to which climate change causes concerns among European citizens. Surveys are useful in describing the characteristics of a large population (DeFranzo, 2020). Researchers
investigated whether there’s a link between the concerns people have and their buying behaviour. I will try to find causal relations between the results of surveys and investigations of different researchers, to come up with my own conclusions.
Qualitative research methods will be applied during the research. Qualitative researchers try to understand the motivation and feeling behind responses (Bhat, 2020). Interpreting results coming from different studies provide new insights. Different documents and reports are analysed to identify the market, relevant developments in the market and underlying meanings of these developments. Linking these results to existing theories will show what opportunities there are for poultry processors.
7. ANALYSIS & DISCUSSION
Connections will be laid between the information in this report. These connections lead to different hypotheses.
7.1 Tuning the Mix of Meat Production
Human activities inadvertently change the climate of the globe through the enhanced greenhouse effect (Watson et all., 1990). The agricultural sector is the second largest greenhouse gas emitter in the EU and contributes for 10% of total emissions (EEA, 2019). About 52% of the total greenhouse gas emissions in the agricultural sector are coming from the meat and livestock industry (RVO, 2016).
Pig meat is the largest segment of the European meat and livestock market, accounting for 44.0% of the market’s total value in 2018. Cattle meat accounts for 36.0% of the market value. Chicken meat accounts for 20.0% of the market value (Marketline, 2019). This
amounts a production of 23.8 million tonnes of pig meat, 7.8 million tonnes of cattle meat and 14.6 million tonnes of chicken meat (Eurostat, 2019). Chicken meat has a carbon footprint of 1.9, while pig meat has a carbon footprint of 4.2 and cattle meat has a carbon footprint of 7.1 (RVO, 2018). This data shows that 63% more pig meat than chicken meat is produced, while the carbon footprint of pig meat is 121% higher than the carbon footprint of chicken meat.
Therefore it can be concluded that the greenhouse gas emissions of the European meat and livestock industry will decrease when the industry produces more chicken meat at the expense of pig and cattle meat. Especially pig meat is produced a lot. Less emission means less
contribution to climate change, which can be seen as a positive effect. This leads to the first hypothesis:
7.2 Changing Buying Behaviour of European Citizens
A large majority of European citizens sees climate change as a serious problem and the concerns are increasing. People are concerned about the consequences that climate change will have for the world (EEA, 2019). Different studies agree that concerns about climate change impact the buying behaviour of consumers. However, it’s not completely clear who’s buying behaviour is influenced the most. Younger people seem to be most concerned about climate change (Andor et al., 2017), while elderly people seem to be most willing to adjust their purchasing behaviour (Wells et al, 2012).
There’s frequently a gap between consumers reported willingness to consume more
sustainable, and their actual behaviour (Vermeir and Verbeke, 2006). Bristow (2007) suggests that increasing public awareness about climate change creates significant and growing
opportunities for companies. She states that a large part of the consumers who are strongly concerned about climate change, support the consumption of products that have less impact on climate change. The problem is that individuals are often not able to make connections between issues like climate change and their own lifestyles (Anable et al., 2006). The willingness of consumers to change their behaviour is not the problem. People need to become aware of what they can do to stop climate change.
Promotion is a useful tool to create public awareness. Promotion to create public awareness and change is mainly used by governments and non-profit organizations. However,
companies can also promote the social and environmental benefits of their products.
Motivating consumers to adopt more sustainable buying behaviours is an important potential marketing opportunity. Helping consumers to overcome barriers can help companies to unlock new growth and achieve ambitious sustainability goals (Bristow, 2007).
Therefore it can be concluded that promotional marketing helps to create public awareness, which will reduce the gap between consumers willingness to consume more sustainable and their actual behaviour. This leads to the second hypothesis:
7.3 Increased Revenues For Poultry Processors
The produced amount of meat is determined by market demand. The meat and livestock industry produces a high amount of pig meat because the European consumer asks for it. This analysis shows that European consumers are willing to change their buying behaviour if this will help to stop climate change. This means that European poultry processors can increase their revenues if they are able to prove that their products have an advantage in the field of climate change.
The carbon footprint of chicken products offers a chance here. The carbon footprint shows that the high demand for pig meat doesn’t match with consumers’ willingness to consume more sustainable. The carbon footprint shows that the production of chicken meat has the least impact on climate change (RVO, 2018). Despite the fact that the carbon footprint of chicken meat is not the same in every country, it’s still lower than the carbon footprint of pig and cattle meat. This gives poultry processors a common advantage over the processors of pig and cattle meat.
People who are concerned about climate change and want to eat meat, contribute the least to climate change if they chose for chicken. European poultry processors should work together and promote the common advantages of their products. The promotional marketing activities should focus on the carbon footprint. The production of pig and especially cattle meat is more harmful for the climate than the production of chicken meat.
7.4 Competitive Advantage For Poultry Processors
The major contribution that the meat and livestock industry makes to climate change is the main reason for the negative publicity that the industry faces. The negative publicity is an important reason for the 3.5% decrease in market value of the European meat and livestock industry in 2018 (Marketline, 2019). The production of chicken meat is the least harmful for the climate, so the environmental impact of the meat and livestock industry will decrease if the revenues of poultry processors increase at the expense of pig and cattle meat producers. The carbon footprint of chicken meat decreased from 3.5 to 1.9 between 1990 and 2017 (RVO, 2018). This decrease of 46% shows that the poultry industry doesn’t just focus on the financial aspect of business. The sector is innovating to operate in a sustainable way, whereby ecological and social aspects are harmed as little as possible. This attitude of the sector
contributes to a possible competitive advantage for poultry processors.
Competitive advantages are achieved through the transformation of problems into relevant demands. Issues like climate change can be transformed into direct opportunities for those who can provide the answers (Kersten, 2015). This report shows that poultry processors seem to be more able to provide these answers than competitors in the meat and livestock industry. It will especially be important for poultry processors to continue to innovate, so they won’t be overtaken by competitors. This will allow them to maintain their competitive advantage. Therefore it can be concluded that the increased importance of economic growth with less environmental impact, will lead to a competitive advantage for poultry processors. This leads to the fourth hypothesis:
8. CONCEPTUAL MODEL
Hypothesis 1: The European meat and livestock industry reduces their impact on climate change by tuning the mix of meat production.
Hypothesis 2: Promotional marketing focussing on climate change will increase the sustainable buying behaviour of European citizens.
9. CONCLUSION, LIMITATIONS & FUTURE RESEARCH
The existing literature doesn’t tell how the favourable carbon footprint of chicken meat can ensure that poultry processors generate competitive advantage. I will answer the question below to provide an answer to this:
How does climate change matter for promotional marketing to generate competitive advantage for European poultry processors?
9.1 Conclusions
The agricultural sector is the second largest emitter in the EU and contributes for 10% of total greenhouse gas emissions. About 52% of these emissions are coming from the European meat and livestock industry. This means that the European meat and livestock industry contributes to climate change. CO2 has the largest effect on climate change of the greenhouse gasses that are directly affected by human activities. Pig meat is the most produced type of meat. The results show that 63% more pig meat than chicken meat is produced, while the carbon footprint of pig meat is 121% higher than the carbon footprint of chicken meat. The high demand for pig meat doesn’t match with consumers’ willingness to consume sustainable. It’s important to reduce the impact on climate change. A large majority of European citizens are concerned about the consequences of climate change. The concerns about climate change impact the buying behaviour of consumers. Consumers show willingness to change their behaviour if they can help to stop climate change. However, there’s a gap between consumers reported willingness and their actual behaviour. Consumers aren’t aware enough of what they can do to stop climate change. The results of hypothesis 2 are important and state that
promotional marketing can be used to create the required awareness. Promotional marketing will reduce the gap between consumers’ willingness to consume more sustainable and their actual behaviour. Poultry processors should help consumers to overcome barriers. This will unlock new growth opportunities.
promote the favourable carbon footprint of their products to take advantage of it and to increase their revenues. Issues like climate change can be transformed into direct
opportunities if companies are able to provide the answers to these issues. The favourable carbon footprint gives poultry processors the opportunity to provide these answers and generate competitive advantage.
Analysis of Porter’s five forces and the six markets model shows that the current marketing strategy of poultry processors mainly focuses on the relationship with their direct customers. Almost all attention goes to the long-term relationship with wholesalers and retailers.
However, the demand of retailers is determined by the demand of consumers. Poultry processors should use promotional marketing to reach the consumer and increase their revenues.
9.2 Limitations
The carbon footprint forms an important factor in this research. The carbon footprint of chicken meat differs per region. It’s not equally low in every country. Therefore, the competitive advantage of poultry processors won’t be the same in every country. Western European countries are particularly developed in reducing greenhouse gas emissions.
The extent to which consumers buying behaviour is influenced by climate change is another important factor in this research. The extent to which peoples buying behaviour is influenced by climate change is based on people’s expectations. It may be the case that people say that they take climate change into account in their buying behaviour, but that they actually don’t. Finally, little is known about the extent to which people are already aware of the favourable carbon footprint of chicken meat. This makes it difficult to say to what extent the revenues of poultry processors are already affected by opportunities originating from climate change.
9.3 Future research
When determining a strategy, it’s important to determine on which target group the promotion campaign should focus and how this target group can be reached. It’s not completely clear who’s buying behaviour is influenced the most by climate change. Younger people seem to be most concerned about climate change, while elderly people seem to be most willing to adjust their purchasing behaviour. This has to be investigated.
Finally, it has to be investigated to what extent peoples buying behaviour is actually affected by climate change. Survey results state that people are willing to change their buying
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