Green Marketing Project
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INTRODUCTION The promotion of environmentally safe/ beneficial products, green marketing began in Europe in the early 1980’s when specific products were identified as being harmful to the earth’s atmosphere. As the result new “green” products were introduced that were less damaging to the environment. The concept caught on in the United States and has been gaining steadily ever since. Green marketing is also known as environmental marketing or sustainable marketing. Divergent aspect of green marketing includes ecologically safer products, recyclable and biodegradable packaging, energy efficient operations and better pollution controls. Advances produced from green marketing include packaging made from recycle paper, phosphate-free detergents, refillable containers for cleaning products and bottle using less plastic. As today’s consumer become more and more conscious of natural products, businesses are beginning to modify their own thoughts and behavior in an attempt to address the concerns of consumers. Green marketing is becoming more important to businesses because of consumers’ genuine concerns about our limited resources on the earth. By implementing green marketing measures in order to save the earth’s resources in productions, packaging and operations, businesses are showing consumers that they too share the same concern about environment, boosting their credibility. Government has also taken certain initiatives by making regulations relating to green marketing in order to protect the environment.
WHAT IS GREEN MARKETING? Many people believe that green marketing refers solely to the promotion or advertising of products with environmental characteristics. Generally terms like Phosphate Free, Recyclable, Refillable, Ozone Friendly, and Environmentally Friendly are some of the things consumers most often associate with green marketing. In general green marketing is a much broader concept, one that can be applied to consumer goods, industrial goods and even services. For example, around the world there are resorts that are beginning to promote themselves as "ecotourism" facilities, i.e., facilities that specialize in experiencing nature or operating in a fashion that minimizes their environmental impact. Green marketing is the marketing of products that are presumed to be environmentally safe. Thus green marketing incorporates a broad range of activities including product modification, changes to the production process, packaging changes, as well as modifying advertising. It is the process of selling products and services based on their environmental benefits. Such a product or service may be environmentally friendly in itself or produced and/or packaged in an environmentally friendly way. Green marketing involves developing and promoting products and services that satisfy customers want and need for Quality, Performance, Affordable Pricing and Convenience without having a detrimental impact on the environment. The Obvious assumption of green marketing is that potential consumers will view a product
or service's "greenness" as a benefit and base their buying decision accordingly.
DEFINITION According to Pride and Ferrell “Green Marketing alternatively known as environmental marketing refers to an organization efforts at designing , promoting , pricing and distributing products that will not harm the environment” According to Polonsky ,Green marketing is defined as "Green or Environmental Marketing consists of all activities designed to generate and facilitate any exchanges intended to satisfy human needs or wants, such that the satisfaction of these needs and wants occurs, with minimal detrimental impact on the natural environment.” This definition incorporates much of the traditional components of the marketing definition, that is "All activities designed to generate and facilitate any exchanges intended to satisfy human needs or wants" Therefore it ensures that the interests of the organization and all its consumers are protected, as voluntary exchange will not take place unless both the buyer and seller mutually benefit. The above definition also includes the protection of the natural environment, by attempting to minimize the detrimental impact this exchange has on
the environment. This second point is important, for human consumption by its very nature is destructive to the natural environment. So green marketing should look at minimizing environmental harm, not necessarily eliminating it.
HISTORY The term Green Marketing came into prominence in the late 1980s and early 1990s.The American Marketing Association (AMA) held the first workshop on "Ecological Marketing" in 1975.The proceedings of this workshop resulted in one of the first books on green marketing entitled "Ecological Marketing The first wave of Green Marketing occurred in the 1980s. Corporate Social Responsibility (CSR) Reports started with the ice cream seller Ben & Jerry's where the financial report was supplemented by a greater view on the company's environmental impact. In 1987 a document prepared by the World Commission on Environment and Development defined sustainable development as meeting "the needs of the present without compromising the ability of future generations to meet their own need", this became known as the Brundtland Report and was another step towards widespread thinking on sustainability in everyday activity. Two tangible milestones for wave of green marketing came in the form of published books, both of which were called Green Marketing. They were by Ken Peattie (1992) in the United Kingdom
and by Jacquelyn Ottman (1993) in the United States of America. In the years after 2000 a second wave of Green marketing emerged. By now CSR and the Triple Bottom Line (TBL) were widespread. Such publications as a 2005 United Nations Report, then in 2006 a book by Al Gore and the UK Stern Report brought scientific-environmental arguments to a wide public in an easy to understand way.
IMPORTANCE OF GREEN MARKETING Since early 1990’s,a major concern on ecological impact of industrial house on environment has been surfaced on marketplace. Not only the relations between human, organization and natural environment has been redefined, but the implication thereof are being interpreted, because of these, new perception are being formed or re-evaluated on issues like environmentally product, recycle ability , waste reduction, the cost associated with pollution and price value relationship of environmentalism. Pressure from various stakeholders, govt. environmentalists, NGO’s consumer is placed on businesses, which in turn keep them under constant and relentless watch in their daily operations. A direct result can be seen in developing as well as in developed countries where government become more strict in imposing regulations to protect environment at the same time, the consumers of these countries are being more and more out spoken regarding their needs for
environmentally friendly products, even though question remain on their willingness to pay higher premium for these products. So in this era where consumer determine the fate of a company, green marketing imparts a proactive strategies to these companies to cater the market by imparting natural friendly product/ services which otherwise reduce or minimize detrimental impact on environment. A green marketing approach in productive area promotes the integration of environmental issues on all corporate activities; from strategy formulation, planning re-engineering in production process and dealing with consumers. So to remain competitive within the challenge thrown by environment protectionists, the companies will have to find out the answer through their marketing strategies, product or services redesign, customer handling.
in this endeavour the companies go for new technologies for handling waste, sewage and air pollution; it can go for product standardization to ensure environmentally safe product; by providing truly natural product. In this regard companies should be concerned with what happens to a product during and after its useful life. Companies may manifest these concerns through experimentation with ways to reassess the product life stages. Moreover, man has limited resources on the earth, with which she/he must attempt to provide for the worlds' unlimited wants. There is extensive debate as to whether the earth is a resource at man's disposal.. In
market societies where there is "freedom of choice", it has generally been accepted that individuals and organizations have the right to attempt to have their wants satisfied. As firms face limited natural resources, they must develop new or alternative ways of satisfying these unlimited wants. Ultimately green marketing looks at how marketing activities utilize these limited resources, while satisfying consumers wants, both of individuals and industry, as well as achieving the selling organization's objectives.
ADOPTION OF GREEN MARKETING There are basically five reasons for which a marketer should go for the adoption of green marketing. They are * * * * *
Opportunities or competitive advantage Corporate social responsibilities (CSR) Government pressure Competitive pressure Cost or profit issues
OPPORTUNITIES All types of consumers, both individual and industrial are becoming more concerned and aware about the natural environment. In a 1992 study of 16 countries, more than 50% of consumers in each country, other than Singapore, indicated they were concerned about the environment. A 1994 study in Australia found that 84.6% of the sample believed all individuals had a responsibility
to care for the environment. A further 80% of this sample indicated that they had modified their behavior, including their purchasing behavior, due to environmental reasons. As demands change, many firms see these changes as an opportunity to be exploited. It can be assumed that firms marketing goods with environmental characteristics will have a competitive advantage over firms marketing non-environmentally responsible alternatives. There are numerous examples of firms who have strived to become more environmentally responsible, in an attempt to better satisfy their consumer need. McDonald's replaced its clam shell packaging with waxed paper because of increased consumer concern relating to polystyrene production and Ozone depletion. Xerox introduced a "high quality" recycled photocopier paper in an attempt to satisfy the demands of firms for less environmentally harmful products. This is not to imply that all firms who have undertaken environmental marketing activities actually improve their behavior. In some cases firms have misled consumers in an attempt to gain market share. In other cases firms have jumped on the green bandwagon without considering the accuracy of their behavior, their claims, or the effectiveness of their products. This lack of consideration of the true "greenness" of activities may result in firms making false or misleading green marketing claims. In India, the green building movement, spearheaded by the Confederation of Indian industry (CII) - Godrej Green business Center, has gained tremendous impetus over the last few years. From 20,000 sq ft in 2003, India's green building footprint is now over 25 million sq ft.
CORPORATE SOCIAL RESPONSIBILITY Many firms are beginning to realize that they are members of the wider community and therefore must behave in an environmentally responsible fashion. This translates into firms that believe they must achieve environmental objectives as well as profit related objectives. This results in environmental issues being integrated into the firm's corporate culture. Firms in this situation can take two perspectives; (1) they can use the fact that they are environmentally responsible as a marketing tool; or (2) they can become responsible without promoting this fact. There are examples of firms adopting both strategies. Organizations like the Body Shop heavily promote the fact that they are environmentally responsible. While this behavior is a competitive advantage, the firm was established specifically to offer consumers environmentally responsible alternatives to conventional cosmetic products. This philosophy is directly tied to the overall corporate culture, rather than simply being a competitive tool. An example of a firm that does not promote its environmental initiatives is Coca-Cola. They have invested large sums of money in various recycling activities, as well as having modified their packaging to minimize its environmental impact. While being concerned about the environment, Coke has not used this concern as a marketing tool. Thus many consumers may not realize that Coke is a very environmentally committed organization. Another firm who is very environmentally responsible but does not promote this fact, at least outside the organization, is Walt Disney World (WDW). WDW has an extensive waste management program and infrastructure
in place, yet these facilities are not highlighted in their general tourist promotional activities.
GOVERNMENTAL PRESSURE As with all marketing related activities, governments want to "protect" consumers and society; this protection has significant green marketing implications. Governmental regulations relating to environmental marketing are designed to protect consumers in several ways, 1) reduce production of harmful goods or by-products;
2) modify consumer and industry's use and/or consumption of harmful goods; Or 3) ensure that all types of consumers have the ability to evaluate the environmental composition of goods. Governments establish regulations designed to control the amount of hazardous wastes produced by firms. Many by-products’ production are controlled through the issuing of various environmental licenses, thus modifying organizational behavior. In some cases governments try to "induce" final consumers to become more responsible. For example, some governments have introduced voluntary curb-side recycling programs, making it easier for consumers to act responsibly. In other cases governments tax individuals who act in an irresponsible fashion. For example in Australia there is a higher gas tax associated with leaded petrol. The Indian government too has developed a framework of legislations to reduce the production of harmful goods and by products. These reduce the industry's production and consumers'
consumption of harmful goods, including those detrimental to the environment; for example, the ban of plastic bags in Mumbai, prohibition of smoking in public areas, etc.
COMPETITIVE PRESSURE Another major force in the environmental marketing area has been firms' desire to maintain their competitive position. In many cases firms observe competitors promoting their environmental behaviors and attempt to emulate this behavior. In some instances this competitive pressure has caused an entire industry to modify and thus reduce its detrimental environmental behavior. For example, it could be argued that Xerox's "Revive 100% Recycled paper" was introduced a few years ago in an attempt to address the introduction of recycled photocopier paper by other manufacturers.
COST OR PROFIT ISSUES Firms may also use green marketing in an attempt to address cost or profit related issues. Disposing of environmentally harmful by-products, such as polychlorinated biphenyl (PCB) contaminated oil are becoming increasingly costly and in some cases difficult. Therefore firms that can reduce harmful wastes may incur substantial cost savings. When attempting to minimize waste, firms are often forced to re-examine their production processes. In these cases they often develop more effective production processes that not only reduce waste, but reduce the need for some raw materials. This serves as a double cost savings, since both waste and raw material are reduced. In other cases firms attempt to find end-of-pipe solutions, instead of minimizing waste. In these situations firms try to find
markets or uses for their waste materials, where one firm's waste becomes another firm's input of production. One Australian example of this is a firm who produces acidic waste water as a by-product of production and sells it to a firm involved in neutralizing base materials. The last way in which cost or profit issues may affect firms' environmental marketing activities is that new industries may be developed. This can occur in two ways: 1) a firm develops a technology for reducing waste and sells it to other firms; or 2) a waste recycling or removal industry develops. For example, firms that clean the oil in large industrial condensers increase the life of those condensers, removing the need for replacing the oil, as well as the need to dispose of the waste oil. This reduces operating costs for those owning the condensers and generates revenue for those firms cleaning the oil.
GREEN CODE Generalise with care. Consumer behaviour will not necessarily be consistent across different product types, and particular market segment may respond to certain issues on green agenda but not others.
Remember the validity of piece of market research is not related to degree to which it support your preferred option.
Explore the context from which the market research data comes. Be clear on the nature of sample used , the question asked the way in which the responses were recorded and time and place from where the responses come.
Ensure that where the market research is crossing international boundaries, that the terminology and interpretations remain consistent.
Neurality is important. Ensure that when you pose questions to consumers that they can made any responses without being made guilty or uncomfortable and ensure that your own preconceptions about green agenda are not encoded with in the questions.
GREEN MARKETING STRATEGIES AND TACTICS 4P’s OF GREEN MARKETING MIX Every company has its own favorite marketing mix. The 4 P's of green marketing are that of a conventional marketing but the challenge before marketers is to use 4 P's in an innovative manner.The four P’s of green marketing mix of which a marketer should take care of are:
Product Price Promotion Place
PRODUCT The products have to be developed depending on the needs of the customers who prefer environment friendly products. Products can be made from recycled materials or from used goods. Efficient products not only save
water, energy and money, but also reduce harmful effects on the environment. Green chemistry forms the growing focus of product development. The marketer's role in product management includes providing product designers with market-driven trends and customer requests for green product attributes such as energy saving, organic, green chemicals, local sourcing, etc., For example, Nike is the first among the shoe companies to market itself as green. It is marketing its Air Jordan shoes as environment-friendly, as it has significantly reduced the usage of harmful glue adhesives. It has designed this variety of shoes to emphasize that it has reduced wastage and used environment-friendly materials
PRICE Price is a critical and important factor of green marketing mix. Most consumers will only be prepared to pay additional value if there is a perception of extra product value. This value may be improved performance, function, design, visual appeal, or taste. Green marketing should take all these facts into consideration while charging a premium price. Green pricing takes into consideration the people, planet and profit in a way that takes care of the health of employees and communities and ensures efficient productivity. Value can be added to it by changing its appearance, functionality and through customization, etc. Wal Mart unveiled its first recyclable cloth shopping bag. IKEA started charging consumers when they opted for plastic bags and encouraged people to shop using its "Big Blue Bag".
Green promotion involves configuring the tools of promotion, such as advertising, marketing materials, signage, white papers, web sites, videos and presentations by keeping people, planet and profits in mind. British petroleum (BP) displays gas station which its sunflower motif and boasts of putting money into solar power. Indian Tobacco Company has introduced environmental-friendly papers and boards, which are free of elemental chlorine. There are three types of green advertising: Ads that address a relationship between a product or service and the biophysical environment • Those that promote a green lifestyle by highlighting a product or service • Ads that present a corporate image of environmental responsibility •
PLACE Green place is about managing logistics to cut down on transportation emissions, thereby in effect aiming at reducing the carbon footprint. For example, instead of marketing an imported mango juice in India it can be licensed for local production. This avoids shipping of the product from far away, thus reducing shipping cost and more importantly, the consequent carbon emission by the ships and other modes of transport. The choice of where and when to make a product available will have significant impact on the customers. Very few customers will go out of their way to buy green products.
4’s OF GREEN MARKETING
Safety of product. Satisfaction of customer.
Social acceptability of a product. Sustainability of product.
STRATEGIES The marketing strategies for green marketing include: Marketing Audit (including internal and external situation analysis) Develop a marketing plan outlining strategies with regard to 4 P's Implement marketing strategies Plan results evaluation
GREEN MARKETING BASIS For green marketing to be effective, following points should be taken into account; Balance environmental issues with primary customer needs. If customers aren’t going to use environmental issues to gauge products and companies, and if environmental initiatives are not going to drive a purchasing decision or brand loyalty, green marketing isn’t going to be an effective use of the marketing budget. The green marketing claims must be credible. Companies need to provide a level of detail about the claims that make them meaningful, and be able to
substantiate those claims. Customers need to believe the claims for green marketing to be effective. Green marketing must empower the customers. The green marketing message must make customers feel that by using the product or service they will make a difference. Overcome customers’ concerns about price and product performance. Educate customers about the benefits the product or service provides, and provide testimonials, case studies, or research reinforcing the performance and value claims. Green marketing can be an effective and useful tool, but it must align with customers’ needs. If environmental concerns aren’t important to customers, green marketing will not be effective. However, if customers do place high importance on green products and sustainability issues, green marketing can be a powerful way to positively position the company and its products and services
BENEFITS OF GREEN MARKETING Today's consumers are becoming more and more conscious about the environment and are also becoming socially responsible. Therefore, more companies are responsible to consumers' aspirations for environmentally less damaging or neutral products. Many companies want to have an early-mover advantage as they have to eventually move towards becoming green. Companies that develop new and improved products and services with environment inputs in mind give
themselves access to new markets, increase their profit sustainability, and enjoy a competitive advantage over the companies which are not concerned for the environment. The key to successful green marketing campaigns is not to be too forceful; instead simply make potential customers aware of the tangible benefits of thinking environmentally, which they can do by frequenting your business Green marketing, offers utilities and power marketers a way to differentiate their numerous products. To date, utility experience with green pricing has been quite mixed. While some programs have met their goals rather easily, others have been unable to educe significant customer response, and have even encountered resistance from environmental and consumer groups. The common thought is that even though the marketing is “green”, it’s an unfair practice that wishes to take advantage of our planet and its many residents. The benefits of being environmentally responsible are easy to grasp. Very few people intend to do harm to the environment and most have some comprehension of how going green is the best thing to do on all fronts. Achieving a green way of living has been on the minds, and the business meetings of executives and business owners more now than ever before. Some believe this easily obtainable dream to be the start of a world-wide neo-industrial revolution. The overall benefits of green marketing are far more vast than anyone can imagine. It’s the snowball effect that could easily put the chill on global warming and take the heat out of your financial stress. Apart from being a consumer-friendly market, the green business is also just smart. This has been a long time coming in a world that immediately needs changes, so that we don’t forever
change into a downtrodden society who’s inhabiting a planet on its last gasp. As a complete race of people, we need green markets for so many major reasons; the minor pleasantries are just an added bonus. Some of the advantages of green marketing are, * It ensures sustained long-term growth along with profitability. * It saves money in the long run, thought initially the cost is more. * It helps companies market their products and services keeping the environment aspects in mind. It helps in accessing the new markets and enjoying competitive advantage. * Most of the employees also feel proud and responsible to be working for an environmentally responsible company
ECO FRIENDLY PRODUCT Eco-products are products with strong environmentally sound features. Some of the eco products are as follow:
HANDMADE PAPER : Hand made papers don't only reduce pollution by 70 %, but also it helps in saving trees as it uses non-wood raw materials. Thus, promoting the handmade papers is in dire need today.
ECO WHEELS: The use of Eco wheels, such as electric vehicles (EVs) can help greatly in reducing air pollution. Also it can be
in great handy in decreasing the energy consumption by 20 %.
ECO FURNITURE: Eco-friendly furniture are good alternative to wooden furniture. Eco-friendly furniture use less wood and more use of waste products and other products, the use of which are not a threat to our environment,
ECO FAN: Eco fans don't need electricity or any external batteries to work, as the thermoelectric module works a small generator to power the fan. This environment friendly fan is capable of distributing the warm in whole of your house.
ECO FRIENDLY PAINTS: Eco friendly paints carry non-toxic elements, which have lesser chemical element. Made of naturally derived raw materials, Eco friendly paints are in great need for healthier environment.
HANDICRAFT PRODUCTS: Eco friendly handicraft items are mostly handmade and are environment friendly, which use less consumption of energy. Besides, these items also help eradicating unemployment.
PAPER BAGS AND NOTEBOOKS: Made of handmade papers, paper bags are best alternative to plastic bags, which are not recyclable and are danger to ecology. Using paper bags and notebooks are aimed to save trees.
GREEN MARKETING CASES *
Philips Light's CFL
Philips Lighting's first shot at marketing a standalone compact fluorescent light (CFL) bulb was Earth Light, at $15 each versus 75 cents for incandescent bulbs. The product had difficulty climbing out of its deep green niche. The company re-launched the product as "Marathon," underscoring its new "super long life" positioning and promise of saving $26 in energy costs over its five-year lifetime. Finally, with the U.S. EPA's Energy Star label to add credibility as well as new sensitivity to rising utility costs and electricity shortages, sales climbed 12 percent in an otherwise flat market. * ELECTRONIC SECTOR The consumer electronics sector provides room for using green marketing to attract new customers. One example of this is HP's promise to cut its global energy use 20 percent by the year 2010. To accomplish this reduction below 2005 levels,
The Hewlett-Packard Company announced plans to deliver energy-efficient products and services and institute energy-efficient operating practices in its facilities worldwide. * INTRODUCTION OF CNG IN DELHI New Delhi, capital of India, was being polluted at a very fast pace until Supreme Court of India forced a change to alternative fuels. In 2002, a directive was issued to completely adopt CNG in all public transport systems to curb pollution
MARUTI: GREENING OF SUPPLY CHAIN The company has remained ahead of regulatory requirements in pursuit of environment protection and energy conservation at its manufacturing facilities, and in development of products that use fewer natural resources and are environment friendly. The company credited the 'Just-in-Time' philosophy adopted and internalized by the employees as the prime reason that helped to excel in this direction. The company has been promoting 3R since its inception. As a result the company has not only been able to recycle 100% of treated waste water but also reduced fresh water consumption. The company has implemented rain water harvesting to recharge the aquifers. Also, recyclable packing for bought out components is being actively promoted. The company has been facilitating implementation of Environment Management System (EMS) at its suppliers' end.
Regular training programs are conducted for all the suppliers on EMS. Surveys are conducted to assess the vendors who need more guidance. The systems and the environmental performance of suppliers are audited.
HCL’s ENVIRONMENT MANAGEMENT POLICY UNDER HCL ECOSAFE *
In building a system to identify, develop and sustain the maintenance of an environment management system at corporate level they have formulated a program that is known as HCL's ecosafe. The aim is to encapsulate knowledge, awareness, and key developments on all environmental issues faced by today's world and to incorporate these in HCL's operations assuring their commitment in delivering quality products, solutions and services.
NOKIA THE TAKE BACK CAMPIAGN Nokia is also doing its share in reducing the waste generated by its products. Nokia’s Take-Back campaign encourages users to give their old, broken, unused cell phones and chargers for recycling at their Nokia Priority dealers. One of the great benefits of this campaign is that Nokia doesn’t discriminate by brand – all cell phones and chargers of any brand are accepted, thus reducing the growing amount of electronic waste piling up on landfills. It’s also a step toward green education: a recent survey
showed India at the bottom of the chart, with only 17 percent of respondents having knowledge about the recyclability of phones. The Take-Back campaign is running successfully in 85 countries. It was recently launched in India, specifically in Bangalore, Delhi, Gurgaon and Ludhiana, with over 1,300 recycling bins distributed just in the first months.
ITC * ITC has been 'Carbon Positive' three years in a row (sequestering/storing twice the amount of CO2 than the Company emits). * 'Water Positive' six years in a row (creating three times more Rainwater Harvesting potential than ITC's net consumption). * Close to 100% solid waste recycling. * All Environment, Health and Safety Management Systems in ITC conform to the best international standards. * ITC's businesses generate livelihoods for over 5 million people. * ITC's globally recognised e-Choupal initiative is the world's largest rural digital infrastructure benefiting over 4 million farming families. * ITC's Social and Farm Forestry initiative has greened over 80,000 hectares creating an estimated 35 million person days of employment among the disadvantaged.
* ITC's Watershed Development Initiative brings precious water to nearly 35,000 hectares of drylands and moisture-stressed areas. * ITC's Sustainable Community Development initiatives include women empowerment, supplementary education, integrated animal husbandry programmes.
Some more Examples: * McDonald's restaurant's napkins, bags are made of recycled paper. * Coca-Cola pumped syrup directly from tank instead of plastic which saved 68 million pound/year. * Badarpur Thermal Power station of NTPC in Delhi is devising ways to utilize coal-ash that has been a major source of air and water pollution. * Barauni refinery of IOC is taken steps for restricting air and water pollutants
Five simple rule to green marketing 1. Know your customer. If you want to sell a greener product to consumers, you first need to make sure that the consumer is aware of and concerned about the issues that your product attempts to address. (Whirlpool learned the hard way that consumers wouldn't pay a premium for a CFC-free refrigerator because consumers didn't know what CFCs were.
2. Empower consumers. Make sure that consumers feel, by themselves or in concert with all the other users of your product, that they can make a difference. This is called "empowerment" and it's the main reason why consumers buy greener products. 3. Be transparent. Consumers must believe in the legitimacy of your product and the specific claims you are making. Caution: There's a lot of skepticism out there that is fueled by the raft of spurious claims made in the "go-go" era of green marketing that occurred during the late 80s-early90s - one brand of household cleaner claimed to have been "environmentally friendly since 1884"! 4. Reassure the buyer. Consumers need to believe that your product performs the job it's supposed to do - they won't forego product quality in the name of the environment. 5. Consider your pricing. If you're charging a premium for your product - and many environmentally preferable products cost more due to economies of scale and use of higher-quality ingredient- make sure that consumers can afford the premium and feel it's worth it. Many consumers, of course, cannot afford premiums for any type of product these days, much less greener ones, so keep this in mind develop your target audience and product specifications."
PATHS TO GREENNESS Green marketing involves focusing on promoting the
consumption of green products. Therefore, it becomes the responsibility of the companies to adopt creativity and insight, and be committed to the development of environment-friendly products. This will help the society in the long run. Companies which embark on green marketing should adopt the following principles in their path towards "greenness." * Adopt new technology/process or modify existing technology/process so as to reduce environmental impact. * Establish a management and control system that will lead to the adherence of stringent environmental safety norms. * Using more environment-friendly raw materials at the production stage itself. * Explore possibilities of recycling of the used products so that it can be used to offer similar or other benefits with less wastage.
SOME PROBLEMS WITH GREEN MARKETING There are a number of potential problems that must overcome. One of the main problems is that firms using green marketing must ensure that their activities are not misleading to consumers or industry, and do not breach any of the regulations or laws dealing with environmental marketing. Green marketing claims must clearly state environmental benefits. A problem of the firms face is that those who modify their products due to increased consumer concern must contend with the fact that consumers' perceptions are sometimes not correct. For example the McDonald's case where it has replaced its clam shells with plastic coated
paper. There is ongoing scientific debate which is more environmentally friendly. Some scientific evidence suggests that when taking a cradle to grave approach, polystyrene is less environmentally harmful if this is the case McDonald's bowed to consumer pressure, yet has chosen the more environmentally harmful option. When firms attempt to become socially responsible, they may face the risk that the environmentally responsible action of today will be found to be harmful in the future. Take for example the aerosol industry which has switched from CFCs (chlorofluorocarbons) to HFCs (hydro fluorocarbons) only to be told HFCs are also a greenhouse gas. Some firms now use DME (di-methyl ether) as an aerosol propellant, which may also harm the ozone layer. Given the limited scientific knowledge at any point, it may be impossible for a firm to have made the correct environmental decision. This may explain why some firms, like Coca-Cola and Walt Disney World, are becoming socially responsible without publicizing the point. They may be protecting themselves from potential future negative backlash; if it is determined they made the wrong decision in the past. While governmental regulation is designed to give consumers the opportunity to make better decisions or to motivate them to be more environmentally responsible, there is difficulty in establishing policies that will address all environmental issues. For example, guidelines developed to control environmental marketing address only a very narrow set of issues, i.e., the truthfulness of environmental marketing claims. If governments want to modify consumer behavior they need to establish a different set of regulations. Thus governmental attempts to protect the environment may result in a proliferation of regulations and guidelines, with no one central controlling body. Reacting to competitive pressures can
cause all "followers" to make the same mistake as the "leader." Mobil Corporation who has followed the competition and introduced "biodegradable" plastic garbage bags, as because technically these bags were biodegradable, the conditions under which they were disposed did not allow biodegradation to occur. Mobil was sued by several US states for using misleading advertising claims. Thus blindly following the competition can have costly ramifications. The push to reduce costs or increase profits may not force firms to address the important issue of environmental degradation. End-of-pipe solutions may not actually reduce the waste but rather shift it around. While this may be beneficial, it does not necessarily address the larger environmental problem, though it may minimize its short term affects. Ultimately most waste produced will enter the waste stream, therefore to be environmentally responsible organizations should attempt to minimize their waste, rather than find "appropriate" uses for it.
SOLUTIONS Following steps should be taken to solve the problem regarding green marketing: Organizing policies Effective communication Constantly refine the process and product Environmentally responsible organizations should attempt to minimize their waste
Public Opinion on Green Marketing: * Now eco packaging is poised to become the next lowhanging fruit of the clean tech world. Investors and entrepreneurs this week at Europe's most important annual clean tech conference reported unprecedented interest in reducing the use of raw materials while finding superior protection for food and other products. * Consumers are increasingly putting plastic shopping bags and non-green wrapping items on their naughty list, according to Deloitte's 2008 Annual Holiday Survey. Nearly half of the 13,000 consumers polled said they'd be willing to pay more for green gifts. This was up from 17 percent last year. * Consumers perceive themselves as being environmentally responsible. Successful green marketing requires matching a company's brand attributes with its customers' identity as "green." An article suggested examining green marketing from the perspective of the 4 P's of marketing -- product, price, placement and promotion -- plus a 5th P, "prove it." * Americans are quick to identify polluting companies as "socially irresponsible" and make their purchasing decisions accordingly, says a new survey. The poll also found that American consumers between the ages of 1829 are more likely to spend more on organic, environmentally preferable or fair trade products than other age groups. * The survey, by the research firm Global Market Insite, quizzed more than 15,000 online consumers in the U.S.
and 16 other countries about their socially conscious business practices. * Americans placed the highest value on corporate community involvement; when asked what factor was the most important in determining if a business is socially responsible, "contributing to the community" (e.g. sponsorship, grants, employee volunteer programs) came in highest with 47%. On the other hand, all of the other countries surveyed (India, Canada, Australia, Germany, China, and Japan) selected environmentally preferable practices (recycling, using biodegradable products) as the top factor. * "In the high-tech era where employees are expected to work 24/7, it's significant that Americans rate giving back to the community as their top priority in recognizing socially responsible companies," said Marjorie Thompson, co-author of Brand Spirit: How Cause Related Marketing Builds Brands. "It shows that people want to feel connected to each other and that they are willing to reward businesses who tap into this sense of mutual support and belonging. Companies will need to start thinking of their community programs as core to their businesses and brands, and central to how they market themselves." * Not surprising, the U.S., along with other countries such as India and China, which have experienced environmental disasters caused by corporations (e.g. Love Canal, Bhobal, Exxon Valdez) or have had to deal with major polluting issues (e.g. coal plants, manufacturing), believe that damaging the environment is associated with acting socially irresponsible. Other countries, including France (60%), Denmark (52%) and Italy (45%) selected the use of child labor as the main
factor in making them think a corporation is socially irresponsible. * Thompson adds: "Based on the findings, Generation Y is obviously more environmentally conscious and socially savvy, which is expected given that many are aware of the issues surrounding globalization and trade and how this can negatively affect the environment, labor pool and the local communities." * Surprisingly, a large majority of online consumers in the less developed countries of China and India, 91% and 71% respectively, will pay more for socially responsible products, while almost half (47%) of the U.K. respondents indicated they would spend more for these types of goods.
Green marketing should not neglect the economic aspect of marketing. Marketers need to understand the implications of green marketing. If we think customers are not concerned about environmental issues or will not pay a premium for products that are more ecoresponsible, think again. We must find an opportunity to enhance our product's performance and strengthen your customer's loyalty and command a higher price. Green marketing is still in its infancy and a lot of research is to be done on green marketing to fully explore its potential. Think of a refrigerator for example. While we may have had to be convinced in the 1950s to buy a refrigerator, we would have wanted the great white box to look cool in the 1970s, but in today's uncertain world, we might ask ourselves about the impact of the chlorofluorocarbons (CFCs) that our refrigerator is emitting and demand a more environmentally friendly refrigerator. So, if today's successful marketing is about appealing to personal values and delivering consumer empowerment, then surely the time is right to inject sustainable development into the marketing mix to help address some of gritty issues currently facing our planet. Green marketing methods produce highly effective results. They apply all of the steps you need to cut costs, raise response rates and increase growth in the most important marketing metric we are all held accountable for—the bottom line. The key elements of green marketing can be summarised as under: •
A balanced approach to the social, technological, economic and physical aspects of businesses and societies.
An emphasis on long term sustainable qualitative development rather than short-term unsustainable quantitative growth. A holistic approach aimed at reversing the reductionalist and fragmented approach of previous business theory and practice. A consideration of consumers as real human beings rather than as hypothetical ‘rational economic’entities. An emphasis on meeting the genuine needs of consumers, rather than on stimulating superficial desires. A recognition that consumers and society have multiple and sometimes conflicting wants and needs. A view of the company and all its activities as part of the ‘product’ that is consumed. A recognition that the large scale long distance nature of the current economy is not sustainable, and that in the future small and local will be beautiful. Embracing the concept of eco-performance which incorporates the non-market outputs of the company, with performance of the product during and after use and the environmental impact of companies which contribute to the creation and marketing of the product elsewhere in the supply chain. The pursuit of added socio-environmental value as well as added techno-economic value.
REFERENCES 1. Chopra, S. Lakshmi (2007), "Turning Over a New Leaf", Indian Management, Vol-64, April2007 2. Ottoman, J.A. et al, "Avoiding Green Marketing Myopia", Environment, Vol-48, June-2006 3. www.greenmarketing.net/stratergic.html 4. www.epa.qld.gov.au/sustainable_ industries 5. www.wmin.ac.uk/marketing research/marketing/greenmix.html 6. http://www.green-markets.org/context.htm 7. Thomas L. Friedman (April 15, 2007), "The Power of Green", 8. Michael Jay Polanski (1995). "Using strategic alliances to develop credible green marketing". Journal of Consumer Market
CONTENTS PARTICULARS NO
INTRODUCTION MEANING OF GREEN MARKETING DEFINITION HISTORY IMPORTANCE ADOPTION GREEN CODE STRATEGIES AND TACTICS 14 BASIS BENEFITS 17 ECOPRODUCTS GREEN MARKETING CASES 22 RULES OF GREEN MARKETING 24 PROBLEM OF GREEN MARKETING 26 SOLUTIONS AND PUBLIC OPINION 29
1 2 3 4 5-6 7-10 11 1215 1618 19232527-
CONCLUSIONS 31 REFERENCES
SUBMITTED TO: BY: MRS.SALONI P. DIWAN KAUR
MR. VARUN BHARAT MBA(GEN)SEC.A FACULTY USM,KUK
ACKNOWLEGEMENT I take this opportunity to thank Mrs. Saloni Pawan Diwan and Mr.Varun Bharat for giving me insight knowledge and their valuable advice, timely suggestions and constant support throughout the project. I would also like to thank my other lecturers and my friends who shared their valuable
information which proved to be very helpful while preparing the project.