Green Marketing
Green Marketing
Green Marketing
ON
GREEN MARKETING
15421037
S.M.S
PUNJABI UNIVERSITY PATIALA
INDEX
INTRODUCTION
Consider this: in a study by Accenture that polled people from Europe, Asia, and
North America, nearly nine out of 10 consumers were willing to pay more for green
products (those that reduced greenhouse gas emissions in particular). While the
percentage of people willing to pay a premium for eco-friendly products will go up
and down as times change (see the Green Gauge Report put out annually by GfK
Custom Research for yearly green buying stats) environmental disasters increase
awareness and interest in green products, for instance, while prosperous economic
times often dull interest in general, the market for green products and services is
growing every year as people become more aware of the impact of their consumer
choices.
That said, environmental marketing is a tricky business, especially given the relative
skepticism most people have toward green branding claims. Green washing abounds
in the world of eco-friendly products and services, and with so many companies
failing to live up to their green business promises, consumers are understandably wary
of dubious branding.
DEFINITION OF GREEN MARKETING
Green marketing definitions can be a little confusing, since green marketing can refer
to anything from greening product development to the actual advertising campaign
itself. Going by alternative names such as sustainable marketing, environmental
marketing, green advertising, eco marketing, organic marketing, all of which point to
similar concepts though perhaps in a more specific fashion, green marketing is
essentially a way to brand your marketing message in order to capture more of the
market by appealing to peoples desire to choose products and services that are better
for the environment.
There are many environmental issues impacted by the production of goods and
rendering of services, and therefore there are also many ways a company can market
their eco-friendly offerings. Green marketing can appeal to a wide variety of these
issues: an item can save water, reduce greenhouse gas emissions, cut toxic pollution,
clean indoor air, and/or be easily recyclable. When put side by side with the
competition, the more environmental marketing claims your product or service can
make, the more likely it is the consumer will select it, provided the price point isnt
too much higher than the alternative.
Green products: Companies producing products can do many things to improve the
green factor of their offerings, including choosing sustainable materials, designing
products to save energy and water, and making products that are less toxic and more
natural than competitors goods. Greener products will also be packaged in an eco-
friendly manner and will be made to be easily recycled or composted.
Sustainable marketing: Customer will also want to ensure that the actual marketing
systems you use are green, which is really distinct from your operational
sustainability which focuses on manufacturing and production. For instance, when
printing marketing materials, use 100% post-consumer recycled paper made without
chlorine (called processed chlorine free) and printed using plant-based dyes (like
soy inks). You could also investigate tools like green web hosting, carbon offsets for
any marketing emissions you may cause, recycling any unused materials from
billboards and signage, ecological packaging, and so on.
When looking through the literature there are several suggested reasons for firms
increased use of Green Marketing. Five possible reasons are as follows:
1. Organizations perceives environmental marketing to be an opportunity that can be
used to achieve its objectives.
2. Organizations believe they have a moral obligation to be more socially responsible.
Governmental bodies are forcing firms to become more responsible.
3. Competitors' environmental activities pressure firms to change their environmental
marketing activities.
4. Cost factors associated with waste disposal, or reductions in material usage forces
firms to modify their behavior.
A. 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.
B. 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".
C. 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.
D. PROMOTION
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. Toyota is trying to push gas/electric hybrid technology
7 into much of its product line. It is also making the single largest R&D investment in
the every-elusive hydrogen car and promoting itself as the first eco-friendly car
company. International business machines Corporation (IBM) has revealed a portfolio
of green retail store technologies and services to help retailers improve energy
efficiency in their IT operations. The center piece of this portfolio is the IBM
SurePOS 700, a point-of-sale system that, according to IBM, reduces power
consumption by 36% or more. We even see the names of retail outlets like "Reliance
Fresh", Fresh@Namdhari Fresh and Desi, which while selling fresh vegetables and
fruits, transmit an innate communication of green marketing.
Green marketer can attract customers on the basis of performance, money savings,
health and convenience, or just plain environmental friendliness, so as to target a wide
range of green consumers.
As with any other major business endeavour, easier said than done. Many a
responsible company has run into trouble with these very same sustainability-minded
NGOs and consumer groups thanks to a poorly planned and crafted marketing
message. Protect your company from these common pitfalls and start taking
advantage of news opportunities by heeding my Rules of 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
wouldnt pay a premium for a CFC-free refrigerator because consumers didnt know
what CFCs were).
3. Be transparent. Consumers must believe in the legitimacy of your product and the
specific claims you are making. Caution: Theres a lot of scepticism out there that is
fuelled by the raft of spurious claims made in the go-go era of green marketing that
occurred during the late 80searly90s 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
its supposed to do they won't forego product quality in the name of the
environment. (Besides, products that dont work will likely wind up in the trash bin,
and thats not very kind to 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 ingredients make sure that consumers can afford the premium and
feel its 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 as you develop your
target audience and product specifications.
a. Opportunity
In India, around 25% of the consumers prefer environmental-friendly products, and
around 28% may be considered healthy conscious. Therefore, green marketers have
diverse and fairly sizeable segments to cater to. The Surf Excel detergent which saves
water (advertised with the message"do bucket paani roz bachana") and the energy-
saving LG consumers durables are examples of green marketing. We also have green
buildings which are efficient in their use of energy, water and construction materials,
and which reduce the impact on human health and the environment through better
design, construction, operation, maintenance and waste disposal. 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.
b. Social Responsibility
Many companies have started realizing that they must behave in an environment-
friendly fashion. They believe both in achieving environmental objectives as well as
profit related objectives. The HSBC became the world's first bank to go carbon-
neutral last year. Other examples include Coca-Cola, which has invested in various
recycling activities. Walt Disney World in Florida, US, has an extensive waste
management program and infrastructure in place.
c. Governmental Pressure
Various regulations rare framed by the government to protect consumers and the
society at large. 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.
d. Competitive Pressure
Many companies take up green marketing to maintain their competitive edge. The
green marketing initiatives by niche companies such as Body Shop and Green &
Black have prompted many mainline competitors to follow suit.
e. Cost Reduction
Reduction of harmful waste may lead to substantial cost savings. Sometimes, many
firms develop symbiotic relationship whereby the waste generated by one company is
used by another as a cost-effective raw material. For example, the fly ash generated
by thermal power plants, which would otherwise contributed to a gigantic quantum of
solid waste therefore, is used to manufacture fly ash bricks for construction purposes.
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.
Starts with the identification of needs Starts with the identification of the
of their target customers. needs of their target customers.
Customers need is at center point for Environment needs is at the center
decision making. point for decision making.
Self centered approach with short Social cost benefit approach with
term orientation and without giving long term orientation and giving
the attention to environment. importance to environment.
Development of product as per their Development of product by analyzing
needs, delivering and providing the ecological compatibility of the
after sales services. product, its raw material. packaging
and reuses etc.
With a aim of achieving satisfied Customer satisfaction in an
customers. environment friendly way.
Practicing is good for company as Remedy for mitigating climate
well as customers. change and global warming.
Practicing is good for mankind as
well as environment.
Remain with satisfied customers. Remain with satisfied eco-friendly
customers.
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.
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.
New Concept
Indian literate and urban consumer is getting more aware about the merits of Green
products. But it is still a new concept for the masses. The consumer needs to be
educated and made aware of the environmental threats. The new green movements
need to reach the masses and that will take a lot of time and effort. By India's
ayurvedic heritage, Indian consumers do appreciate the importance of using natural
and herbal beauty products. Indian consumer is exposed to healthy living lifestyles
such as yoga and natural food consumption. In those aspects the consumer is already
aware and will be inclined to accept the green products.
EXAMPLE 4 : India's 1st Green Stadium The Thyagaraja Stadium stands tall in the
quiet residential colony behind the Capital's famous INA Market. It was jointly
dedicated by Union Sports Minister MS Gill and Chief Minister Sheila Dikshit on
Friday. Journal of Engineering, Science and Management Education Dikshit said that
the stadium is going to be the first green stadium in India, which has taken a series of
steps to ensure energy conservation and this stadium has been constructed as per the
green building concept with eco-friendly materials.
EXAMPLE 5:Eco-friendly Rickshaws before CWG Chief minister Sheila Dikshit
launched on Tuesday a battery operated rickshaw, E-rick, sponsored by a cellular
services provider, to promote eco-friendly transportation in the city ahead of the
Commonwealth Games.
EXAMPLE 6 : Wipro Green I Wipro can do for you in your quest for a sustainable
tomorrow - reduce costs, reduce your carbon footprints and become more efficient -
all while saving the environment. Wipro's Green Machines (In India Only) Wipro
InfoTech was India's first company to launch environment friendly computer
peripherals. For the Indian market, Wipro has launched a new range of desktops and
laptops called Wipro Green ware. These products are RoHS (Restriction of Hazardous
Substances) compliant thus reducing e-waste in the environment.
EXAMPLE 7 : Agartala to be India's first Green City Tripura Sunday announced
plans to make all public and private vehicles in Agartala run on compressed natural
gas (CNG) by 2013, thus making the capital India's first green citsy.Tripura Natural
Gas Co Ltd (TNGCL), a joint venture of the Gas Authority of India Ltd (GAIL) and
the Tripura and Assam governments, has undertaken a project to supply CNG to all
private and government vehicles.CNG will also be available to those now using
electricity, petrol and diesel to run various machineries.TNGCL chairman Pabitra Ker
told reporters. He said: The company will soon provide PNG connections to 10,000
new domestic consumers in the city and outskirts. Agartala will be the first city in
India within the next three years to become a green city.
EXAMPLE 8 : Going Green: Tata's new mantra The ideal global benchmark though
is 1.5. Tata Motors is setting up an eco-friendly showroom using natural building
material for its flooring and energy efficient lights. Tata Motors said the project is at a
preliminary stage. The Indian Hotels Company, which runs the Taj chain, is in the
process of creating eco rooms which will have energy efficient mini bars, organic bed
linen and napkins made from recycled paper. But there won't be any carpets since
chemicals are used to clean those. And when it comes to illumination, the rooms will
have CFLs or LEDs. About 5% of the total rooms at a Taj hotel would sport a chic
eco-room design. One of the most interesting innovations has come in the form of a
biogas-based power plant at Taj Green Cove in Kovalam, which uses the waste
generated at the hotel to meet its cooking requirements. Another eco-friendly
consumer product that is in the works is Indicia EV, an electric car that will run on
polymer lithium ion batteries. Tata Motors plans to introduce the Indicia EV in select
European markets this year.
WEAKNESS:
Most customers choose to satisfy their personal needs before caring for environment.
Overemphasizing greenness rather than customer needs can prove devastating for a
product.
Many customers keep away from products labelled Green because they see such
labelling as a marketing gimmick, and they may lose trust in an organization that
suddenly claims to be green. E.g. products cannot be recycled, and hazardous wastes)
of a company.
OPPORTUNITIES:
Marketing to segment which are becoming more environmentally aware and
concerned. These consumers are demanding products that conform to these new
attitudes.
Organizations perceive green marketing to be a competitive advantage, relative to the
competitors. Firms, therefore, strive to improve upon their societal awareness. This
complements the increase in consumers socially conscious behaviour and will
therefore give them an advantage over competitors who do not address these issues.
E.g. offering an environmental friendly product and saving resources, and relating
them to internal strengths.
THREATS:
Uncertainty as to the environmental impact of present activities, including that is
perceived to be less environmentally harmful.
Uncertainty as to which green marketing activities are acceptable from a
government perspective.
The possibility of a backlash from consumers or government based on existing green
marketing claims, threat one and two above may cause backlash to arise.
E.g. competitors gain market shares with green products and increased environmental
regulations).
Wipro Technologies
The list of top 10 green Indian
companies is never complete without
Wipro which climbed to the top five brand
league in Green peaces 'Guide to Greener
Electronics' ranking. Despite the global
financial
Wipro broadens its green IT initiatives crisis,
through its participation in "The Green Wipro held
Grid" fast to its
IDEA Cellular
One of the best Indian companies, IDEA,
paints India green with its national Use
Mobile, Save Paper campaign. The
company had organized Green Pledge
campaigns at Indian cities where thousands
came forward and pledged to save paper and
trees. IDEA has also set up bus shelters with
potted plants and tendril climbers to convey
IDEAs green bus shelter in Mumbai
the green message.
HeroHondaMotors
Hero Honda is one of the largest two-
wheeler manufacturers in India and an
equally responsible top green firm in India.
The companys philosophy of continuous
innovation in green products and
solutions has played a key role in striking
the right balance between business, mankind Hero Honda Green Ambassadors:
and nature. winners of the international inter-
school environment quiz competition
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.
Richa Agrawal, Green Marketing: An Emerging Trend (PMR, Vol.5, April 2000)
Magazines:
Green at Work Magazine : Edition - March/April 2006 by Bruce Piasecki.
Article - Future of Green Marketing
Edition - Jan/Feb 2007 by Rob Bradley
Article - Green Warming Solutions
Websites:
http://www.greenmarketing.com/blog/
http://greenmarketing.net/stratergic.html
http://epa.qld.gov.au/sustainable_ industries
http://wmin.ac.uk/marketing research/marketing/greenmix.html