Green Marketing
Green Marketing
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Green Marketing
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This paper will attempt to introduce – the terms an d concept of green-marketing; about the
importance of green marketing; examine some reasons that make the organizations interested
to adopt green marketing philosophy; it also highlights some problems that organization may
face to implement green marketing and it’s managerial implications along with few case
points. Last but not the least the paper “Green Marketing – A Changing Concept In
Changing Times”, is a conceptua l paper on green marketing, which is an emerging area of
interest. There is a need of paradigm shift in the way the management institutes and
business- houses think about their role in attaining sustainable development.
1. Introduction
1.1 What is Green Marketing?
Environmental issues have gained importance in business as well as in public life through out
the world. It is not like that a few leaders of different countries or few big renowned business
houses are concerned about the day to day deterioration of oxygen level in our atmosphere
but every common citizen of our country and the world is concerned about this common
threat of global warming.
So in this scenario of global concern, corporate houses has taken green-marketing as a part of
their strategy to promote products by employing environmental claims either about their
attributes or about the systems, policies and processes of the firms that manufacture or sell
them. Clearly green marketing is part and parcel of over all corporate strategy; along with
manipulating the traditional marketing mix(product, price, promotion and place) , it require
an understanding of public policy process. So we can say green marketing covers a broad
range of activities. Different writers has given different definition about green marketing
which tried to cover all major components of green marketing
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Mintu and Lozada (1993) defined green marketing as the application of marketing tools to
facilitate exchanges that satisfy organizational and individual goals in such a way that the
preservation, protection and conservation of the physical environment is upheld”.
According to Stanton and Futrell (1987)-all activities designed to generate and facilitate any
exchanges intended to satisfy human needs and wants; therefore it ensures that the interest of
the organization and all it consumers are protected, as voluntary exchange will not take place
unless the buyers and sellers are mutually benefited.
This second point is very important for human consumption by its very nature is
destructive to the natural environment. To be more accurate products making green claims
should state they are “ less environmentally harmful” rather than “ environmental
friendly.” Thus green marketing should look at mini mizing environmental harm, not
necessarily eliminating it.
The industrial houses has recognised that the entire system of production and consumption
determines environmental quality. Environmental impacts are a function of the way services
are provided and the way goods are produced, delivered, used and disposed off. Production
and consumption are considered together because gains made by controlling, reducing or
minimizing pollution from production can be soon overshadowed by the impacts from
concurrent increases in the scale of demand for those services and goods from growing
consumer base.
we can see that green marketing encompasses a broad range of activities including product
modification, change to production process, packaging change as well as modifying
advertising.
So in this era where consumers determine the fate of a company, green marketing imparts a
proactive strategy for these companies to cater the market by imparting nature-friendly
products/ services which otherwise reduce or minimize any detrimental impact on
environment.
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A green- marketing approach in the product area promotes the integration of environmental
issues into all aspects of the corporate activities; from strategy formulation, planning, re-
engineering in production process and dealing with consumers. So to remain competitive
within the challenge thrown by the environment protectionists , the companies will have to
find answer through their marketing strategies, product& service redesign, customer
handling etc. in this endeavour the companies may go for new technologies for handling
waste, sewage and air pollution; it can go for product standardization to ensure
environmentally safe products; by providing truly natural products.
In this regard the companies should be concerned with what happens to a product during
and after its useful life. Companies may manifest this concern through experimentation with
ways to reassess and redesign the product life stages. Life cycle reassessment focuses on
environmental consideration in product development and design, including energy and
material inputs and out-puts in production, consumption and disposal of products. We
would than be able to manage the life stages of a product in an environmental friendly and
eco- efficient manner. Eco-efficient refers to the proper thinking for the use or consumption
of natural resource so that nature is afforded an opportunity to renew itself.
Table-I
Thus the mammoth like challenge of green marketing is to meet the unlimited wants of
consumers within the constraint of limited resources by introducing modern management
tools like TQM, 6-Sigma, 4Rs(Reduce, Reuse, Recycle, Recovery) principles in
production processes of companies. Currently our concern is with the total yield of
production and product marketing processes including waste and pollution.
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1.3 The change in managerial perspective:
Criteria/Goals:
1. Customer satisfaction 1.Customer satisfaction,
2.Orgnisational goal 2.Orgnisational goal,
3. Eco-system compatibility.
Decision making frame of reference
1.Immediate channel network 1.*PSLC: cradle to grave,
2.Fragmented thinking 2. Integrated thinking,
3.Non-boundary spanning 3. Boundary spanning,
4 Short term orientation. 4. Long term orientation.
Philosophical Basis:
1. Anthropocentric 1. Bio-centric,
2. Ecosystem an open sink. 2. Ecosystem physical
limiting factor; eco cost must be paid.
Ecological accountability/responsibility
1. Limited product risk 1. Product risk,
2. Local/regional/national 2.Global/international,
3. No/underpaid ecological costs 3. Full accounting of
ecological cost,
4. Individual organization alone is responsible 4. PSLC members are
mutually responsible,
5. A public sector responsibility 5.Both PSU & private sector.
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2. Why Are Firms Using Green Marketing?
Firms may choose to green their systems, policies and products due to economic and non-
economic pressures from their consumers, business partners, regulators, citizen groups and
other stakeholders(non market environment).some other reasons may includes:
#1.Some scholar claim that green policies/products are profitable: green policies can
reduce costs; green firms can shape future regulations and reap first mover advantage.
#2. Now a days firms are becoming more concerned about their social responsibilities
(S.R). They have taken S.R as a good strategic move to build up an image in the heart of
consumers. Even the socially responsible firms are getting leverage, whenever they intend
to enter into foreign countries. There are example of firms like ITC, HLL(Surf-excel) who
are heavily promoting them as an environmentally concerned firms, where as there is
example of firms who are working in this direction in a silence manner like coca-cola, who
have invested corers of money in various recycling activities, as well as having modified
their packaging to minimize it’s environmental impact. While being concerned about the
environment coke has not use their concern as a marketing tool. Another big organization
who is also working in this field without claiming any credit is Walt Disney World
(WDW).
So we can see that firms in this situation have taken two perspectives: (1) they are using
green marketing as marketing tool; (2) they are working in this field without promoting
the fact.
#3. Change in customers attitude: with increasing concern about environment, consumers
attitude towards firms having green policies or green products are becoming motivating
factor.
# 4. Governmental pressure: in all most all civilized countries Govt. has the law to protect
the consumers and the environment from the harmful goods or byproducts and ensure
through law that all types of consumers have the ability to evaluate the environmental
composition of goods. Govt. established several regulations to control the amount of
hazardous waste produced by firms and many by-products of production are controlled
through the issuing of various environmental licenses, thus shaping the behaviour of
organization towards more socially responsible one. In some countries govt. has designed
guidelines in such a way that consumer would have appropriate information which would
enable them to evaluate organisation’s environmental claims.
#5 . Competitive pressure: competition is the integral part of business; and you can not
over-look any competitive action taken by your competitor. So to be in the market you
have to have a vigil over your competitor’s move for marketing it’s products. Some firms
ahs taken green-marketing as a strategy to build up it’s image rather than inculcate it as a
part of the policy and work silence. In some instances this competitive pressure has
caused an entire industry to modify and thus reduce it’s detrimental environmental
behaviour.
#6. Cost or profit issue: firms may also use green-marketing in an attempt to have an
control over the cost associated with waste disposal. therefore firms that would able to
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introduce green-marketing by not inculcating or lesser use of harmful ingredients would
able to reduce it’s operating cost to an considerable extend.
In other case the firm may attempt to find end-of –pipe solution, instead of minimizing
waste. Take the example of China and Denmark;
In China organic waste from thousands of small straw pulp mills is used as agricultural
fertilizer.
#2 Another problem the firm may face is that, those who modify their products due to
increase customers concern must aware about the fact that customer’s perceptions are
some time not correct. Take the example when paper pack and jute bag were replaced
by the synthetic pack for the sake of saving the trees the result became more
environmental fatal.
#3. 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 near future.
For example some companies manufacturing refrigerators, air-conditioning machine have
replaced environmentally harmful CFCs(chlorofluorocarbon) with HFCs (hydro
fluorocarbon) which in later revealed is also a green-house gas. Some firms now shifted to
DME(dimethyl ether), which may also harm the ozone layer. So we can see that with the
limited scientific knowledge at any point in time, it may be impossible for a firm to be
certained they have made the correct environmental decision.
This may explain why some firms, like coca-cola and Walt Disney World(WDW), are
working as a socially responsible company without publicizing their endeavour, as it has
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been mentioned earlier in this article.
#4. Reacting to competitive pressure can cause all followers to make the same mistake as
the leader. Example is Mobil, world renounced engine-oil manufacturing company,
claims for it biodegradable plastic garbage bags. But the condition under which it become
biodegradable is not allowed by natural processes. For this Mobil was sued by several US
states for using misleading advertising claims. Thus blindly following the competitors
can have costly ramifications.
#5. Though Govt. has formulated several laws and regulations to give consumers the
opportunity to make better decisions or motivate them to be more environmentally
responsible, there is always a difficulty in establishing policy that would cover all
environmental issues.
The greenwashing index was announced at the 2007 UN Climate change conference held
at Bali, Indonesia with an objective to eradicate bad environmental marketing claims and
at the same time shine a positive light on companies making measurable reduction in
carbon emissions related to climate change.
Experts urged the consumers and the industries to be ever vigilant in preventing
greenwashing. they believed that one of the major factors that led to greenwashing was
the absence of a central agency to certify the green credentials of a firm. This allowed
companies, even those with questionable green credentials to step forward and call
themselves green.
It appears that consumers are not overly committed to improve their environment
and may be looking to lay too much responsibility on industries and govt.
according to an American survey it has been found that more than 50% of
American adults say they would do more for environment if only they come to
know how? So education is crucial for a green-marketing firm. Does your product
save water or energy? Does it helps cut down waste? Does it contain fewer toxics
that can harm children or wild life? Let your customers know these.
In Table –II, we can see the depth of understanding -level the US people have about
green products:
Percent of US people whoever bought a product because the advertising or the level
said the product was environmentally safe or biodegradable.
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Yes, in past Yes, but not in past No, have not Don’t know
two months. two months. bought
Sex:
M 22 18 53 7
F 29 20 46 5
Age:
18-29 23 19 51 6
30-44 31 18 47 3
45-59 27 21 46 6
60+ 18 18 55 8
House-hold
income:
Under $15000 19 13 61 7
$15000-30000 21 17 55 6
$30000-50000 28 22 45 5
$50000+ 35 22 40 4
$75000+ 34 25 38 3
Education:
Non-H.S. grad 14 18 60 8
H.S-grad 24 17 55 5
Some college 31 25 41 4
College grad 33 18 42 8
Occupation:
Exe/professional 38 16 42 4
White collar 28 23 43 6
Blue collar 22 22 51 5
Other Demo
Parent of kids 0-17 31 19 46 4
yrs.
House-hold with 36 21 40 4
personal computer.
too cheap 8%
lazy 23%
no alternative 26%
Antecedent are all those factors affecting firm’s environmental orientation, which
subsequently shapes marketing strategy. According to political economy paradigm, there
are four groups of antecedent factors, namely external polity i.e. socio-political and
regulatory system in which the firm operates, external economy i.e prevailing and
prospective economic environment surrounding the firm, internal polity i.e. the way
power, authority are handle within the firm and internal economy i.e. the way existing
resources are allocated to produce sufficient and satisfactory out-put. The antecedents
have an impact on firms values, belief and attitude towards environmentalism and related
aspects, which acts as a mediator on environmental marketing strategy. Enviro-marketing
strategy provides the central construct of the model, comprising environmental
adjustments of the traditional marketing mix elements( product, price, promotion & place)
to a specific target market setting. Enviro-marketing strategy implementation will have
certain financial, market, customers and competitive outcomes for the organization with
regard to it’s marketing performance. Finally the effect of strategic factors on marketing
performance is controlled by a number of moderators, which can be found either
internally i.e. organizational size, scope of operations etc. or externally, i.e. industry type,
industry growth rate etc, to the organization.
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A Political Economy Perspective” by Constantinos N. Leonidou,Doctoral Student,Leeds University
Business School,University of Leeds,U.K )
With the help of this model the marketing managers will be able to better understand the
critical forces that drive organizations to become environmentally oriented, their
association with marketing strategy formulation will be established and the ultimate
impact on marketing performance will be demonstrated.
Companies that have adopted some types of environmental accountability have found
some benefits in the adaptation of an ecological approach. Some of the activities that
have been implemented include-
Case-I: NDTC: The need to be eco friendly is across the entire spectrum of activities.
This need is greatly influenced by consumer-forums and judiciary. To take an example
when supreme court ordered the Delhi Government to examine ways and means to reduce
pollution in Delhi, it asked the government to introduce clean fuel like CNG in public
transport system. This put pressure on petroleum companies for launching clean fuels
with low sulphur content and lead free petrol. Also the only CNG supply company,
Indraprastha Gas Ltd, had to increase it’s supply. The vehicles had to made appropriate
changes. This led to Delhi Transport Corporation becoming the largest CNG powered
transport system in the country. Today Indraprastha Gas has 121 CNG distribution station
in Delhi with a combine capacity of 16.47 lakhs kg gas per day, catering to about 90000
vehicles.
This growing concern for the environment led to development in oil and gas exploration,
refining and marketing. It also spurred development in the automobile sector which
manufactured vehicles that could run on CNG fuel. Also the vehicles have to conform to
pollution control norms as laid down by the Govt. like Bharat-III, Ero –II.
Case-II: Surf-excel: some kids in Mumbai’s Bainganwadi slums are grateful to Surf-
Excel, the Rs 485cr brand which introduce a feel-good marketing campaign-The Surf
Excel 10/10 drive.
This saw the surf excel buyers in the four cities of Mumbai, Delhi, Bangalore and Kolkata
SMSing an amount to HLL(now HUL). The company in turn donate that amount to an
NGO that was involved in educating underprivileged children.
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Case-III: Ponds: The Rs355cr brand ponds of HLL, tied up with United Nations
Development Fund for Women. For every flap of ponds cold cream mailed by the
consumers, the company would contribute Rs2/- to the fund to fight domestic violence.
Even though the proportion of adspends from its Rs1000cr advertising and promotion
budget have been minimal, HLL says most of its brands will look for long term strategic
linkage with social causes.
Vice President skin care, HLL, Ashok Venkatramani told CNBC-TV18, “ if the activity
is not housed in brand promise, than it looks like a charitable activity and in my view,
those activities are difficult to sustain in long run. In our case , specific to fair and lovely,
or even ponds, these are strongly housed in what the brand stands for and what brand
promise is all about, hence they are easy to sustained and will reap huge benefits.”
Case-V: Tata –Salt: Very recently Tata has lunched a campaign through T.V advertising
that if you will purchase Tata-salt , a significant percent of profit per pack would be
contributed towards the education of underprivileged children of the slams.
But if from detergent to TV sets all brands chase consumers for a cause, there will be a
clutter. At the same time, experts say it is important to find the right fit between brand
and cause that lasts longer than a passing fad.
6. CONCLUSION:
Our understanding to green marketing is still in it’s infancy, perhaps due to the
multidisciplinary nature of the enterprises.
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Marketing scholars focus on a host of business-strategy and public policy issues,
including eco-level and market segmentation and the role of structural factors and
economic incentives in influencing consumer behaviour.
For environmental economists, green marketing signifies a broader trend in the evolution
of environmental policies that focus on information disclosure.
have to satisfy two objectives: improved environmental quality and customer satisfaction.
Misjudging either or overemphasizing the former at the expenses of the latter may cause a
fatal result for companies. Research indicates that many green products have failed
because of green marketing myopia; marketer’s myopic focus on their product’s
greenness over the broader expectations of consumers.
For example Whirlpool(in1994) launched the “ Energy Wise” refrigerator, the first CFC
free cooler and one that was 30% more efficient than the U. S. Department of Energy’s
highest standard. For it’s innovation Whirlpool won the prestigious “ Golden Carrot”, a
$30 million award package. Unfortunately, Energy Wise’s sales languished because the
CFC-free benefit and energy saving did not off set it’s $100 to $150 price premium and
the refrigerator did not offer additional features or new styles that consumers desired.
Roper ASW’s 2002” Green Gauge Report” finds that th e top reasons consumers do not
buy green products included beliefs that they require sacrifices- inconvenience, higher
cost, lower performance- without significant environmental benefits.
The effective green marketing requires applying good marketing principles to make green
products desirable for consumers. Now the question that remains, however, is, what is the
future of green marketing? Historically green marketing has been a misunderstood
concept. Business scholars have viewed it as a fringe topic, given that environmentalism
acceptance of limits and conservation does not mesh well with marketing’s traditional
axioms of “give customers what they want” and “ sel l as much as you can.” In practice
green marketing myopia has led to ineffective products and consumers reluctance.
st
Sustainability, however, will dominate the 21 century commerce. The rising price,
growing pollution and resource consumption in Asia and political pressure to address
climate change are driving innovation toward healthier, more-efficient, high performance
products. In shorts all marketing will incorporate elements of green marketing. At the
same time to avoid green marketing myopia, the future success of product
dematerialization i.e shift from “sales of goods” t o the “sales of services”, and more
sustainable services will depend on credibly communicating and delivering consumer-
desired value in the market place. Only then, product dematerialization will steer business
on to a more sustainable path.
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References:
Prakash, A. (May2002) “ Green Marketing, public pol icy and managerial strategy”
Business Strategy and The Environment, Bus.Strat.Env.II, pg 285-297.
Ottman JA, Stafford ER, Hartman CL,(June-2006)” Avo iding Green Marketing
Myopia”, The Environment,Vol-48,No-5,pg.22-26.
Carlson, Les, Stephen Grove and Norman Kangun (1993),” A Content Analysis of
Environmental Advertising.” Journal of Advertising Vol- 22(3), pg 27-38.
rd
Saxena Rajan(2006,3 Edition), Marketing Management, New-Delhi, Tata McGraw-
Hill Publishing Co. Ltd.
st
Ottman J.A (1998, 1 Edition), Green Marketing: Opportunity for Innovation, NTC-McGraw-
Hill, 1998.
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