Green marketing
Green marketing products that are presumed to be environmentally safe. It incorporates a broad range of activities, including product modification, changes to the production process, sustainable packaging, as well as modifying advertising. Yet defining green marketing is not a simple task where several meanings intersect and contradict each other; an example of this will be the existence of varying social, environmental and retail definitions attached to this term. Other similar terms used are environmental marketing and ecological marketing.
Green, environmental and eco-marketing are part of the new marketing approaches which do not just refocus, adjust or enhance existing marketing thinking and practice, but seek to challenge those approaches and provide a substantially different perspective. In more detail green, environmental and eco-marketing belong to the group of approaches which seek to address the lack of fit between marketing as it is currently practiced and the ecological and social realities of the wider marketing environment.
The legal implications of marketing claims call for caution or overstated claims can lead to regulatory or civil challenges. In the United States, the [Federal Trade Commission] provides some guidance on environmental marketing claims.This Commission is expected to do an overall review of this guidance, and the legal standards it contains, in 2011.
Corporate Social Responsibility
Green corporate marketing is closely related to corporate social responsibility. Corporate Social Responsibility and Ethics in Marketing Notion is a key task when customers begin to show interest in these topics. In the case of green marketing, this is a response to greater interest in environmental impacts, technological threats and risks, the perceived inefficiency of the political, legal, economic and ethical instruments used to prevent global change, insufficient protection of the various components of the environment, high raw material intensity, unbalanced development of populated areas, low education of the population in the field of ecology.
Green marketing, just like corporate social responsibility, is the main goal of the global concept of the Global Compact Code of Ethics, which promotes nine core business principles around the world:
Respect for the protection of fundamental human rights
Efforts to avoid their violation
Freedom of association and the right to collective bargaining
Elimination of forced labor
Abolition of child labor
Zero discrimination in employment
Promoting environmental protection
Promoting an initiative to promote responsible access to the environment
Support the development and dissemination of environmentally friendly technologies
Social responsibility seeks to shift the one-sided intention of companies to “profit only” to a wider perspective called “3P” – People, Planet, Profit.
History
The term Green Marketing came into prominence in the late 1980s and early 1990s. The proceedings of this workshop resulted in one of the first books on green marketing entitled “Ecological Marketing”.
The 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 1 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.
According to Jacquelyn Ottman, (author of “The New Rules of Green Marketing: Strategies, Tools, and Inspiration for Sustainable Branding” (Greenleaf Publishing and Berrett-Koehler Publishers, February 2011)) from an organizational standpoint, environmental considerations should be integrated into all aspects of marketing — new product development and communications and all points in between. The holistic nature of green also suggests that besides suppliers and retailers new stakeholders be enlisted, including educators, members of the community, regulators, and NGOs. Environmental issues should be balanced with primary customer needs.
The past decade has shown that harnessing consumer power to effect positive environmental change is far easier said than done. The so-called “green consumer” movements in the U.S. and other countries have struggled to reach critical mass and to remain in the forefront of shoppers’ minds. While public opinion polls taken since the late 1980s have shown consistently that a significant percentage of consumers in the U.S. and elsewhere profess a strong willingness to favor environmentally conscious products and companies, consumers’ efforts to do so in real life have remained sketchy at best. One of green marketing’s challenges is the lack of standards or public consensus about what constitutes “green,” according to Joel Makower, a writer on green marketing. In essence, there is no definition of “how good is good enough” when it comes to a product or company making green marketing claims. This lack of consensus—by consumers, marketers, activists, regulators, and influential people—has slowed the growth of green products, says Makower, because companies are often reluctant to promote their green attributes, and consumers are often skeptical about claims.
Despite these challenges, green marketing has continued to gain adherents, particularly in light of growing global concern about climate change. This concern has led more companies to advertise their commitment to reduce their climate impacts, and the effect this is having on their products and services.
Greenhouse gas reduction market
The emerging greenhouse gas reduction market can potentially catalyze projects with important local environmental, economic, and quality-of-life benefits. The Kyoto Protocol’s Clean Development Mechanism (CDM), for example, enables trading between industrial and developing nations, providing a framework that can result in capital flows to environmentally beneficial development activities. Although the United States is not participating in the Kyoto Protocol, several US programs enable similar transactions on a voluntary and regulatory basis.
While international trade in greenhouse gas reductions holds substantial promise as a source of new funding for sustainable development, this market can be largely inaccessible to many smaller-scale projects, remote communities, and least developed localities. To facilitate participation and broaden the benefits, several barriers must be overcome, including: a lack of market awareness among stakeholders and prospective participants; specialized, somewhat complicated participation rules; and the need for simplified participation mechanisms for small projects, without which transaction costs can overwhelm the financial benefits of participation. If the barriers are adequately addressed, greenhouse gas trading can play an important role supporting activities that benefit people’s lives and the environment.
Popularity and effectiveness
Ongoing debate
The popularity of such marketing approach and its effectiveness is hotly debated. Supporters claim that environmental appeals are actually growing in number–the Energy Star label, for example, now appears on 11,000 different companies’ models in 38 product categories, from washing machines and light bulbs to skyscrapers and homes. However, despite the growth in the number of green products, green marketing is on the decline as the primary sales pitch for products. Shel Horowitz, a green marketer for over 30 years and primary author of Guerrilla marketing Goes Green states that to market effectively, green businesses need to market to three different audiences, “deep green,” “lazy green,” and “nongreen”, and that each must be approached differently. Each will have different trigger points that will move them to buy, and for the nongreen audience, marketing effectively usually requires emphasizing product superiority rather than care for the planet. On the other hand, Roper’s Green Gauge shows that a high percentage of consumers (42%) feel that environmental products don’t work as well as conventional ones. This is an unfortunate legacy from the 1970s when shower heads sputtered and natural detergents left clothes dingy. Given the choice, all but the greenest of customers will reach for synthetic detergents over the premium-priced, proverbial “Happy Planet” any day, including Earth Day. New reports, however show a growing trend towards green products.
Confusion
One challenge green marketers – old and new – are likely to face as green products and messages become more common is confusion in the marketplace. “Consumers do not really understand a lot about these issues, and there’s a lot of confusion out there,” says Jacquelyn Ottman(founder of J. Ottman Consulting and author of “Green Marketing: Opportunity for Innovation.”) Marketers sometimes take advantage of this confusion, and purposely make false or exaggerated “green” claims. Critics refer to this practice as “green washing”.
Greenwashing
Corporations are increasingly recognizing the benefits of green marketing, although there is often a thin line between doing so for its own benefit and for social responsibility reasons. The term “greenwashing” refers to all industries that adopt outwardly green acts with an underlying purpose to increase profits. The primary objective of greenwashing is to provide consumers with the feeling that the organization is taking the necessary steps to responsibly manage its ecological footprint. In reality, the company may be doing very little that is environmentally beneficial The term greenwashing was first used by environmentalist Jay Westerveld when objecting to hotelier’s practice of placing notices in hotel rooms which asked their guests to reuse towels to “save the environment”. Westerveld noted that there was little else to suggest that the hoteliers were interested in reducing their environmental impacts, and that their interest in washing fewer towels seemed to be motivated by a concern to save costs rather than the environment. Since then greenwashing has become a central feature of debates about marketing communications and sustainability, with “awards” for greenwashing established and numerous campaigns, law and advice developed in an attempt to reduce or curb it.
Benefit corporations
In January 2012, Patagonia became the first brand to register for benefit corporation status.
A benefit corporation is an alternative to its standard counterpart as it operates under the legal premise of 1) creating a positive impact socially and environmentally in its materials, 2) uphold corporate social responsibility in terms of considering its workers, its community, and the environment as well as challenge its current boundaries in those areas, and 3) report its activity as a company as well as its achievements in social and environmental areas publicly using a non-partisan third party source.
Statistics
According to market researcher Mintel, about 12% of the U.S. population can be identified as True Greens, consumers who seek out and regularly buy so-called green products. Another 68% can be classified as Light Greens, consumers who buy green sometimes. “What chief marketing officers are always looking for is touch points with consumers, and this is just a big, big, big touch point that’s not being served,” says Mintel Research Director David Lockwood. “All the corporate executives that we talk to are extremely convinced that being able to make some sort of strong case about the environment is going to work down to their bottom line.”
Barriers to Green Marketing
The company may be struggling with the introduction of eco-marketing with several obstacles:
Excessive exposure and lack of trust. This is the fact that many companies are involved in environmental activities. The public has thus become skeptical of their validity. Many consumers have condemned ecological claims as clever maneuvers.
Consumer behavior. There are several studies that have found that consumers are unwilling to pay more or give up something extra when buying an environmentally acceptable product. Research shows that an ecological appeal is more effective in a particular market segment.
Insufficient implementation. Companies are often unconvincing in their promotional activities. The main problem is that companies are forgotten to emphasize the value of consumers and not to connect them, what society does for the environment and how it affects individual consumers.
Adoptability
In 1989, 67 percent of Americans stated that they were willing to pay 5-10 percent more for ecologically compatible products. By 1991, environmentally conscious individuals were willing to pay between 15-20 percent more for green products. Today, more than one-third of Americans say they would pay a little extra for green products
An important challenge facing marketers is to identify which consumers are willing to pay more for environmentally friendly products. It is apparent that an enhanced knowledge of the profile of this segment of consumers would be extremely useful.
Everett Rogers, communication scholar and author of “Diffusion of Innovations”, claims that the following five factors can help determine whether a new idea will be adopted or not, including the idealism of the shift towards “green”:
Relative advantage: is the degree to which the new behavior is believed to accrue more beneficial outcomes than current practice.
Observability: is how easy it is to witness the outcomes of the new behavior.
Trialability: is the ease with which the new behavior can be tested by an individual without making a full commitment.
Compatibility: is the degree to which the new behavior is consistent with current practice.
Complexity: is how difficult the new behavior is to implement.
LOHAS
LOHAS stands for Lifestyles of Health and Sustainability, and describes an integrated, rapidly growing market for goods and services that appeal to consumers whose sense of environmental and social responsibility influences their purchase decisions. The Natural Marketing Institute’s (short: NMI) estimates the US LOHAS consumer market of products and services to be USD 209 billion – sold across all consumer segments.
The five LOHAS segments as defined by NMI include:
LOHAS: Active environmental stewards dedicated to personal and planetary health. These are the heaviest purchasers of green and socially responsible products and the early adopters who influence others heavily.
Naturalites: Motivated primarily by personal health considerations. They tend to purchase more LOHAS consumable products vs. durable items.
Drifters: While their intentions may be good, DRIFTERS follow trends when it is easy and affordable. They are currently quite engaged in green purchasing behaviours.
Conventionals: Pragmatists who embrace LOHAS behaviour when they believe they can make a difference, but are primarily focused on being very careful with their resources and doing the ‘right’ thing because it will save them money.
Unconcerned: Either unaware or unconcerned about the environment and societal issues mainly because they do not have the time or the means – these consumers are largely focused on getting by.
The green marketing mix
A model green marketing mix contains four “P’s”:
Product: A producer should offer ecological products which not only must not contaminate the environment but should protect it and even liquidate existing environmental damages.
Price: Prices for such products may be a little higher than conventional alternatives. But target groups like for example LOHAS are willing to pay extra for green products.
Place: A distribution logistics is of crucial importance; main focus is on ecological packaging. Marketing local and seasonal products e.g. vegetables from regional farms is more easy to be marketed “green” than products imported.
Promotion: A communication with the market should put stress on environmental aspects, for example that the company possesses a CP certificate or is ISO 14000 certified. This may be publicized to improve a firm’s image. Furthermore, the fact that a company spends expenditures on environmental protection should be advertised. Third, sponsoring the natural environment is also very important. And last but not least, ecological products will probably require special sales promotions.
Additional social marketing “P’s” that are used in this process are:
Publics: Effective Social Marketing knows its audience, and can appeal to multiple groups of people. “Public” is the external and internal groups involved in the program. External publics include the target audience, secondary audiences, policymakers, and gatekeepers, while the internal publics are those who are involved in some way with either approval or implementation of the program.
Partnership: Most social change issues, including “green” initiatives, are too complex for one person or group to handle. Associating with other groups and initiatives to team up strengthens the chance of efficacy.
Policy: Social marketing programs can do well in motivating individual behavior change, but that is difficult to sustain unless the environment they’re in supports that change for the long run. Often, policy change is needed, and media advocacy programs can be an effective complement to a social marketing program.
Purse Strings: How much will this strategic effort cost? Who is funding the effort?
The level of greening—strategic, quasi-strategic, or tactical—dictates what activities should be undertaken by a company. Strategic greening in one area may or may not be leveraged effectively in others. A firm could make substantial changes in production processes but opt not to leverage them by positioning itself as an environmental leader. So although strategic greening is not necessarily strategically integrated into all marketing activities, it is nevertheless strategic in the product area.
Ecolabels
An individual’s belief that an environmental claim lacks honesty can have a negative effect on attitude toward a brand. If, on the other side, the consumer grants credibility to the claim, the individual will behave more respectfully toward the environment. The problem in extending that credibility to a brand is that consumers interested in ecological products generally are skeptical of commercial advertisements. This skepticism is due to various factors such as lack of language, the absence of scientific knowledge necessary to interpret advertising meaning, and, in particular, the falsehoods and exaggeration of some advertising techniques. To resolve this problem, independent organizations may choose to guarantee messages on the environmental benefits of brands with environmental labeling systems sponsored by independent organizations. This practice tries to diminish perceived biases in environmental information by promoting standardization of the information with the aim of improving confidence in the evaluation of environmental benefits of products—all of which should positively affect the purchase intention.
The attitude of companies to green marketing
According to the survey, companies that have been the polluters are starting to look at the environment, which has a positive contribution to the whole of society. According to business executives, green communication is important in communicating with customers, and in the future, its importance will be even more important. Three of the five executives are convinced that the customer is not willing to pay for the environmentally friendly product. Nevertheless, six of them consider green marketing to be a necessity, and more than half of them consider the brand built on ecological principles to be potentially successful. It is surprising that only a quarter of companies surveyed use the label “eco” on their products, despite the fact that almost half of them perceive green marketing as an investment in their image. Green marketing has become more fashionable or pose, not primarily to improve the product,
There was also a greenwashing turnaround of practices where companies deliberately or unintentionally use deceptive and misleading claims about the ecological properties of their products that mislead the customer.
According to a survey by IKEA, CEZ and Škoda Auto, followed by Vodafone, Amway, Toyota and OZO Ostrava, among the most environmentally friendly brands.
According to other surveys, 71% of companies operating in the Czech Republic have a long-term strategy in the field of sustainable development, for 91% of respondents this is also a topical topic. In the future, it is possible to say that green marketing will continue to be of increasing importance because of growing environmental problems. In the future, however, it should not be just one component, but it should be integrated into the very essence of societies.
Life-cycle assessment
During the late 1980s, new instruments such as life-cycle assessment (LCA) were invented which allowed ecological considerations to be introduced into marketing decisions.
The life cycle assessment model seeks to identify the main types of environmental impact throughout the life cycle of a product. LCA was developed according to ISO 14040. The main goal of the LCA is to define the energy and environmental profile of the finished products. The reasons to use LCA arose from the need to have a precise process accounting and to highlight potential improvements that could be used in order to increase the environmental, energy and economic efficiency and overall effectiveness of the processes. In addition, the purpose was to quantify the environmental advantages deriving from the use of recycled raw material.
Example for LCA
LCA is used for example in the building sector. Buildings today account for the 40% of the world’s energy use. The resulting carbon emissions are substantially higher than those of the transportation sector. New buildings using more energy than necessary are being built every day, and millions of today’s inefficient buildings will remain standing until at least 2050. It’s therefore necessary to start reducing energy use in new and existing buildings in order to reduce the planet’s energy-related carbon footprint. Growing interest, space, and attention in the architecture sector are directed to environmental issues according to the principles of green building. Mineral, vegetable, or animal materials such as perlite, vermiculite, rock wool, glass wool, cork, plant fibers (cotton, flax, hemp, coconut), wood fiber, cellulose, and sheep’s wool can be used for the production of insulation panels.
Cases
Phillips’s “Marathon” CFL lightbulb
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.
Car sharing services
Car-sharing services address the longer-term solutions to consumer needs for better fuel savings and fewer traffic tie-ups and parking nightmares, to complement the environmental benefit of more open space and reduction of greenhouse gases. They may be thought of as a “time-sharing” system for cars. Consumers who drive less than 7,500 miles a year and do not need a car for work can save thousands of dollars annually by joining one of the many services springing up, including Zipcar (East Coast), I-GO Car (Chicago), and Hour Car (Twin Cities).
Electronics 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.
Products and services
Now companies are offering more eco-friendly alternatives for their customers. Recycled products for example, are one of the most popular alternatives that can benefit the environment. These benefits include sustainable forestry, clean air, energy efficiency, water conservation, and a healthy office. One example, is the E-commerce business and office supply company Shoplet which offers a web tool that allows you to replace similar items in your shopping cart with greener products.
Green Marketing in the Automotive Industry
Vehicle operation is a highly debated issue from the point of view of environmental protection. The impact on the environment is mainly due to emissions of carbon and nitrogen oxides. Efforts to regulate the negative impact of both governments and various governmental and non-governmental organizations, particularly through environmental taxes, emission standards, and the promotion of more fuel-efficient but also cheaper variants. An example of innovation in the Czech automotive industry is Škoda Auto based in Mladá Boleslav. It has developed GreenLine series, which is characterized by the ecology of operation and puts the greatest emphasis on it. A Series Green line include all of the key and most models sold by automakers, which are Skoda Superb, Skoda Octavia andŠkoda Fabia. They primarily focus on reducing fuel consumption, CO2 emissions and reducing noise from the engine and exhaust pipe.
Active components of environmental protection include automotive damage to state-of-the-art technologies, such as the Start-Stop system, which prevents the engine from running idle and can save up to 0.9l / 100km when driving around the city. Another innovation is the ability to recover the braking energy, which uses the intelligent alternator to store the generated thermal energy generated during braking and otherwise unnecessarily radiated to the surroundings. This alternator then uses the energy to reduce engine load, which leads to reduced fuel consumption and emissions. A similar effect is to achieve a gear shift recommendation technology that increases the maximum ecological driving effect by advising drivers when, at what engine speed it is best to assign a given gear.
Throughout the automotive market, we can also see the use of alternative, hybrid power units, electric motors, which not only continuously increase performance but also the driving range of the cars in which these units are used. For example, Tesla or Fisker Karma can be considered as world leaders in the use of electric motors in the automotive industry.
Introduction of the CNG in New Delhi
New Delhi, the capital of India, is polluting at an accelerated rate, until the Supreme Court of India forced a change to alternative fuels. In 2002, a directive was issued to fully adopt the CNG in all public transport systems to curb pollution.
Guerrilla Marketing
The actions of guerrilla marketing every day are more common among the different novelty advertising services. They are very visual, impactful and reach the target audience directly, hence it is a growing modality. And just as recycled materials can be used for graphic advertising, guerrilla marketing actions can also be carried out responsibly with the environment. It only consists in doing actions of this type with totally natural materials and in such a way that no waste is generated or negative impact on the ecosystem. These messages are carried out with natural non-toxic materials (water for example), do not generate any pollution, do not negatively affect the ecosystem and erase by themselves with the passage of time, turning them into a great advertising service totally ecological. Every day there are more countries and advertising agencies that are dedicated to this type of advertising services, as is the case ofGreen Proiekt in Bizkaia.
Currently some companies offer more ecologically friendly alternatives for their customers. Recycled products, for example, are one of the most popular alternatives that benefit the environment. These benefits include sustainable deforestation, clean air, energy efficiency, water conservation and a healthy office. An example is the business of electronic commerce and the company of office supplies Shoplet that offers a web tool that allows you to replace similar items in your shopping cart with greener products.
Source from Wikipedia