Evolution Of Green Marketing

Published Date: 02 Nov 2017

Green Marketing is the marketing of products that are presumed to be environmentally safe. It 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.

1.1 Evolution of Green Marketing

Phase I: "Ecological" Green Marketing: focus on reducing Environmental Problems & providing Remedies.

Phase II: "Environmental" Green Marketing: focus on innovations through Clean Technology.

Phase III "Sustainable" Green Marketing: focus on preservation of Environment through Sustainable Development.

Early research suggests that ads with green claims were more effective in generating favorable brand attitudes than were ads without green claims.

1.2 Some major green marketing initiatives

Global beverages major Coca Cola is planning to become water neutral by 2012.

Japanese automakers Honda and Toyota have both recently introduced environmentally-friendly models.

BMW (Spartanburg, USA) meets 65% of its electricity needs by processing Garbage from a nearby Dump.

GE introduced Diesel locomotives in 2005 that reduced emissions by 40% as compared to the locomotives made in the previous year.

HP computers have invested heavily in Recycling of Computers & related peripherals.

NOKIA has started a campaign to recycle mobile phones.

1.3Importance of green Marketing

Firstly, there are new perceptions which are being formed or re-evaluated on issues like environmental friendly products, recycle ability, waste-reduction, the cost associated with pollution and the price value relationship of environmentalism.

In addition, green marketing is important because it helps to promote environment friendly products. Thus, it also helps to reduce the causes of global warming and other environmental problems or issues.

Furthermore, there are new perceptions which are being formed or re-evaluated on issues like environmental friendly products, recycle ability, waste-reduction, the cost associated with pollution and the price value relationship of environmentalism. As a result, organizations believe they have a moral obligation to be more socially responsible.

Moreover, governmental bodies are forcing firms to become more responsible. There are pressure from various stakeholders, government, environmentalists, NGOs, consumers which is placed on businesses, which in turn keeps them under constant and relentless watch in their daily operations. Thus, organizations perceive environmental marketing to be an opportunity that can be used to achieve its objectives.

Finally, competitors' environmental activities put pressure on firms to change their environmental marketing activities. Cost factors associated with waste disposal, or reductions in material usage forces firms to modify their behavior

1.4 Benefits of Green Marketing

Firstly, it encourages marketers to develop energy-efficient products and gives them competitive advantage and favorable image among consumers. As companies market their green-friendly efforts and products, they simultaneously encourage the green initiative. This perpetuates the efforts by other companies to operate with more green responsibility and causes consumers to remain vigilant in holding companies accountable for their actions. The employees and consumers feel proud to be associated with an environmentally responsible company

In addition, 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.

Furthermore it makes firm to charge a premium price for the green products. Consumers may become more comfortable and accepting of paying higher premium prices to acquire earth-friendly products or to support companies that engage in green activities.

Moreover, green products:

does not present a health hazard to people or animals;

is relatively efficient in its use of resources during manufacture, use, and disposal;

does not incorporate materials derived from endangered species or threatened environments;

does not contribute to excessive waste in its use or packaging;

does not rely on unnecessary use of or cruelty to animals.

Finally, it helps save money in the long run. As a result, firm can achieve higher profits and it can be used to make companies to develop innovative products.

1.5 Strategies to incorporate green practices

Adopt new technology/process or modify existing technology/process so as to reduce adverse environmental impact.

Establish a management and control system to ensure adherence to stringent environmental safety norms.

Using more environment-friendly raw materials at the production stage itself.

Exploring possibilities of recycling of the used products.

1.6 Green Marketing Mix

A model of a green marketing mix should, of course, contain all 4P’s:

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.

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

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. Prices for such products may be a little higher than conventional alternatives.

For example, Wal Mart unveiled its first recyclable cloth shopping bag.

Place

Green place is about managing logistics to cut down on transportation emissions, thereby in effect aiming at reducing the carbon footprint.

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 easier to be marketed "green" than products imported.

A second example would be 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.

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.

Examples

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 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.

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.

Consumer awareness can be created by spreading the message among consumers about the benefits of environmental-friendly products.

Additional Social Marketing "P's"

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?

1.7 Green Marketing Ambivalent

1.7.1 Survey

A survey explores factors that lead to consumers’ ambivalent attitudes about green products and buying green products. An experiment further tests the moderating influence of this ambivalence on consumer responses to green advertising that suggests the advertisers exert different levels of green efforts (low, moderate, high). A proposed model predicts that high-effort claims induce greater levels of discomfort among ambivalent participants, which encourage them to engage in motivated processing in which they discount the believability of the ad, as well as that of the green claims. As a result, evaluations of the product become more negative. The experimental findings confirm these predictions.

Public concerns about the environment keep increasing and going global. Polls in the United States, Europe, and East Asia all demonstrate a significant increase in environmental awareness throughout the 2000s. Most consumers share common concerns about environmental issues, but a lag persists between environmental concerns and green buying behaviors. This study argues that consumers may vary in their ambivalent attitudes toward green products and buying them, even if they are consistently concerned about the environment.

Ambivalent people respond differently to persuasive messages for example Armitage and Conner 2000. If consumers have conflicting attitudes toward buying green products, they also may respond differently to ads that feature different green claims, including those that involve different levels of efforts and resources expended by advertisers.

In turn, the paper adds to extant literature in three ways.

First, it demonstrates that consumers’ attitudes toward buying green products can be ambivalent

Second, it identifies the factors that account for participants’ ambivalence toward buying green products

Third, it proposes a model to explain how ambivalent attitudes toward buying green products may moderate the effectiveness of ads with green claims that involve different levels of effort by advertisers.

1.7.2 Ambivalent attitudes

Attitudes refer to a psychological tendency that is expressed by evaluating a particular entity with some degree of favor or disfavor. This view assumes that positive and negative evaluations are activated reciprocally and that the evaluation of an object can be captured by a bipolar system, ranging from very unfavorable to very favorable. However, some researchers like Kaplan and Scott suggest that positive and negative evaluations can also be independent, and a continuous bipolar scale cannot distinguish those who feel equally positive and negative toward an object from those who feel neither positive nor negative toward it

Ambivalent attitudes toward an object emerge when people sense simultaneous positive and negative evaluations.

Some consumers thus might have ambivalent attitudes toward buying green products because they maintain both positive and negative evaluations of such purchases.

1.7.3 Product-Related Determinants of Green Product Ambivalence

Perceived Higher Price

Consumers may perceive that green products are more expensive and researchers often ask consumers how much more they are willing to pay for a green product.

Public opinion surveys in the United States show that 82% of respondents express

a willingness to pay at least 5% more for green. Research among Chinese respondents indicates they are willing to pay 4.5% more for a green version of the same product. If the price premium did not concern people, the survey question such as how much more people are willing to pay for a green product would not be meaningful. Therefore, price perceptions should account for some variance in consumers’ ambivalence toward buying green products.

Perceived Lower Quality

Consumers may believe green products suffer from lower quality. For example, to measure green buying intentions, Shrum, McCarty, and Lowrey use the item "I would switch from my usual brands and buy environmentally safe cleaning products, even if I have to give up some cleaning effectiveness."

The assumption implies that green products are associated with poorer performance or quality. To the degree that consumers believe green products suffer from poor quality, they should feel more ambivalent toward buying them.

Perceived Green Product Utility

There are many ways to reduce pollution in the environment.

For example, people can take public transportation, recycle, purchase energy-saving appliances, or buy environmentally safe products. Different consumers may hold different beliefs regarding how effective green products are in reducing threats to the environment.

1.7.4 Consumer-Related Determinants of Green Product Ambivalence

Perceived Consumer Effectiveness

Perceived consumer effectiveness (PCE), first introduced by Kinnear, Taylor, and Ahmed refers to the degree to which consumers believe that their personal actions can benefit the environment.

Subsequent studies show that PCE is a significant predictor of a variety of ecologically conscious and pro-environmental consumer behaviors, such as using biodegradable and energy-saving products and engaging in recycling

It is also a significant predictor of green buying behaviors, including the purchase of sustainable products, organic food and green products.

Consumers who have low PCE therefore should have more ambivalent attitudes toward buying green products, because they do not believe they are able to make a difference.

Skepticism Toward Green Marketing

It is difficult for many consumers to assess whether a product is as pro-environmental as advertisers claim it to be. Green claims are often exaggerated or misleading, and skepticism toward green claims in marketing communications is a global phenomenon.

The degree to which consumers feel skeptical toward green claims should make them more ambivalent toward buying green products.

Perceived Emotional Benefits

Consumers associate negative affect with not protecting the environment, which enhances attitudes toward green purchase and intentions to pay more for environmentally safe products.

Hartmann and Ibanez have also identified the emotional benefits of green purchasing behaviors; people feel good about themselves when they pay more for green products.

1.8 Conclusion

In order to ensure continued existence of human race on this planet, the marketers as well as consumers will have to assume a more responsible attitude towards the natural forces that support life on earth. It is time for manufacturers and marketers to become more responsible and accountable for their actions and devise ways to ensure sustainable growth.

Businesses looking to build authentic, sustainable brands will start to ask the many questions outlined on the checklists provided throughout this book; businesses that are already leading the way will use those questions to refine their offerings and make their brands even more credible and relevant.

Corporate Social Responsibility

CSR is viewed as a comprehensive set of policies, practices and programs that are integrated into business operations, supply chains, and decision-making processes throughout the company wherever the company does business and includes responsibility for current and past actions as well as future impacts.

CSR goes beyond charity and requires that a responsible company take into full account of the impact on all stakeholders and on the environment when making decisions. This requires them to balance the needs of all stake holders with their need to make a profit and reward their shareholders adequately.

Corporate social responsibility (CSR) activities have the potential to create stronger relationships between firms and stakeholders.

CSR involves:

Conducting business in an ethical way and in the interests of the wider community

Responding positively to emerging societal priorities and expectations

A willingness to act ahead of regulatory confrontation

Balancing shareholder interests against the interests of the wider community

Being a good citizen in the community

Marketing researchers provide tremendous value toward understanding of the CSR financial performance relationship, examining outcomes such as:

increased loyalty

willingness to pay premium prices

and decreased attributions of blame in the face of a crisis

Results from analysis suggest that different types of CSR have different effects on firm value. For example, studies that use CSR activities in the form of donations to charity are more highly correlated with financial performance than other CSR activities such as environmental performance

CSR in Mauritius

The Government of Mauritius has established a policy with the overall objective of mandating registered companies to pay 2% of their book profit towards programmes that contribute to the social and environmental development of the country.

Specific objectives of this fund are to:

Encourage companies to manage their own programmes, impacting the intersection of economic with social and environmental development

Facilitate the contribution of companies to support existing Approved National Programmes implemented by Companies, national agencies or NGOs

Promote a functional community on NGOs with complementary work plans that are relevant to the national development programme

2.1 Main Parts of CSR

Economic - Responsibility to earn profit for owners

Legal - Responsibility to comply with the law

Ethical - Not acting just for profit, but doing what is right, just and fair

Voluntary and philanthropic - Promoting human welfare and goodwill.

Being a good corporate citizen contributing to the community and quality of life

2.2 Importance of CSR for a business

Build company brand, reputation and public profile

Being socially responsible creates goodwill and a positive image for your brand. Trust and a good reputation are some of your company’s most valuable assets. In fact, without these, you wouldn’t even have a business. You can nurture these important assets by being socially responsible.

Corporate Social Responsibility attracts and retains staff

By attracting, retaining and engaging staff, ‘doing good’ for others reduces your recruitment costs and improves work productivity.

Customers are attracted to socially responsible companies

Branding your business as socially responsible differentiates you from your competitors. Developing innovative products that are environmentally or socially responsible adds value and gives people a good reason to buy from you.

Corporate Social Responsibility attracts investors

Investors and financiers are attracted to companies who are socially responsible. These decision-makers know this reflects good management and a positive reputation.

Corporate Social Responsibility encourages professional (and personal) growth

Your staff can develop their leadership and project management skills through a well-designed corporate social responsibility program. This may be as simple as team building exercises, encouraging your employees to form relationships with people they would not normally meet.

Cut business costs

Corporate Social Responsibility helps to cut your business costs. Environmental initiatives such as recycling and conserving energy increase in-house efficiency and cut costs. Introducing a corporate social responsibility program gives you a good reason to examine and improve on your spending.

Note:

Marketing managers within different firms will see some social issues as more relevant than others. The relevance of a given social issue is determined by the company’s products, promotional efforts, and pricing and distribution policies but also by its philosophy of social responsibility.

2.3 Ethical Conflict faced by the Marketers

Marketers must be aware of ethical standards and acceptable behavior.

This awareness means that marketers must recognize the viewpoints of three key players: the company, the industry, and society. Since these three groups almost always have different needs and wants, ethical conflicts are likely to arise.

Conflict of interest

Ethical conflicts in marketing arise in two contexts

When there is a difference between the needs of the three groups ( the company, the industry, and society)

Second and ethical conflict may arise when one’s personal values conflict with the organization.

Examples:

An example of the first type of conflict is the tobacco industry. Cigarettes have for many decades been a lucrative business. So, cigarette and tobacco marketing have been for companies and good for the tobacco industry. Many thousands of people around the world are employed in the tobacco industry. So, the world economy has been somewhat dependent on cigarettes and tobacco. However, cigarettes are harmful to society. There is documented proof that cigarette smoking is harmful to health. This is an ethical conflict for cigarette marketers.

False advertising

In their greed to make a profit, a marketer convinces those who may be dying from an incurable disease to buy a product that may not be a cure, but which a desperately ill person (or members of his or her family) may choose to purchase in an effort to save the dying family member suffering. Promoting and marketing such products violates rules of marketing ethics.

Environment

Another significant area of social concern is the environment. Marketing is ultimately dependent on the use of scarce resources to fulfill human needs, without harming or unnecessarily using scare resources.

Marketing managers should help to determine which products are produced, and which products are indirectly affecting the environment:

The natural resources and materials used

The amount of energy required in the production process

The residuals (e.g., waste water) that result from production

The consumption of resources and energy that is required to use products ( cars, air conditioners)

The generation of pollutants (e.g., exhaust fumes) in using products

The amount of packaging material that may have to be discarded.

2.4 Conclusion

By investing in CSR, companies are investing in sustainability and broader economic, social, and environmental goals.  CSR remains a beaming light of success for improving the role of business in society but is also an ongoing challenge to which companies must remain vigilant, especially in emerging markets.