Om Kothari Institute of Management & Research, Kota

Green marketinga new phenomenon of marketing

MS Richa Chaturvedi,

Mr.Prashant Unnithan

]

Author’s information

Name Richa Chaturvedi

Designation -Asst professor

Institute -Om Kothari institute Of

Management & Research Kota

Mailing Address -44,adarsh colony,chopra farm, dadwara kota

Mobile -9783585616

Mail

richa31_2006@yahoo.co.in,mishrapratha@gmail.com

Co Author’s information

Name Mr.Prashant Unnithan

Designation -Asst professor

Institute -Jaipur National University

Mobile -9772058632

Mail Hello2pras@yahoo.co.in

Green marketing - a new phenomenon of Marketing

Abstract

Marketing is always considered as a consumer oriented concept, all

marketing practices always focused on providing desired satisfaction to

customer. But as we all know business world is so very dynamic no

concept no technique can be remain forever. As the changes occur in

business environment especially in term of consumer taste & preference

marketers has to change in their activities accordingly.

Growing concern of the customers about environmental issues & health

can also be considered as a drastic change in consumer’s perception.

Now consumer prefers to have those products which are healthy for their

own health as well as for the environment. Green marketing comes as a

panacea in this concern. Green marketing is concerned as a marketing of

product that is presumed to be environmentally safe. It incorporates a

broad range of activities include product modification, changes to the

production process, packaging change as well as modifying advertising.

This paper focus on identifying various factor responsible for green

marketing, it also focus on various green marketing strategies used by the

marketers, green marketing mix.

Key words:

s concept of green marketing ,Motives behind green marketing strategies,

elements of green marketing mix. Other strategies targeting,

positioning .Challenges for green marketing practices. Managerial

implications.

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 According to Polonsky

(1994)- green or environmental marketing consists of all activities,

designed to generate and facilitate any exchange indented to satisfy

human needs and wants, such that the satisfaction of these needs and

wants occur with minimum detrimental impact on the natural

environment. 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. The definition also includes

the protection of natural environment by attempting to minimize the

detrimental impact; this exchange has on the environment. This second

point is very important for human consumption by its very nature is

destructive to the natural environment. So 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.

Why Green marketing Firms may choose to green their systems, policies

and products due to economic and noneconomic pressures from their

consumers, business partners, regulators, citizen groups and other

stakeholders(non market environment).some other reasons may includes:

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.

Now day’s 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 used their

concern as a marketing tool.

Change in customer’s attitude:

With increasing concern about environment, consumers attitude towards

firms having green policies or green products are becoming motivating

factor.

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

behavior of organization towards more socially responsible one.

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 its products. Some firms have taken green-marketing as a

strategy to build up its 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 its detrimental

environmental behavior.

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 introduce green-marketing by not inculcating or lesser use

of harmful ingredients would able to reduce its operating cost to a

considerable extend.

Green Marketing Strategies

Marketing mix elements that are product, price, place & promotion are

always considered as pillars for any marketing strategies .without

considering them properly no marketing strategies can be implemented

effectively & successfully. As green marketing emerged as a new

phenomenon in marketing .to be part of marketing it can be effective

without considering it marketing mix elements or green marketing mix

elements these elements are:

  GREEN 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

.  

GREEN 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. Wall Mart

unveiled its first recyclable cloth shopping bag. IKEA started charging

consumers when they opted for plastic bags and encouraged people to

shop using its "Big Blue Bag".

GREEN 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.

GREEN 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 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.

Green Targeting

Consumers often encourage companies to start with green products, as

energy-efficient light bulbs, ecological food or ecological clothes what

cause less harm to the nature and to the health or energy saving services.

More and more consumers seek to become green and want to pay a

competitive price or even higher price for that. The target group of green

products and serviced are existing green consumers or potential green

consumers who care about green company efforts to supply with green

products to the market and to provide with added-value to consumers.

Green positioning

Strategic positioning is about building a picture of the market and the

interrelationships between the targeted customers, competitors and the

competitive advantage. The company should target a segment of the

market where it can satisfy customer needs better than its competitors,

based on the company’s distinctive strengths (Christmann, 2000).

Strategic positions can emerge from three different sources (Porter,

1995):

• Customers need

• Customer’s accessibility

• Range of a company’s products or services

Needs-based positioning focus on if the company’s strategy is about

serving most or all the needs of a particular part of its customers. Access-

based positioning focus on customers that is accessible in different ways,

which can be based on geography, how dense the customers are situated

and so forth. Variety-based positioning centre on the product or service

varieties rather than customer segments. A company can base its strategic

position on one or a combination of the three (Porter, 1995). Having

defined positioning, strategy can be identified as the creation of a unique,

valuable position, involving a different set of activities.

Challenges for going green

Green products require renewable and recyclable material, which is

costly

Requires a technology, which requires huge investment in R & D

Water treatment technology, which is too costly

Majority of the people are not aware of green products and their uses

Majority of the consumers are not willing to pay a premium for green

products

MANAGERIAL IMPLICATIONS

Green marketing subsumes greening products as well as greening firms.

Though normative concerns impact consumers’ and firms’ decision

making, economic aspects of green marketing should not be neglected.

Managers need to identify what ought to be greened: systems, processes

or products? Consumer apathy to green products is due to many factors,

including inadequate information about levels of greenness, lack of

credibility of firms’ claims and the tendency to free ride. It also seems that

green products that offer direct excludable benefits to consumers (such as

pharmaceuticals with minimum side effect and nutritious and natural

foods) would have higher acceptability. Consumer apathy may also be

attributed to the belief that individual actions alone cannot impact the

macro picture, and collective endeavors are impeded by free riding. To

tackle these market-related problems, perhaps initiatives in the nonmarket

environment may bear fruit. To curb free riding and to reassure

consumers that their actions will have macro impact, some green

marketers favor policies/regulations that lead to collective sacrifices. This

leads to another set of challenges, because environmental issues are often

highly contested in terms of their etiologies and solutions. Many such

disputes are attributable to ideological and economic factors. To some,

collective sacrifices signify intrusive big government and side-stepping

individual responsibility. Economic considerations are even more

complex. There is a rich literature in public policy on how the distribution

of benefits and costs impacts policy processes and what types of political

strategy are appropriate in different contexts (Lowie, 1964; Wilson,

1980). Actors may favor the status quo if the proposed collective sacrifice

imposes costs on them. If the benefits are diffused, policy supporters could

have

Difficulties in mobilizing winning coalitions. On the other hand, with

concentrated benefits and diffused costs, mobilizing winning coalitions to

support collective sacrifices is easier. When both benefits and costs are

concentrated or diffused, the outcomes are difficult to predict. As this

discussion suggests, the tasks of green marketers who favor collective

sacrifices as vehicles for achieving their objectives are complicated by the

politics of the nonmarket environment (Koll man and Prakash,

2001).Information provision about greenness is a key component of green

marketing. Clearly, firms should not advertise products’ environmental

benefits unless such claims can be credibly substantiated. . This paper has

identified different strategies that the company must follow in order to

face the new world challenges.

A Political Economy Model of Enviro-marketing Strategies

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-

building consumers demand for green products,

spending revenues to educate buyers,

Building new infra-structure to facilitate recycling and prevent

pollution.

Being branded a green company can be potentially beneficial to business

organizations. The green image generate a more positive public image

which can, in turn, enhance sales, increase stock price and open access to

public capital markets. It may enhance the overall perception of product

quality and when coupled with environmental benefits inherent in a

product and it’s use, may provide the added value that customer would

favor.

Key to success in green marketing

Being genuine means

a) That companies are actually doing what they claim to be doing in their

green marketing campaign

b) And that the rest of their business policies are consistent with whatever

they are doing that's environmentally friendly. Both these conditions have

to be met for their business to establish the kind of environmental

credentials that will allow a green marketing campaign to succeed.

Educating customers

Isn’t just a matter of letting people know companies are doing whatever

they are doing to protect the environment, but also a matter of letting

them know why it matters? Otherwise, for a significant portion of their

target market, it's a case of "So what?" and their green marketing

campaign goes nowhere.

Giving customers an opportunity to participate

Means personalizing the benefits of company’s environmentally friendly

actions, normally through letting the customer take part in positive

environmental action.

Some cases:

HLL (Surf-excel) some kids in Mumbai’s Bainganwadi slums are grateful

to Surf-Excel, the Rs 485cr brand which introduces 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 Samsung an amount to HLL (now HUL). The

company in turn donates that amount to an NGO that was involved in

educating underprivileged children.

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 ad spends 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 sustain and will reap huge benefits.”

Sun feast: Here another difference to note, corporate social responsibility

(CSR) is being used to build individual brands rather than the corporate

brand. A case in point is the Rs16000Cr ITC, that ran their CSR

campaign, about putting India first for its e-copal initiative two years

back. Cut to the present, the company has linked the Sun feast brand to its

social forestry campaign, where the company chips in with 25 paisa for

every pack of Sun feast biscuit and pasta sold and consumers, who buy the

Atta brand, Aashirvaad, contribute towards ITC’s rain harvesting

campaign. Divisional chief executive, ITC, Ravi Navarre says,

“Consumers like to connect with brand, if the brand is seen as a socially

responsible brand, then consumers get an emotional connect that far

beyond just usage of the brand and consuming it. It is this higher level of

connect that we are attempting to create through this campaign.”

Conclusion:

Green marketing emerged as a new panacea of marketing. now a days

when customers become cautious about their environment so it become

compulsory for companies to incorporate green marketing practices in

their strategies. Though there are many challenges in the way of green

marketing in form of consumer awareness about it, its efficiency for the

companies in terms of cost benefit .but by proper incorporation of green

marketing phenomenon in business strategies company can improve its

profitability in term of money as well as securing favorable image in

society.

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