GREEN MARKETING - STRATEGIES AND ISSUES

Introduction Today society becomes more concerned with the natural environment; businesses have begun to modify their behavior in an attempt to address society's "new" concerns. Some businesses have been quick to accept concepts like environmental management systems and waste minimization, and have integrated environmental issues into all organizational activities. One business area where environmental issues have received a great deal of discussion in the popular and professional press is marketing. Terms like "Green Marketing" and "Environmental Marketing" appear frequently in the popular press. Many governments around the world have become so concerned about green marketing activities that they have attempted to regulate them. For example, in the United States (US) the Federal Trade Commission and the National Association of Attorneys-General have developed extensive documents examining green marketing issues.

Purpose of study

While some companies have already implemented some sort of strategies for going green, the majority of the companies have little to no plans in going green. Even fewer companies have enterprise level strategies for going green. The purpose of this report is to provoke thought about the potential destructiveness of global warming and what business can do to prevent further damage to our eco-system. This study would further focus on green strategies and green marketing and their importance for corporations. Corporations can learn from this research paper about the benefits of going green. In addition, the companies should not only take on the initiative of going green but should also take on the responsibility of educating consumers on going green or demanding for greener products. With these changes, our ecosystem and environment can maintain a healthier lifestyle. The research would address issues such as the following:

1. 2. 3. 4. 5. 6. 7. 8.

What are green strategies and enterprise-level green strategies? Ways for corporations going green How green strategies can help businesses operate more efficiently Driving forces for corporations to go green Corporations going green under different pressures The emerging green markets and green consumers How to improve green marketing How to execute green strategies

2. LITERATURE REVIEW 2.1 Green strategies "A green strategy facilitates decisions and transformation initiatives that improve the environment" (Olson, 2008). Green Strategies help individuals, corporations, and non-profit organizations change behaviors and decisions on a more responsible way--environmentally, socially and economically (Green strategies, n.d). From business point of view, a green strategy is a good way to invest in future energy alternatives for big or small companies alike. In the long run, it will reduce energy bills and help improve the environment. For companies seeking to go green, there is basically a strategy known as the "enterprise-level green strategy." An enterprise-level green strategy helps a company make decisions based on its impact to the

environment. Like any other company strategies, the enterprise-level green strategy should formulate ideas and address the question of environmental friendliness. As a company sides with going green, other benefits such as social responsibility and cost of bills will also be positively affected. Having a clear vision to go green ultimately leads a company in the right direction of making good decisions (Olson, 2008). 2.2 Go green "Practicing green is inherently proactive; it means finding ways to reduce waste and other-wise be more environmentally responsible, before being forced to do so through government regulations." Businesses could practice green by voluntarily recycling and attempting to reduce wastes and the amounts of resources they consume in their daily operations (Shi, Kane, 1996). 2.3 Green marketing Green marketing is the promotion of products or services in a way that encourage environmental safety. Consequently, green marketing encompasses a wide scope of actions some of which include product modifications, changes of product process and packaging, and advertisement modification (Guides for the use of environmental marketing claims, n.d.). Green marketing also helps to build green brands for products and helps to maintain sustainability of products along the product life cycle. 2.4 Green markets Going green has actually been a huge development in many countries. Many companies have emerged to produce green products to sell to consumers who make buying decisions based on environmental criteria. As the market grows, more companies will attempt to dip into this green market segment to become the pioneer and dominant supplier (Hartmann, Ibanez, 2006). 2.5 Green products A product is considered "green if it operates cleaner or saves money and energy" compared to its non-green counterparts (Shi, Kane, 1996). Many buyers who seek to go green are there for obvious reasons. Some of these reasons include health improvement, lowering cost of bills, and saving the environment. The best marketing strategy for getting people/companies to go green is to let the consumers be aware of the positive effect of the product to the environmental. Bringing environmental awareness can help tip the scale for those hesitating on going green (Hartmann, Ibanez, 2006). 2.6 Green consumers Public surveys given out in the United States indicate that an average consumer is willing to pay up to five percent more for greener products. The extra cost of five percent comes from green strategies such as, reducing, recycling, reusing, or redesigning of existing products (Kassaye, 2001).

Green Marketing and its importance:

Green marketing incorporates a broad range of activities, including product modification, changes to the production process, packaging changes, as well as modifying advertising. Terms like Phosphate Free, Recyclable, Refillable, Ozone Friendly, and Environmentally Friendly are some of the things consumers most often associate with green marketing Indeed the terminology used in this area has varied, it includes: Green Marketing, Environmental Marketing and Ecological Marketing.

Green marketing offers business bottom line incentives and top line growth possibilities. While modification of business or production processes may involve start-up costs, it will save money in the long term. For example the cost of installing solar energy is an investment in future energy cost savings. Companies that develop new and improved products and services with environmental impacts in mind give themselves access to new

markets, substantially increase profits and enjoy competitive advantages over those marketing nonenvironmentally responsible alternatives.

Evolution of Green Marketing.

The green marketing has evolved over a period of time. The evolution of green marketing has three phases. First phase was termed as "Ecological" green marketing, during this period all marketing activities were concerned to help environment problems and provide remedies for environmental problems. Second phase was "Environmental" green marketing and the focus shifted on clean technology that involved designing of innovative new products, which take care of pollution and waste issues. Third phase was "Sustainable" green marketing. It came into prominence in the late 1990s and early 2000. The Four Ps of Green Marketing

Green marketers concentrate on the four Ps in inventive ways.

1.

Product-

Entrepreneurs wanting to exploit emerging green markets either identifying customers environmental needs and develop products to address these needs; or developing environmentally responsible products to have less impact than competitors.

The increasingly wide variety of products on the market that support sustainable development and are good for the triple bottom line include:

v v

Products that can be recycled or reused. Efficient products, which save water, energy or gasoline, save money and reduce environmental impact. Queenslands only waterless printer, Printpoint, reduces operating costs by using less water than conventional printers and is able to pass the savings on to customers. Products with environmentally responsible packaging. McDonalds, for example, changed their packaging from polystyrene clamshells to paper. A service that rents or loans products such as toy libraries. Certified products, which meet or exceed environmentally responsible criteria.

v v v

Whatever the product or service, it is vital to ensure that products meet or exceed the quality expectations of customers and thoroughly tested.

2.

Price-

Environmental benefits are usually an added bonus but will often be the deciding factor between products of equal value and quality. Environmentally responsible products, however, are often less expensive when product life cycle costs are taken into consideration. For example fuel-efficient vehicles, water-efficient printing and non-hazardous products.

3.

Place-

The choice of where and when to make a product available has a significant impact on the customers being attracted.Very few customers go out of their way to buy green products merely for the sake of it.

Marketers looking to successfully introduce new green products should, in most cases, position them broadly in the market place so they are not just appealing to a small green niche market. The location must also be consistent with the image which a company wants to project. The location must differentiate a company from its competitors. This can be achieved by in-store promotions and visually appealing displays or using recycled materials to emphasise the environmental and other benefits.

4.

Promotion-

Smart green marketers will be able to reinforce environmental credibility by using sustainable marketing and communications tools and practices. For example, many companies in the financial industry are providing electronic statements by email, e-marketing is rapidly replacing more traditional marketing methods, and printed materials can be produced using recycled materials and efficient processes, such as waterless printing.

Driving forces for corporations to go green

Seven possible forces cited are: 1. 2. 3. 4. Consumers have been asking for green products, i.e., there has been a clear rise in demand for such products. Businesses have looked into the green process--generating corporate environmental profiles, monitoring and evaluating green performance, and improving corporate image as a result. Green products have also increased competition among businesses to generate more Eco-labeling networks that monitor and evaluate green products have been developed in many countries. These networks have done life cycle analyses to understand the impact of products. Governments have also taken several measures that have supported and facilitated such moves by the business. Green consumerism creates a balance between the expectations of consumer behaviour and business profit motives. Cost factors associated with waste disposal, or reductions in material usage forces firms to modify their behavior

5. 6. 7.

Certain points of relevance from the viewpoint of industry to be noted are: Markets don't wait for slow movers. Business that innovate and respond quickly to consumer demands survive best. Everyone has a part to play, at various levels of administration, manufacture and use. All products have an environmental impact, however small. The idea is to reduce it to the minimum.

WAYS TO PRACTICE GREEN In order to minimize negative impact on the environment, companies from different sectors are participating in being green in various ways. Some companies simply implement energy-efficient equipments while some companies change the way of their operation and manufacturing. These examples will be explained more in detail next. 3.1 Switching to energy efficient equipment Small actions taken to go green and save energy can bring big benefits for companies. An example of implementing a green strategy for a corporation is to change all office light bulbs to energy efficient light bulbs. This minor change can help the environment and bring down the cost of operation (Jennings,. 2007). While some businesses change their way of conducting business, some businesses try to change the behavior of consumers. Take the world famous Sheraton for example. Sheraton hotel in Chicago for instance has been asking all guests to use the same towels and linens for hotel stays of over one night. Unless guests indicate to have their towels and linens replaced daily, the hotels will assume that no replacement in towels and lines are necessary. According to hotel estimates, this conservation program could help reduce the usage of 1

billion

BTU

of

energy

and

2.1

million

galls

of

water

per

year

(Kassaye,

2001).

With green strategies in place, cost of operations could lower significantly. At the same time, reputation as a company going green would also build up leading to a better competitive edge. 3.2 Adopting renewable energy and cleaner technology In addition to reducing costs, going green is also a good way to invest in the future. As the energy crisis escalates over these past years, government authorities have been considering enforcing new policies which restricts the amount of carbon emissions. Many investors and companies have now been trying to develop new sources of renewable and clean technology. A great example of this new invention is the well known Toyota Prius hybrid car. Hybrid vehicles have several incentives which are attractive to people looking to purchase a car. Alongside of saving gas, the hybrid car reduces carbon dioxide emission into the atmosphere. Hybrid vehicles have been more popular for business transportation and product distribution these coming years and automobile companies have been the major force for staying competitive. 3.3 Greener the way of operation: Green packing Green packaging is defined as a way to package parts in safe way that minimizes impact to the environment. This is important because it will slow down the usage of new resources which will allow for higher sustainability with the current allocated amount of resources. Green packaging also involves recycling and reducing packing materials (Kassaye, 2001). In addition, packaging is probably the first and biggest action a company can take in practicing green (Shi, Kane, 1996). By switching to green packaging, corporations will allow their products to gain a competitive edge will at the same time improving their public image (Kassaye, 2001). Several grocery stores such as Trader's Joe, Albertsons and Ralphs have been encouraging customers to use their reusable bags for grocery shopping. Indeed, their movements have attracted public attention and brought good reputation to their business. 1) Lack of actionable information, with half of consumers who claim they, do not have the information to be personally involved in increasing their green behavior arent sure which products and packaging materials are recyclable would do more for the environment if they only knew how they have questions about the true impact of green products

2) Lack of convenient solutions to accommodate peoples increasingly busy lifestyles, with half admitting they know they should make the green lifestyle changes but are too busy 3) Cost of green products compared to traditional alternatives 4) Need to protect personal/family health is cited by an equal number of consumers (52%) as looking to personally protect the environment, as reason why they seek environmental information. Lots of blame has been placed on the American consumer for resisting the green wave. Maybe policy makers, influencers, and green marketers ought to show some more empathy towards themselves and others, and make sure they deliver on the following seven green marketing promises:

1.
2. 3.

4.
5.

6. 7.

Clear, simple how to green messages, asking people to do one thing at a time Information support structures to help people navigate the green landscape, truly designed to make their lives easier, not burden them with more More visible and clear recycling directions on product packaging Trusted sustainability standards for all products Provide green solutions that are at least as easy and convenient as traditional products and services Lower costs so that cost does not become a barrier to adoption, including creative financing solutions for higher ticket items, eg, community purchase plans Whenever possible tie in personal/family health into the environmental equation.

I would like to end by commenting on my use of the word marketing. I have noticed marketing is getting a bad rap in some of the more pure green circles. That is unfortunate. Marketing, like any powerful tools, can be used for either positive, or negative means. According to theAmerican Marketing Association, Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

The larger organization at stake is the world, and its stakeholders are all the people on the planet. The value to be created is a sustainable, healthier, greener world.

Some Problems with Going Green

Although a large number of firms are using green marketing, there are a number of potential problems which need to be addressed. One of the main problem is that firms using green marketing must ensure that their activities are not misleading to the consumers or the industry, and do not breach any of the regulations or laws dealing with environmental marketing. In short, green marketing claims of a firm must: Clearly state environmental benefits; Explain environmental characteristics; Explain how benefits are achieved; Ensure comparative differences are justified; Ensure negative factors are taken into consideration; and Only use meaningful terms and pictures.

Reacting to competitive pressures can cause all "followers" to make the same mistake as the "leader." A costly example of this was the Mobil Corporation who followed the competition and introduced "biodegradable" plastic garbage bags. While technically these bags were biodegradable, the conditions under which they were disposed did not allow biodegradation to occur. Mobil was sued by several US states for using misleading advertising claims. Thus, blindly following the competition can have costly ramifications. The push to reduce costs or increase profits may not force firms to address the important issue of environmental degradation. End-of-pipe solutions may not actually reduce the waste but rather shift it around. While this may be beneficial, it does not necessarily address the larger environmental problem, though it may minimize its short term affects. Ultimately most waste produced will enter the waste stream, therefore to be environmentally responsible organizations should attempt to minimize their waste, rather than find "appropriate" uses for it.

Conclusion
In a nutshell: Green product development is more than just creating products that are environmentally friendly, it is about systemic change in society that includes consumers, producers and the general commercial