Project Report

Green Marketing in India with reference to Uttar Pradesh

Supervisor: Dr. R.N. Singh Assistant Professor

Submitted by: Shreya Pandey Batch: 2009-12 B.B.A.

Jagran College Of Arts, Science & Commerce Saket Nagar Kanpur

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Acknowledgement

I would like to thank my teacher Dr. R. N. Singh for his guidance and support in completion of the project titled GREEN MARKETING IN INDIA WITH REFERENCE TO UTTAR PRADESH. I would also like to thank the director of my college Dr. M. P. Gupta for mentoring me in this project. I would like to thank the faculty of my college as well for their help.

Index
1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) Green Marketing... 4 Keys to successful green marketing. 8 Evolution of Green Marketing.. 9 Why Green Marketing?.................................................................................. 10 Benefits of Green Marketing . 10 Adoption of Green Marketing 10 Marketing mix of Green Marketing ...11 Ecological Marketing .14 Green/environmental Marketing 14 Green house gas reduction marketing 15 Popularity & effectiveness .16 Ongoing Debate .16 Confusion ...17 Green washing 17 Benefit Corporation ...18 Statistics ..18 Adoptability 19 LOHAS ...20 12) Eco labels 21 13) Life Cycle Assessment 22 14) Marketing Tactics of Green Marketing ...23 15) Green Marketing Cases 27 16) Green Marketing strategies ..28 17) The role of incentives & structural factors ..29 18) Information disclosure .....32 19) Managerial Implications ..35 20) Marketing a green products..38 21) Educating the consumer ..39 22) Green trade & Development 40 23) Top 10 companies that paint India green .42 Suzlon Energy ..42 ITC Limited ..43 Tata Marketing Limited 44 Tamil Nadu newsprint & papers Limited (TNPL) 44 Wipro Technologies ..45 HCL Technologies 46 Oil & Natural Gas Company (ONGC) ..........46 IndusInd Bank ...47 Idea Cellular ..48 Hero Honda Motors ..49 24) Green Marketing & Eco innovation since 1989 ...50 25) What green consumer polls should really be asking? ...51 26) Regulation of Green Marketing : The state of play in summer 2011 53 3

Green Marketing
Green marketing is a way to use the environmental benefits of a product or service to promote sales. Many consumers will choose products that do not damage the environment over less environmentally friendly products, even if they cost more. With green marketing, advertisers focus on environmental benefits to sell products such as biodegradable diapers, energy-efficient light bulbs, and environmentally safe detergents.

People buy billions of dollars worth of goods and services every yearmany which harm the environment in how they are harvested, made, or used. Environmentalists support green marketing to encourage people to use environmentally preferable alternatives, and to offer incentives to manufacturers that develop more environmentally beneficial products.

The concept of green marketing has been around at least since the first Earth Day in 1970. But the idea did not catch on until the 1980s, when rising public interest in the environment led to a demand for more green products and services. Manufacturers responded to public interest by labeling hundreds of new products "environmentally friendly"making claims that products were biodegradable, compostable, energy efficient, or the like.

In spite of its growing popularity, the green marketing movement faced serious setbacks in the late 1980s because many industries made false claims about their products and services. For instance, the environmental organization CorpWatch, which issues annually

a list of the top ten "greenwashing" companies, included BP Amoco for advertising its "Plug in the Sun" program, in which the company installed solar panels in two hundred gas stations, while continuing to aggressively lobby to drill for oil in the Arctic National Wildlife Refuge.

Without environmental labeling standards, consumers could not tell which products and services were truly beneficial. Consumers ended up paying extra for misrepresented products. The media came up with the term "greenwashing" to describe cases where organizations misrepresented themselves as environmentally responsible.

In 1992, the Federal Trade Commission (FTC) stepped in to prevent further deception. The FTC created guidelines for the use of environmental marketing claims such as "recyclable," "biodegradable," "compostable," and the like. The FTC and the U.S. Environmental Protection Agency defined "environmentally preferable products" as 5

products and services that have a lesser or reduced effect on human health and the environment when compared to other products and services that serve the same purpose. The label "environmentally preferable" considers how raw materials are acquired, produced, manufactured, packaged, distributed, reused, operated, maintained, or how the product or service is disposed.

Today, special labels help the public identify legitimate environmentally preferable products and services. Several environmental groups evaluate and certify products and services that meet FTC standardsor their own tougher standards. One popular product that has received certification is shade-grown coffee, an alternative to coffee beans that are grown on deforested land in the tropics.

During the late 1990s, green marketing received a large boost when President Bill Clinton issued executive orders directing federal offices to purchase recycled and environmentally preferable products. Some industries adopted similar policies.

Examples of environmentally-beneficial products and services:

Paper containing post-consumer wastepaper Cereals sold without excess packaging Shade-grown coffee beans Cleaning supplies that do not harm humans or environment Wood harvested from sustainable forests Energy-efficient lightbulbs Energy-efficient cars Energy from renewable sources of energy such as windmills and solar power 6

The term Green Marketing came into prominence in the late 1980s and early 1990s. The American Marketing Association (AMA) held the first workshop on "Ecological Marketing" in 1975. 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 consensusby consumers, marketers, activists, regulators, and influential peoplehas 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.

Three keys to successful green marketing:

Show potential customers that you follow green business practices and you could reap more green on your bottom line. Green Marketing isn't just a catchphrase; it's a marketing strategy that can help you get more customers and make more money. But only if you do it right. 8

For green marketing to be effective, you have to do three things; be genuine, educate your customers, and give them the opportunity to participate.

1) Being genuine means that a) that you are actually doing what you claim to be doing in your green marketing campaign and b) that the rest of your business policies are consistent with whatever you are doing that's environmentally friendly. Both these conditions have to be met for your business to establish the kind of environmental credentials that will allow a green marketing campaign to succeed.

2) Educating your customers isn't just a matter of letting people know you're doing whatever you're doing to protect the environment, but also a matter of letting them know why it matters. Otherwise, for a significant portion of your target market, it's a case of "So what?" and your green marketing campaign goes nowhere.

3) Giving your customers an opportunity to participate means personalizing the benefits of your environmentally friendly actions, normally through letting the customer take part in positive environmental action.

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, and 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.

Why Green Marketing? As resources are limited and human wants are unlimited, it is important for the marketers toutilize the resources efficiently without waste as well as to achieve the organization's objective. So green marketing is inevitable. There is growing interest among the consumers all over the world regarding protection of environment. Worldwide evidence indicates people are concerned about the environment and arechanging their behavior. As a result of this, green marketing has emerged which speaks for growing market for sustainable and socially responsible products and services. Benefits of Green Marketing: Companies that develop new and improved products and services with environment inputs inmind give themselves access to new markets, increase their profit sustainability, and enjoy acompetitive advantage over the companies which are not concerned for the environment. Adoption of Green Marketing: There are basically five reasons for which a marketer should go for the adoption of green marketing. They are -Opportunities or competitive advantage Corporate social responsibilities (CSR)Government pressure Competitive pressure Cost or profit issues

EXAMPLES OF GREEN MARKETING INDIAN CONTEXT: TATA GROUP OF COMPANIES:

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1. Tata motors ltd. is setting up an eco-friendly showroom using natural material for its flooring and energy efficient lights. The taj chain, is in the process of creating eco-rooms which have energy efficient mini bars, organic bed linen and napkins made up of recycled papers. The rooms will have CFLs or Leds. Launched a low cost water purifier made up of natural ingredients. Developing indica EV, an electric car that would run on polymer lithium ion batteries. 2. Recently launched Samsung solar mobile guru. 3. Battery operated L.G TV. 4. Introduction of C.N.G in Delhi. 5. Badarpur Thermal Power station of NTPC in Delhi is devising ways to utilize coal-ash thathas been a major source of air and water pollution. 6. Barauni refinery of IOC is taken steps for restricting air and water pollutants.

Marketing Mix Of Green Marketing:

When companies come up with new innovations like eco friendly products, they can access new markets, enhance their market shares, and increase profits. Just as we have 4Ps product prices, place and promotion in marketing, we have 4ps in green marketing too, but they are a bit different. They are buttressed by three additional Ps, namely people, planet and profits.

1. A.

GREEN PRODUCT:

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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.

B. 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. Wal 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".

C. 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 12

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.

D. 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.

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Consumer awareness can be created by spreading the message among consumers about the benefits of environmental-friendly products. Positing of profiles related to green marketing on social networks creates awareness within and across online peer groups. Marketing can also directly target the consumers through advertisements for product such as energy saving compact fluorescent lamps, the battery powered Reva car, etc.

Ecological Marketing:

Ecological marketing was based on the idea that environmental protection and resource conservation can be better advanced through less regulation by the public sector and more enterprise in the private sector. This idea, in turn, is based on the premise that the ecologically concerned consumer is a legitimate but largely unused market segment one that is identifiable, accessible and measurable. In the 1970s the importances of a small number of environmental issues like oil use or pollution for a narrow range of industries (for example cars and chemicals) was framed as something that was relevant to engineers, lawyers and marketers within companies.

Originally proposed at the American Marketing Association first conference on ecological marketing in 1975, the idea was compatible with the antiregulatory mood of these days in the U.S. It found support at the 1979 conference, who felt that government and business should strike a better balance in the division of responsibility for the management of negative social externalities.

Green/ environmental marketing

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Unfortunately, a majority of people believe that ecological (green) marketing refers solely to the promotion or advertising of products with environmental characteristics. Terms like Phosphate Free, Recyclable, Refillable, Ozone Friendly, and Environmentally Friendly are some of the things consumers most often associate with green marketing. While these terms are green marketing claims, in general green marketing is a much broader concept, one that can be applied to consumer goods, industrial goods and even services. Thus, green marketing incorporates a broad range of activities, including product modification, changes of the production process, packaging changes, as well as modifying advertising. Green marketing came into prominence in the late 1980s and early 1990s, it was first discussed much earlier. The American Marketing Association (short: AMA) held the first workshop on Ecological Marketing in 1975. The proceedings of this workshop resulted in one of the first books on green marketing entitled Ecological Marketing. According to Dainora Grundey and Rodica Milena Zaharia Green or Environmental Marketing 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 harmful impact on the natural environment .

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 Protocols 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 15

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 peoples 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 numberthe 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 16

decline as the primary sales pitch for products. (NEEDS CITATION) On the other hand, Ropers Green Gauge shows that a high percentage of consumers (42%) feel that environmental products dont 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 17

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 advices developed in an attempt to reduce or curb it.

Benefit Corporations:

In January of 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 18

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."

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:

1. Relative advantage: is the degree to which the new behavior is believed to accrue more beneficial outcomes than current practice. 2. Observability: is how easy it is to witness the outcomes of the new behavior.

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3. Trialability: is the ease with which the new behavior can be tested by an individual without making a full commitment. 4. Compatibility: is the degree to which the new behavior is consistent with current practice. 5. 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 Institutes (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 adapters who influence others heavily.

Naturalites: Motivated primarily by personal health considerations. They tend to purchase more LOHAS consumable products vs. durable items.

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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.

Eco Labels
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 21

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 productsall of which should positively affect the purchase intention.[

Life Cycle Assessment

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During the late 1980s, new instruments such as life cycle assessment (short: 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 worlds 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. Its 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. 23

Marketing Tactics of Green: Green marketing now involves a diverse range of issues that have evolved since its initial conception in the early 1970s. Extensive information is available on such strategic activities and tactics, including targeting, pricing, design, positioning, logistics, marketing waste, promotion, and green alliances. Targeting:

Consumers often encourage firms to develop green products, such as dolphin-free tuna or energy efficient light bulbs. Substantial numbers of consumers claim to be green, but it is unclear to what extent they are willing to purchase goods based solely on environmental grounds. They may expect green goods to be competitively priced and perform the same as others, thus using a products greenness to differentiate two relatively equal goods. When the Kyocera Ecosys laser printer was first introduced, it was promoted as a green printer (Polonsky & Rosenberger, 2001). Green Design/New Product Development (NPD):

70 percent of a products environmental harm is designed into the product and the associated production processes. So firms need to incorporate environmental attributes into products and processes at the initial stages of new product development (NPD) along with other issues, such as quality. They can then use life-cycle analysis to evaluate a products ecological impact for each production stage. Green Positioning:

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Green positioning is a question that needs to be asked early in an organizations development. In other words, what are the underlying environmental values and behaviors of the firm and its products? Truly green marketers demonstrate strategic greening by ensuring that all activities and behaviors thoroughly incorporate environmental values into decision-making processes. Environmental criteria should be considered as important as financial criteria. Such firms are rare, although several do attempt to adopt such a position, such as The Body Shop and Blackmores (Getzner & Grabner-Krauter, 2004).

Green Pricing:

While green products are often priced higher than traditional goods, this does not always mean they cost more, especially when one considers all associated costs. Often, green goods have higher initial out-of-pocket expenses but lower long-term costs (Rubik &Frankl, 2005). Greening Logistics:

Distribution is a typical concern, and one of the first functions targeted to minimize environmental costs. Firms have sought to reduce raw material use by modifying packaging, which can directly and indirectly lower distribution costs as well. Marketing Waste:

Although closely related, marketing waste nevertheless differs from reverse logistics. Firms might have products that they cannot reprocess, or materials that are not traditionally seen as having value. This view must change, because waste is a product of company activities and, like all products made, can add value. At the most basic level, firms can develop internal processes that seek to either reduce 25

waste, which improves efficiency, or reprocess their own waste for internal use, thus reducing the use of other inputs. Green Promotion:

One of the most difficult questions to address is: What environmental information should be communicated and how should it be communicated? A primary issue is that there must be something worthwhile to talk about. A good deal of environmental promotion has been labeled green wash, having little if any real ecological meaning. This type of superficial tactical greening is no longer appropriate and both consumers and regulators are unwilling to accept it. Communicating substantive environmental information is a more appropriate approach to take, but requires real activity changes to be meaningful. Green Alliances:

It may not be clear whether a firm has all the necessary expertise to implement complex green marketing tactics and strategies.

Therefore, as seen in the extensive green alliance research, environmental groups can be a valuable source in helping the firm understand the issues, develop appropriate solutions,

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and implement associated strategies and tactics. In short, green alliance partners can assist firms in implementing the activities we have discussed. Table (2) presents a number of examples to illustrate how tactical, quasi-strategic, and strategic green marketing activities might be under-taken in each of the functional marketing areas. Tactical actions typically involve limited change and limited coordination across multiple functions. Quasistrategic actions normally require more substantive changes in marketing activities, as well as broad based Coordination among several non marketing activities. Strategic greening requires a holistic approach, with all actions of the firm coordinated to integrate environmental issues across all functional areas.

Green marketing cases:

1. 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.

2. 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 27

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), Flex Car (Washington State), and Hour Car (Twin Cities).

3. 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.

4. Products & 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.

5. Introduction of CNG in Delhi:

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New Delhi, capital of India, was being polluted at a very fast pace until Supreme Court of India forced a change to alternative fuels. In 2002, a directive was issued to completely adopt CNG in all public transport systems to curb pollution.

GREEN MARKETING STRATEGIES: Marketing literature on greening products/ firms builds on both the societal and social marketing research. Societal marketing implies that organizations (governments, businesses and nonprofits) need to determine the needs of target markets and to deliver the desired satisfactions in a way that enhances the consumers and the societys well being. Social marketing focuses on designing and implementing programs that increase the acceptability of a social idea, cause, or practice in (a) target group(s) (Kotler, 1994). Traditionally, marketers focus on individual needs for designing/marketing products to best serve these needs. This approach is predicated on two assumptions. First, individuals are motivated by the promise that products will satisfy their needs at outlays acceptable to them. Second, individual actions do not have significant externalities (the divergence between public and private costs/benefits), positive or negative. The presence of externalities often instigates actions from the nonmarket environment, mainly in the form of governmental regulations. Unlike traditional marketers, social and societal marketers seek to persuade consumers to alter their behaviors that have significant externalities. However, these behavioral modifications may not directly/sufficiently benefit consumers or the benefits may also be nonexcludable. In addition, social marketing literature suggests that consumers incentives may be eroded if they believe that their actions alone may not enhance the communitys welfare (Weiner and Doescher, 1991). Thus, the challenges for social/societal marketers are complex. Three such challenges the role of incentives and structural factors, information 29

disclosure strategies and greening products versus greening firms are examined below. The role of incentives and structural factors: Drawing insights from the political economy literature discussed previously, marketing literature debates the relative efficacy of individual-level sacrifices (direct costs) versus collective sacrifices (indirect costs). Instead of individual-level sacrifices (paying a premium for green products or altering life styles to lessen the burden on the environment), from which consumers can opt out, some social marketers favor collective sacrifices or indirect costs, from which individuals cannot opt out (Weiner, 1993). It is predicted that by providing new institutional contexts, such collective sacrifices will persuade consumers to change their lifestyles. If the objective is to reduce emissions of greenhouse gases, collective sacrifices could be manifest as higher taxes (energy tax), stringent standards (residential building codes, automobile fuel efficiency standards) or some other collective restrictions that impose costs on or potentially change lifestyles of many people. In addition to mitigating collective action dilemmas, collective sacrifices provide consumers with greater levels of confidence that their actions will make a difference. One must note, however, that opting out from individual-level sacrifices may not be the only way for consumers to express their preferences. As the public policy literature suggests, individuals signal their preferences for a policy through exit, voice, and loyalty (Hirschman, 1970). If they cannot exit due to the imposition of collective sacrifices, consumers may seek to voice their preferences in the nonmarket arenas (see the previous discussion on stakeholder and institutional theories). They could, for example, undertake political activity to shift the burden of sacrifices to firms. In some cases, they may even oppose the imposition of collective sacrifices (Vogel, 1996).

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Marketing literature also examines the relative salience of consumers attributes and structural parameters (market environment, social norms and institutions) in inducing environment-friendly behavior. There is also a debate on the relative efficacy of economic and noneconomic factors in inducing behavioral changes. In their review of the literature on recycling, Derksen and Gartrell (1993) argue that demographic variables show little association with recycling behavior and the social context is the key determinant: people having access to recycling programs exhibit higher levels of recycling than those not having such access. Individuals attitudes towards recycling cannot overcome structural barriers; attitudes impact behaviors only if individuals have easy access to recycling programs (De Young, 198889). This, however, begs the question:

why do only some communities have recycling programs? If public policies reflect (at least, partially) citizens preferences, then citizens have some degree of influence over policies such as recycling programs. Thus, structures (public policies) are not entirely exogenous to consumers/citizens. As the reader will note, the politics of public policy processes enters our discussion on green marketing. In examining the role of financial incentives in inducing consumers to support green products, energy policy literature offers useful insights. Much of the research on energy conservation dates back to the 1970s, when energy shortages emerged as a major business strategy and public policy issue in the wake of 1973 and 1979 oil crises. This literature seeks to understand how much energy consumers use, how they use it and how they can be motivated to conserve energy (Ritchie and McDougall, 1985). These questions can be generalized to other aspects of green marketing. While 31

some suggest that consumers are motivated to conserve energy primarily due to economic incentives/disincentives (McClelland and Canter, 1981; OBrien and Zoumbaris, 1993), others emphasize noneconomic factors (Black et al.,1985; Kempton et al., 1992). The impact of economic incentives/disincentives varies across income brackets. For upper income levels, energy use is relatively price inelastic (economic incentives/disincentives are less efficacious) because they spend only a small percentage of their income on energy. Savings offered by energy-efficient appliances also may not motivate them to replace their extant well functioning, but energy-inefficient, appliances. Even when consumers are motivated to conserve energy, they may not replace appliances or change their behaviors due to inconvenience and/or inertia. A similar point about green attitudes not translating into green behaviors was made in the introduction to this paper. Analogously, green marketing can be

conceptualized as a three-pronged exercise. Consumers can be motivated to curtail (reduce the impact on the environment by modifying extant living patterns), to maintain (keep equipment in good working order) and to be efficient (undertake structural changes such as buying environment-friendly equipment). Marketers need to correctly identify consumers propensities for the three routes at different value/price levels and accordingly design/market their products. Information disclosures: Green marketing could be viewed as a subset of information disclosure strategies available to both managers and policymakers. Such disclosures can take place at the industry level (industry codes), firm level (annual environmental reports), the facility level (TRI program) and/or the product level (labels). Information disclosures could be

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voluntary (perhaps in response to market and/or nonmarket pressures) and/or required by law. Mandatory disclosures seek to ensure that adequate and standardized information is available to stakeholders/consumers, who then have the opportunities to compare the levels and the quality of greenness across products/firms. Firms could seek to increase the credibility of disclosed information through internal, second-party or third-party audits. Thus, firms often have choices regarding what to disclose8, how to disclose and how to improve the informations credibility. Consumers require information to make informed choices. A lack of information could inhibit or discourage them from incorporating green attributes in their purchase decisions. Information also needs to be comprehensible. If consumers do not adequately understand firms claims, they may over-react or under react to the greenness of products/firms. Although consumers may not have access to such information or understand its implications (Menell, 1995), the media and the various external stakeholders often widely disseminate information and interpret its implications, thereby putting pressure on firms to reduce pollution and to adopt green policies. Thus, firms should evaluate whether to support/oppose stakeholders that are simplifying and conveying information about the greenness of their policies/products. If the targeted consumers view greenness as motivating variables, firms should develop alliances with stakeholders for wider dissemination of information. Having decided to provide comprehensible information, firms face yet another challenge: consumers must perceive information as being credible. As a reference, many view

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industry as the least reliable source of information on environmental issues (Ottman, 1992; Stisser, 1994). An alarming 47% of consumers dismiss environmental claims as gimmicks (Fierman,1991). Some scholars already detect a consumer backlash to environmental marketing due to false, unsubstantiated or exaggerated claims (Carlson et al., 1993). Further, as the number of environmental claims proliferates, the levels of consumer skepticism seem to increase (Ellen et al., 1991). This is alarming news for firms who can gain competitive advantages by being greener than competitors. To add to firms woes, some environmental groups closely examine firms claims. Greenpeace (1994), for example, issues reports identifying companies that make false or exaggerated environmental claims. The federal and state governments also regulate what claims are permissible and have sanctioned many firms (Brown and Wahlers, 1998). In this context, eco-labels can serve as useful vehicles for green marketing. At least 25 countries have government-sponsored, thirdparty ecolabeling programs. Prominent ones include Germanys Blue Angel, Japans Eco-Mark, Scandinavias Nordic Label and the United States Green Seal and Scientific Certification Systems. However, the usefulness of eco-labels versus other information disclosure strategies is questioned. Menell (1995) argues that if governmental regulations can force firms to internalize most environmental externalities, then the price mechanism is a more institutionally sound mechanism for information provision than eco-labeling on three grounds: comprehensibility (consumers can understand price information more easily), universality (enables consumers to compare across a broad range of alternatives) and prioritization (better enables consumers to prioritize environmental attributes over other attributes) (for an opposing view, see Peattie, 1999). 34

Greening products versus greening firms: This paper has discussed whether and how information on greenness impacts consumer decision making. This assumes that consumers purchase products primarily based on products attributes. However, in some other cases, firm-level attributes (greenness of processes and systems) may be important for developing promotional strategies. Perhaps consumers want green products from green firms. From a managerial perspective, if brand attributes are more salient, firms should invest in greening products, but if corporate images are more important, focusing on firm-level processes/systems is desirable. Consumer goods companies, such as General Mills, Unilever, and Procter and Gamble, focus their communication on their brands and the benefits they deliver. This paper is not arguing that such brand-focused firms ignore their corporate image. They do not. However, such firms focus their communication on highlighting brand attributes and how these attributes satisfy consumer needs. The advertising of Procter and Gamble highlights the superior cleaning performance of Tide, the freshness of Ivory soap or the beauty enhancing effect of Oil of Olay. Most consumers probably do not link these brands to Procter and Gamble. Hence, for firms that focus on communicating brand attributes, product greening is the desirable strategy. This enables them to leverage their brand names, linking the products green attributes to consumer needs. Firms focusing on corporate advertising or having generic brand names across products(such as Sony) have incentives to green their processes/systems (firmlevel greening) and to communicate their corporate commitment to environmental stewardship. This enables them to tap into economies of scale in advertising.

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Of course, a reliance on corporate advertising would require an integrated organizational approach to greening processes/systems as well. Firm- and product-level greening, however, are not mutually exclusive. Most firms perhaps invest in both. Nevertheless, in terms of their relative salience, a distinction between brand-focused and firm-focused greening strategies is important9. In summary, this section has identified key challenges for green marketers. These involve what to green (product versus processes/systems), the pros and cons of imposing individual versus collective sacrifices on consumers, the role of economic and noneconomic factors in influencing consumer behavior and what kinds of information disclosure strategy to adopt. 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 36

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 (Lowi, 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 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. Negative press reports on false or exaggerated claims often lead to decreased sales (Polonsky, 1995). Firms can also form strategic alliances, including product endorsements and corporate sponsorships from environmental groups that provide credibility to their environmental claims (Mendleson and Polonsky, 1995). Further, firms willing to provide clear, comprehensive and credible information must ensure that consumers have low-cost access to it. Again, governmental policies and stakeholder initiatives can be important in reducing consumers search, information or 37

transaction costs. Regulators can publish it (for example in the Federal Register), disseminate it to the media by press releases and post it on the Internet (see the citations on FTC and EPA websites). Stakeholders can also use the media as well as use their organization-specific vehicles such as newsletters. Finally, if managers believe that consumers view greenness as a motivating variable, they should invest in conveying information through advertising, direct mailing, brand labels, in-store displays and pamphlets. Our understanding of green marketing is still in its infancy, perhaps due to the multidisciplinary nature of the enterprise. Marketing scholars focus on a host of business strategy and public policy issues, including eco-labels and market segmentation, and the role of structural factors and economic incentives in influencing consumer behavior. For environmental economists, green marketing signifies a broader trend in the evolution of environmental policies that focus on information disclosure. Institutional theory, stakeholder theory and the corporate social performance perspective view green marketing as a subset of corporate policies designed to gain external legitimacy. These have developed in response to the expectations of a broad spectrum of stakeholders, both internal and external. Political economists focus on collective action dilemmas inherent in green marketing at the consumer and producer levels. This paper has identified key ideas in relation to promoting green products that may be most relevant to both scholars and practitioners of green marketing. Marketing a Green Product:

There's no doubt the green niche can be lucrative. Environmentally aware consumers tend to earn more and be willing to pay more for green products, such as organic produce and hybrid cars. The problem, however, is that only a very small percentage of consumers 38

make their buying decisions primarily based on the environmental qualities of a product, says Edwin R. Stafford, an associate professor of marketing at Utah State University's college of business. Depending on what your product is, it may very well be difficult to sustain sufficient sales within that niche alone.

Stafford and his colleagues, Cathy Hartman and Jacquelyn Ottman, have done research on green marketing through a U.S. Department of Energy-sponsored research program called "Renewable Energy for Rural Economic Development (RERED). "They've found that positioning green products on their inherent mainstream benefits can broaden their consumer appeal and enhance their likelihood for market success.

"While consumers say in surveys that environmentalism impacts their product choices, a variety of factors typically can impede green purchasing behavior, ranging from their immediate availability to price to convenience to perceived green product effectiveness," Stafford says. "A number of personal motivations and external factors impact green purchasing behavior, and targeting the elusive 'green consumer' can be challenging.

Educating the Consumer

Fortunately, he says, there is great opportunity for marketing green products to the masses, and there are many examples of green products that have gone mainstream due to their practical consumer benefits, including front-loading, energy-efficient washing machines and other appliances, organic foods and heat-reflective windows. "What we see is that the success behind many green products is not their 'greenness,' but the practical value they provide consumers," Stafford says. 39

Sometimes practical consumer value may not be readily apparent in a green product, however, and that's where education will need to play an important role in your marketing efforts. Make sure that you bundle "consumer value" into the marketing messages for your green product.

"One of my favorites is the slogan, 'Long life for hard-to-reach places,' for General Electric's (GE) energy-efficiency CFL flood lights," Stafford says. "That communicates how a CFL's five-year life can be very convenient. The goal of green marketing communications should be to educate consumers that green provides practical consumer value."

Another place where you can take a cue is from the construction industry. Originally, mainstream consumers worried that green buildings would include inferior building materials, leading to decreased longevity. "Mention 'green building' to a traditional home buyer, and the image of Gilligan's Island and bamboo huts comes to mind," Stafford says. "The reality is, however, that green buildings are increasingly cleverly designed, often technically innovative structures that are super energy/resource-efficient, and work in harmony with the seasons. The construction industry has increasingly adopted the term 'high-performance building' to reframe 'green' away from any potential negative connotations."

Green Marketing Examples:

Green marketing definition: Green marketing is the marketing of products that are presumed to be environmentally safe. (Green Trade & Development)

Green Trade & Development: 40

Used for years in local and regional pollution control programs in the United States, market approaches are now recognized for their ability to provide cost savings and flexibility to companies and countries committed to greenhouse gas control. Green Markets believes that well-crafted rules and oversight are needed to assure that pollution trading does not compromise environmental objectives. With greenhouse gas trading, though, we also believe that the benefits can go well beyond compliance flexibility and economic efficiency.

The greenhouse gas reduction market can potentially catalyze projects with important local environmental, economic, and quality-of-life benefits. The Kyoto Protocols 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

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addressed, greenhouse gas trading can play an important role supporting activities that benefit peoples lives and the environment.

So what are some green market examples?

You can break down the green marketing examples into three categories: examples of green marketing products, green marketing companies, and green marketing strategies. My particular expertise is more on marketing green products to wide variety of people and organizations. As is stated in the green marketing definition pretty much branding products like these examples of green products L.O.C.(Legacy of Clean) and Nutrilite(organic health supplements). Most of the green marketing examples you will find use a combination of government and third party standards like environmentally preferable products (EPP) program, Fair Trade, Energy Star and so on. There is a substantial financial gain for those that are affiliated with green marketing companies. Marketing green products is becoming easier with all the people out there that want to save the planet earth. Through the green marketing example I am fortunate enough to be involved with I have also been able to accomplish one of my goals, which is I want to help people. There are a lot of green marketing ideas out there and some are very good ideas, but I have found most are not up to the standards I have found with these green marketing companies that I have been working with these past 4 years. Green marketing strategies are ever evolving and there are new green products for marketing. If you have ever been interested in marketing green products feel free to fill out the contact form below and I will get back to you as soon as possible.

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Top 10 Companies that Paint India Green

Judging by the number of large, small and mid-size Indian companies that are setting the trend with green initiatives, India is serious about building environmental sustainability into her business practices. The following companies who made it to the list of top 10 green Indian companies prove the statistics right!

Suzlon Energy: The worlds fourth largest wind-turbine maker is among the greenest and best Indian companies in India. Tulsi Tanti, the visionary behind Suzlon, convinced the world that wind is the energy of the future and built his factory in Pondicherry to run entirely on wind power. Suzlons corporate building is the most energy-efficient building ever built in India.

ITC Limited: 43

ITC strengthened their commitment to green technologies by introducing ozone-treated elemental chlorine free bleaching technology for the first time in India. The result is an entire new range of top green products and solutions: the environmentally friendly multi-purpose paper that is less polluting than its traditional counterpart.

Tata Metaliks Limited (TML):

Every day is Environment Day at TML, one of the top green firms in India. A practical example that made everyone sit up and take notice is the companys policy to discourage working on Saturdays at the corporate office. Lights are also switched off during the day with the entire office depending on sunlight.

Tamil

Nadu

Newsprint

and

Papers

Limited

(TNPL):

Adjudged the best performer in the 2009-2010 Green Business Survey, TNPL was awarded the Green Business Leadership Award in the Pulp and Paper Sector. The initiatives undertaken by this top green firm in India includes two Clean Development 44

Mechanism projects and a wind farm project that helped generate 2,30,323 Carbon Emission Reductions earning Rs. 17.40 Crore.

Wipro Technologies:

The list of top 10 green Indian companies is never complete without Wipro which climbed to the top five brand league in Greenpeace's 'Guide to Greener Electronics' ranking. Despite the global financial crisis, Wipro held fast to its commitment towards energy efficiency and was lauded for launching energy star compliant products in the market.

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HCL Technologies:

This IT major may be considered as the icon of Indian green initiatives, thanks to the go green steps taken in solving the problem of toxics and e-waste in the electronics industry. HCL is committed to phasing out the hazardous vinyl plastic and Brominated Flame Retardants from its products and has called for a Restriction on Hazardous Substances (RoHS) legislation in India.

Oil and Natural Gas Company (ONGC):

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Indias largest oil producer, ONGC, is all set to lead the list of top 10 green Indian companies with energy-efficient, green crematoriums that will soon replace the traditional wooden pyre across the country. ONGCs Mokshada Green Cremation initiative will save 60 to 70% of wood and a fourth of the burning time per cremation.

IndusInd Bank:

Green banking has been catching up as among the top Indian green initiatives ever since IndusInd opened the countrys first solar-powered ATM and pioneered an ecosavvy change in the Indian banking sector. The bank is planning for more such initiatives in addressing the challenges of climate change.

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IDEA Cellular: One of the best Indian companies, IDEA, paints India green with its national Use Mobile, Save Paper campaign. The company had organized Green Pledge campaigns at Indian cities where thousands came forward and pledged to save paper and trees. IDEA has also set up bus shelters with potted plants and tendril climbers to convey the green message.

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Hero Honda Motors:

Hero Honda is one of the largest two-wheeler manufacturers in India and an equally responsible top green firm in India. The companys philosophy of continuous innovation in green products and solutions has played a key role in striking the right balance between business, mankind and nature.

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Green Marketing and Eco Innovation Since 1989.

Can Product-Sharing Sustain the Earth AND the Economy?

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Good green marketers push the innovation of different products. Better products. But can we profit from making fewer products in the first place? Swap Dont Shop, the most recent of the Columbia Business School Alumni Clubs Making Green from Green events, explored this very dilemma.

The panel began with a sobering point; Moderator Cameron Tonkinwise of the Parsons School of Design Strategies reminded his audience of green business advocates that for all the sustainable sourcing, the holistic manufacturing.

What Green Consumer Polls Should Really Be Asking

Ever since the resurgence of environmentalism in 1990, consumer polls have attempted to measure awareness, attitudes and behaviors towards environmental issues and products. Poll after poll has found that consumers claim to be concerned about the issues,

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they report high levels of green product purchase, and even claim willingness to pay a premium for greener products and packages.

Shop Til You Dropbut on Earth Day?

This year seemed to produce a bumper crop of Earth Day promotions and a lot of accompanying media backlash. Stories written by Marc Gunther, Matt Wheeland, and a NYTimes piece by Elisabeth Rosenthal are three I saw and Im sure you saw more yourself.

The media are making Earth Day marketers look like the moneychangers in the temple. Why is this happening? What can we do about it?

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Regulation of Green Marketing: The State of Play in Summer 2011

In early October last year, the Federal Trade Commission (FTC) released a long-awaited draft of its Guides for the Use of Environmental Marketing Claims (the Green Guides), which provide guidance for companies making environmental claims about their products and services. The draft Guides proposed to significantly tighten the standards for a range of environmental claims, such as green, eco-friendly, biodegradable and recyclable. Although the comment period on the proposal ended ten months ago, the FTC has yet to release the final Guides. Agency officials speaking at various conferences have admitted that the roughly 300 sets of comments they have received on the proposal have included some significant issues that the Commission must address before issuing the final document.

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In the meantime, the FTC has assured it will continue to monitor advertising claims in furtherance of its duty to police false claims under Section 5 of the FTC Act, and will bring enforcement regardless of the state of the Guides. This has been only partially true, however, as the Commissions enforcement appears to have been ad hoc this year its most notable activities having been to rein in false claims about bamboo textiles and an obviously fraudulent green certification scheme. Otherwise, the Commission has been strangely silent thus far. There have been no cases brought, for example, regarding ubiquitous carbon neutral or eco-friendly claims. Against the sprawling landscape of green marketing, the FTC remains a lurking tiger. Whats Next for the FTC?

It is important to note that the forthcoming Guides, however significant they may seem, are designed to set forth FTCs views regarding whether specific green marketing claims are deceptive or unfair under the FTC Act. The Guides do not have the force of law, and the FTC maintains the position that they could bring enforcement today on any subject covered by the draft Guides under its general statutory authority. This is undoubtedly true in theory, but in practice, the Commission is likely loathe to forge new ground in litigation that may paint its enforcement as an abrupt departure from a settled course of conduct and thereby disrupt the new Guides even before they are issued. Thus, we predict that the FTC will continue its pattern of enforcement against low hanging fruit, i.e., obvious cases of false advertising, until the Guides have been issued in final and industry has had a grace period in which to digest the new rules. That means, assuming the Guides issue in Winter 2011, we will likely wont be discussing the first major enforcement sweep until the Summer of 2012. 54

Substantively, the FTC is grappling with some significant issues on the new Guides. In response to tighter restrictions on claims of recyclability, for example, the Commission was met with a variety of comments regarding practical implementation. To cite one example, the agency proposed eliminating the commonly used qualification of May not be recyclable in your area in favor of a three-tier system of disclosure that would require every consumer goods manufacturer to ensure what percentage of communities had recycling programs that could recycle their packages before saying anything about recycling at all. Unfortunately, reliable information regarding these issues is not widely available, raising the prospect that industry would need to man the phone banks to contact every community recycling facility in America if they wanted to put the chasing arrows on their packages.

Biodegradability claims have also been more complicated than originally believed. The FTCs first draft of the Guides suggested that an appropriate biodegradability claim could almost never be made for a product destined for a municipal landfill. This is because most municipal landfills do not have conditions conducive to biodegradation. But, the Commissions discussion of the issues cast unnecessary doubt on widely used tests for biodegradation, causing confusion among companies that sell truly biodegradable products. The Commission also focused on terrestrial biodegradation, but said little about aquatic biodegradation concerns.

These and many other unresolved issues have led one senior FTC official to remark publicly that this is the most intellectually challenging endeavor he has ever undertaken.

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Into the Breach Steps NAD:

In the meantime, the National Advertising Division of the Council of Better Business Bureaus (NAD) has heard over a dozen such cases in the last year and is creating law mainly by applying its interpretation of the draft Guides. The NAD is a voluntary, selfregulation forum for advertising claims and disputes. It hears competitor-initiated challenges, challenges brought by consumer groups and NGOs, and it brings its own selfmonitoring cases. Two trends are emerging at the NAD in the area of green claims. First, one sees a significant rise in cases brought by major corporations, such as Procter & Gamble, to challenge green claims by smaller companies such as Seventh Generation. Such challenges have often been successful, resulting in restrictions on some of the marketing efforts by these companies. Second, NAD is seeing more challenges by nonprofits that seek to invalidate misleading industry labeling practices. For example, in the last several years, different groups have attacked animal husbandry claims for chickens, egg production and foie gras. In all of these cases, NAD has rarely been reluctant to write on a clean slate, by defining terms that the FTC and other agencies have left alone due to complexity. Thus, the NAD has a line of cases, for example, interpreting the use of the term natural in products ranging from toothpaste, to sugar substitutes, to hard surface cleaners.

Class Actions:

Class action attorneys have been busy in the area of green marketing as well. For example, the makers of Fiji Water successfully fended off a putative class action regarding their use of a green drop logo on packages. The plaintiffs had contended that the logo conveyed the impression that the product had been certified by a third-party 56

environmental organization, when in reality, the logo was self-administered by the Fiji marketing department. Although this kind of conduct would likely be banned under the new FTC Guides, the court found that it was not misleading to any reasonable consumer and dismissed the case.

SC Johnson settled a class action earlier this year regarding its use of a self-certification on Windex and other cleaning products it sells, called Greenlist. In that case, the plaintiffs had contended that the self-certification was misleading, both because it was self-administered and because it permitted the inclusion of glycol ethers in the Windex formulation. SC Johnson folded its cards rather than fight the case, dropping the Greenlist logo program.

Numerous cases are now pending throughout the country on the labeling of food products containing high-fructose corn syrup (HFCS) as all-natural or natural. Surprisingly, the FDA has no enforceable regulations on its books about the term and the FTC has also stayed out of the area, thus creating the kind of ambiguity on which consumer class action plaintiffs lawyers depend. In a related area, the Corn Refiner industry is defending a Lanham Act false action by a group of sugar growing cooperatives over similar HFCS labeling claims.

The regulation of green marketing is dynamic and largely unsettled. As the rules begin to emerge, marketers will have to proceed carefully.

Christopher Cole is Partner in the Litigation and Advertising, Marketing & Media practices at Manatt, Phelps & Phillips in the Washington, D.C. office. He has extensive experience in matters involving false advertising litigation including the development, 57

substantiation, approval and defense of advertising and labeling claims and represents clients in such industries as environmental products and services, food and beverages, media and telecommunications, consumer products and pharmaceuticals

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