acknowledgements - web viewgreen marketing, also alternatively known as environmental marketing and...

GREEN MARKETING

Acknowledgements

It has been very well said that the Journey of thousand miles begins with one single step. I think that step has already been taken by me. So I would like to take this wonderful opportunity to thank each and every person who has helped me in this step of mine.

Firstly, I would like to thank …. for giving me the chance to face the corporate world and have a practical exposure before really starting off with it.

Sincere thanks to my Faculty guide ……..for accepting me as an intern and providing his immense support and guidance to work on this project.

Last but not the least; I would also like to thank my batch mates and my colleagues for supporting me.

Namita Bhairaviya

En No- 08BS0001823

MRP- GREEN MARKETING

ContentsAcknowledgements.........................................................................................................................2

INTRODUCTION..........................................................................................................................5

Definition........................................................................................................................................6

Green Code.....................................................................................................................................6

Generalise.....................................................................................................................................6

Remember....................................................................................................................................6

Explore.........................................................................................................................................6

Ensure...........................................................................................................................................6

Neutrality.....................................................................................................................................6

Why is Green Marketing Important?..............................................................................................6

Why Go Green?..............................................................................................................................7

External reasons...........................................................................................................................7

Internal Reasons...........................................................................................................................7

Benefits of green marketing-..........................................................................................................7

Problems-........................................................................................................................................7

Implementing Green Marketing Strategies and Tactics..................................................................8

8 steps of going “green”...............................................................................................................8

4p’s Of Green Marketing.............................................................................................................8

What consumers really want?.........................................................................................................8

Suggested solution-.........................................................................................................................8

Principles of green marketing-........................................................................................................9

Consumer Value Positioning................................................................................................9

Credibility of product claims................................................................................................9

Calibration of consumer knowledge.....................................................................................9

Green Marketing – Adoption by the Firms...................................................................................10

OPPORTUNITIES.............................................................................................................10

SOCIAL RESPONSIBILITY.............................................................................................11

GOVERNMENTAL PRESSURE......................................................................................11


COMPETITIVE PRESSURE.............................................................................................11

COST OR PROFIT ISSUES..............................................................................................11

Examples........................................................................................................................................11

GREEN PRODUCT...................................................................................................................11

GREEN COMPANY.................................................................................................................13

GREEN PACKAGING-............................................................................................................16

Going green with Carbon Credits..................................................................................................17

Challenges Ahead..........................................................................................................................19

Ask us how to go green?................................................................................................................19

Conclusion.....................................................................................................................................20

References......................................................................................................................................21

INTRODUCTION


The promotion of environmentally safe or beneficial products, green marketing began in Europe in the early 1980s when specific products were identified as being harmful to the earth’s atmosphere. As a result, new “green” products were introduced that were less damaging to the environment. The concept caught on in the United States and has been gaining steadily ever since. Divergent aspects of green marketing include ecologically safer products, recyclable and biodegradable packaging, energy-efficient operations, and better pollution controls. Advances produced from green marketing include packaging made from recycled paper, phosphate-free detergents, refillable containers for cleaning products, and bottles using less plastic.As today’s consumers become more conscious of the natural environment, businesses are beginning tomodify their own thoughts and behavior in an attempt to address the concerns of consumers. Green marketing is becoming more important to businesses because of the consumer’s genuine concerns about our limited resources on the earth. By implementing green marketing measures to save the earth’s resources in production, packaging, and operations, businesses are showing consumers they too share the same concerns, boosting their credibility.

Definition


Green marketing, also alternatively known as environmental marketing and sustainable marketing, refers to

An organization’s efforts at designing, promoting, pricingand distributing products that will not harm the environment.

All activities designed to generate and facilitate any exchanges intended to satisfy human needs or wants, such that the satisfaction of these needs and wants occurs, with minimal detrimental impact on the natural environment.

Green marketing must satisfy two objectives: Improved environmental quality Customer satisfaction

Green Code

Generalise with care. Consumer behavior will not necessarily be consistent across different product types, and particular market segments may respond to certain issues on the green agenda but not others.Remember, the validity of a piece of market research is not related to the degree to which it supports your preferred option.Explore the context from which market research data comes. Be clear on the nature of the sample used, the questions asked, the way in which responses were recorded and the time and place from which the responses come.Ensure that where market research is crossing international borderlines, that the terminology and interpretation remains consistent. Terms like ‘environment’, green’ and ‘conservation’ do not always translate precisely between languages.Neutrality is important. Ensure that when you pose questions to consumers, that they can make any response without being made to feel guilty or uncomfortable, and ensure that your own preconceptions about the green agenda (such as an assumption that green products will cost extra) are not encoded within the questions.

Why is Green Marketing Important?

Every recycled ton of paper saves approximately 17 trees, which are then available for other uses. Recycling paper also reduces the air and water pollution due to paper manufacturing.The question of why green marketing has increased in importance is quite simple and relies on the basic definition of Economics:

“Economics is the study of how people use their limited resources to try to satisfy unlimited wants. “

There is growing interest among the consumers all over the world regarding protection of environment.


It emerged as growing market for sustainable and socially responsible products and services.

Looks at how marketing activities utilize these limited resources, while satisfying consumers wants, both of individuals and industry, as well as achieving the selling organization's objectives

Why Go Green?

External reasons Satisfying consumer demands Competitive environment Supplier requests Governmental pressure

Internal Reasons Cost / Profit Issues Social Responsibilities

Benefits of green marketing-

The marketing of successfully established green products showcases non-green consumer value, and there are at least five desirable benefits commonly associated with green products:

Efficiency and cost effectiveness; Health and safety; Performance; Symbolism and status; Convenience Gaining retaining customers Improved environmental quality

Problems-

Lack of consumer awareness Limited scientific knowledge Financial constraints Deceptive marketing Lack of stringent legal standards

Implementing Green Marketing Strategies and Tactics


8 steps of going “green” Targeting Product design Positioning Pricing Greening logistics Marketing waste Promotion Green Alliances

4p’s Of Green Marketing Product-Nike and Jordan Shoes Price- Big-Blue Bag –Ikea and Wallmart Place-Carbon Emissions of Ship Promotion-Toyota is trying to push

gas/electric hybrid technology into much of its product line. Largest R&D investment-Hydrogen car

What consumers really want?

Is it genuine Is it of value Is it relevant Is it easy to adopt

Suggested solution-

Employees awareness program Effective communication Constantly refine the product Back up from top level

Principles of green marketing-

Consumer Value PositioningThe marketing of successfully established green products showcases nongreen consumer value, and there are at least five desirable benefits commonly associated with green products:


Efficiency and cost effectiveness;Bundling- To encourage demand, the CFC-free feature was bundled with attributes desired by Chinese consumers, which included energy efficiency, savings, brand/quality, and outstanding after-sales service.

Credibility of product claims Credibility is the foundation of effective green marketing. Green products must meet or exceed consumer expectations by delivering their promised consumer value and providing substantive environmental benefits.

Calibration of consumer knowledgeMany of the successful green products in the analysis described here employ compelling, educational marketing messages and slogans that connect green product attributes with desired consumer value. That is, the marketing programs successfully calibrated consumer knowledge to recognize the green product’s consumer benefits. In many instances, the environmental benefit was positioned as secondary, if mentioned at all.

Third Party Endorsements and Eco-Certifications- Expert third parties with respected standards for environmental testing (such as independent laboratories, government products as consuming up to 30 percent less energy than comparable alternatives.The U.S. Department of Agriculture’s “USDA Organic” certifies the production and handling of organic produce and dairy products.

Word-of-Mouth Evangelism and the Internet- Increasingly, consumers have grown skeptical of commercial messages, and they’re turning to the collective wisdom and experience of their friends and peers about products.72 Word-of-mouth or “buzz” is perceived to be very credible, especially as consumers consider and try to comprehend complex product innovations.The Internet, through e-mail and its vast, accessible repository of information, Web sites, search engines, blogs, product ratings sites, podcasts, and other digital platforms, has opened significant opportunities for tapping consumers’ social and communication networks to diffuse credible “word-of-mouse” (buzz facilitated by the Internet) about green products. This is exemplified by one of the most spectacular product introductions on the Web: Health and safety; Performance; Symbolism and status; and Convenience


Green Marketing – Adoption by the Firms

Green marketing has been widely adopted by the firms worldwide and thefollowing are the possible reasons cited for this wide adoption:

OPPORTUNITIES-As demands change, many firms see these changes as an opportunity to be exploited and have a competitive advantage over firms marketing non-environmentally responsible alternatives. Some example of firms who have strived to become more environmentally responsible, in an attempt to better satisfy their consumer needs are:

o McDonald's replaced its clam shell packaging with waxed paper because of increased consumer concern relating to polystyrene production and Ozone depletion.

o Tuna manufacturers modified their fishing techniques because of the increased concern over driftnet fishing, and the resulting death of dolphins.

o Xerox introduced a "high quality" recycled photocopier paper in an attempt to satisfy the demands of firms for less environmentally harmful products.


SOCIAL RESPONSIBILITY - Many firms are beginning to realize that they are members of the wider community and therefore must behave in an environmentally responsible fashion thus resulting in environmental issues being integrated into the firm's corporate culture.

o An example of a firm that does not promote its environmental initiatives is Coca-Cola which invested large sums of money in various recycling activities, as well as having modified their packaging to minimize its environmental impact. Another firm who is very environmentally responsible but does not promote this fact, at least outside the organization, is Walt Disney World (WDW) with an extensive waste management program and infrastructure.

GOVERNMENTAL PRESSURE - Governmental regulations relating to environmental marketing are designed to protect consumers through regulations designed to control the amount of hazardous wastes produced by firms by issuing of various environmental licenses, thus modifying organizational behavior. In some cases governments try to "induce" final consumers to become more responsible by taxing individuals who act in an irresponsible fashion.

o For example in Australia there is a higher gas tax associated with leaded petrol.

COMPETITIVE PRESSURE -Another major force in the environmental marketing area has been firms' desire to maintain their competitive position. In many cases firms observe competitors promoting their environmental behaviors and attempt to emulate this behavior. In some instances this detrimental environmental behavior.

o For example, it could be argued that Xerox's "Revive 100% Recycled paper" was introduced a few years ago in an attempt to address the introduction of recycled photocopier paper by other manufacturers. In another example when one tuna manufacture stopped using driftnets the others followed suit.

COST OR PROFIT ISSUES - Disposing of environmentally harmful by-products, such as polychlorinated biphenyl (PCB) contaminated oil are becoming increasingly costly and in some cases difficult. In minimizing wastes firms often develop more effective production processes that reduce the need for some raw materials thus serving as a double cost savings. In other cases firms attempt to find end-of-pipe solutions, instead of minimizing waste by trying to find markets or uses for their waste materials, where one firm's waste becomes another firm's input of production.

Examples-

GREEN PRODUCTTide Coldwater Laundry Detergent -“Did you know that between 80 and 85 percent of the energy used to wash clothes comes from heating the water? Tide Coldwater—The Coolest Way to Clean.”


Yo bikes - these bikes do not use petrol or diesel instead run on electric charging and hence cause less pollution.

Philips Light's CFL - 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.

In USA, Levis’ "Recycled Jeans" get on the green side of trendy eco-smart consumers, seamlessly combining the desirable washed out look and feel of its product with a self-evident ecological benefit.

Coca-Cola pumped syrup directly from tank instead of plastic which saved 68 million pound/year.

Volkswagons eco friendly car Can a car ever be eco-friendly?


Well, their latest BlueMotion Polo is green enough to be tax exempt - in fact, it actually gives off less CO2 than any other car in its class.

Nokia wins Green Company of the Year award in India for its take back campaign

Nokia initiatives includes

Anyone can drop their phone off at any Nokia flagship store as well as other selected retailers or contact your local authority. There are also close to 5000 Nokia care points globally each taking back mobile devices and accessories.

All components of its handset are recycle able whether it be batteries, components, covers , packaging.

Nokia phones are made up of only 45% plastic and rest of ceramic, metals, non metals and copper. All the metals in the mobile can be recovered and used to generate energy or make new product from musical instruments to gold rings or even a park bench.

WIPRO Infotech, the India and Middle East IT arm of Wipro, on Thursday launched its eco-friendly and toxin free desktops, manufactured with materials free of deadly chemicals.

GREEN COMPANY

NHS Green Initiatives - There’s clearly lots of opportunities to save travel costs and associated CO2 emissions in the NHS, for instance where multi-disciplinary teams of experts need to consult on a diagnosis. The NHS Sustainable Development Unit has reported that NHS staff, patients and visitors travel 10.4 billion Km per year. If video conferencing was used for just 30 hours per week in each large trust it could deliver travel savings of £57m (additionally this could also save up to 2.3m working hours) per year and 7,200 tonnes of CO2.

The NHS has a carbon footprint of 18 million tonnes CO2 per year, up 40% since 1990, so it has a significant challenge ahead to comply with government carbon reduction targets and legislation (which includes the CRC). Green IT is clearly a way of doing that and the N3 web site points out that the network can help the NHS reduce its footprint in other ways, including:

Reducing the N3 core Points of Presence from 57 to 10 and refreshing routers.

If 25% of the staff that could access the network from home did so one day a week it would save 138,812 days of staff commuting travel per year, saving 5.4m Km of staff travel and 773 tonnes of CO2.

Replacing all paper prescriptions with Electronic Transmission Prescriptions could save 4,197 tones of paper (equivalent to around 100,000 trees) and 14,100 tones of CO2 per year.


Badarpur Thermal Power station of NTPC in Delhi is devising ways to utilize coal-ash that has been a major source of air and water pollution.

Barauni refinery of IOC is taken steps for restricting air and water pollutants.

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.

Introduction of CNG in Delhi- 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.

Maruti- Greening of Supply Chain- The company has remained ahead of regulatory requirements in pursuit of environment protection and energy conservation at its manufacturing facilities, and in development of products that use fewer natural resources and are environment friendly.

The company credited the 'Just-in-Time' philosophy adopted and internalized by the employees as the prime reason that helped to excel in this direction. McDonald's restaurant's napkins, bags are made of recycled paper.

Greenest companies in India-

A survey conducted by BT- AC Nielsen ORG-MARG, ranked Oil and Natural Gas Company (ONGC) the greenest company followed by Reliance Industries. Overall, the oil and petroleum sector was considered the greenest sector in India. BPCL, Castrol India and HPCL are other companies in this sector that were rated green companies in the survey. The private sector companies were in a majority (13 out of 20) in the list of Top 20 greenest companies in India.

India’s software companies are also considered green companies. IT companies are allowed to set up their offices within the city limits. This is because they do not harm the environment. Johnson and Johnson Ltd., Chillibreeze, IBM, LG Electronics, PNB, Tata Motors and Hero Honda Motors are some of the other green companies in India.


Dell is implementing a plan to simplify and revolutionize computer packaging that will result in estimated savings of more than $8 million and the elimination of approximately 20 million pounds of packaging material over the next four years. Today’s announcement is the latest milestone in Dell’s commitment to become the greenest technology company on the planet.

ITC has been 'Carbon Positive' three years in a row (sequestering/storing twice the amount of CO2 than the Company emits). 'Water Positive' six years in a row (creating three times more Rainwater Harvesting potential than ITC's net consumption). Close to 100% solid waste recycling.


http://www.nokia.com/environment/our-responsibility/environmental-strategy/climate-strategy

ITC's Social and Farm Forestry initiative has greened over 80,000 hectares creating an estimated 35 million person days of employment among the disadvantaged. ITC's Watershed Development Initiative brings precious water to nearly 35,000 hectares of drylands and moisture-stressed areas.

McDonald’s is using networking equipment from Echelon Corporation to manage and reduce the energy consumption of its kitchens.

A McDonald’s restaurant in Pensacola, Florida is digging 55 holes, 350 feet deep to heat and cool the new restaurant with geothermal energy.

GREEN PACKAGING- Mc Donald’s wraps all its food in paper bags. It promotes the use of paper bags instead of plastic bags.

Mac donalds is also known for usage of least amount of plastic and the practices it follows also are such that minimum resources are utilized. Like the packaging of its food is done in paper bag and even wrapped in paper thus reducing the usage of plastics.

GREEN ADS - these are th paper ads given by an organization called green peace which works for social and environmental issues.

Going green with Carbon Credits.


http://www.environmentalleader.com/2007/11/14/mcdonalds-taps-into-geothermal/

http://www.environmentalleader.com/2007/07/10/mcdonalds-networks-kitchen-equiptment-to-save-energy/

With the amount of CO2 and other greenhouse gases in the air reaching alarming levels, there has been rising international concern about the immense damage they cause to the environment. Concepts like carbon credits and carbon offset were introduced in order to improve the scenario by encouraging firms which are more eco friendly in the manner in which they conduct their operations.

The use of carbon credits is a new phenomenon. One carbon credit gives the permission for emission of one tonne of carbon dioxide or a similar amount of any other greenhouse gas into the atmosphere. Through the buying and selling of carbon credits in the carbon trading system, the total level of global emissions can be controlled.

Every firm is provided with a permit of carbon credits, which regulates the extent to which it can release carbon dioxide and other greenhouse gases. Businesses opt for carbon trading if their emissions do not fall within their share of carbon credits in order to buy credits due to a legal obligation. They buy them from organizations with lesser emissions having extra carbon credits.

Hence, total carbon emissions stay lower than the fixed levels, and organizations are encouraged to use greener ways of doing their work that lower the amount of gases discharged by them and save them from extra expenditure to be made on carbon credits. This system is beneficial for companies using ecologically sustainable methods to keep trying in this respect as they can make more earnings from carbon credits business.

Carbon credits can be purchased like any other commodity because they are sold in an open market and there are several agencies that trade in them. In fact, even if you are not trading on behalf of a firm, you can opt to buy carbon credits in order to reduce your carbon footprint. The amount raised through your investment is channelized for financing ecological projects running in various parts of the globe that contribute towards counterbalancing your emissions.

It is estimated that 60-70% of Green House Gases (like hydro fluorocarbons, methane and nitrous oxide) emission is through fuel combustion in industries like cement, steel, textiles and fertilizers. They are released as by-products of certain industrial process, which adversely affect the ozone layer, leading to global warming. Carbon credits seek to reduce these emissions by giving them a monetary value. One credit gives the owner the right to emit one ton of carbon dioxide. Such a credit can be sold in the international market at the prevailing market price. This means that carbon becomes a cost of business and is seen like other inputs such as raw materials or labor.

International treaties have set quotas on the amount of GHG countries can produce, which in turn set quotas for businesses. Businesses that are over their quotas must buy carbon credits for excess emissions, while those below can sell their remaining credits. The ones who are selling are companies that use clean technology and those buying are the world’s polluters. These credits can be exchanged between businesses or bought and sold in international markets at prevailing market price at two exchanges, namely the Chicago Climate Exchange


and the European Climate Exchange. The Multi-Commodity Exchange of India (MCX) may soon become the third exchange in the world to trade in carbon credits.

As emission levels increase globally, the number of companies wanting/needing to buy more credits will increase, pushing up the market price and encouraging businesses to undertake eco-friendly activities that create for them carbon credits to sell. Developed countries have to spend nearly $300-500 for every ton reduction in CO2, against $10-$25 by developing countries. India’s GHG emission is below the target and so, it is entitled to sell surplus credits to developed countries. India is considered to claim about 31% of the total world carbon trade, which can give $25bn by 2010. This is what makes trading in carbon credits such a great business opportunity. Foreign companies which cannot fulfill the norms can buy the surplus credit from companies in other countries. Many Indian companies have been re-rated on the stock markets on the basis of the bonanza that will accrue to them when carbon trading kicks off. SRF Ltd and Shell Trading International have entered into sale and purchase Credit Emission Reduction. Suzlon Energy and Shriram EPC have business in wind energy which is eligible for carbon credit benefits. Shree Renuka Sugars is also expected to benefit from carbon credits. Gujarat Flourochemicals was among the early companies to register for Clean Development Mechanism (CDM) project.

India has emerged as the dark horse in this race as more than 200 Indian entities have applied for registering their CDM Project for availing carbon credits. Currently, one carbon credit is worth 13 euros. Indian companies can have higher incomes more from carbon credits than their core business. The carbon credit market was worht $25 billion last year and is growing at tremendous space, and there is a demand to reduce 1 billion ton of carbon emissions in the world, so that threats like global warming could be dealt with.

Indian companies are fast realizing there’s money to be made by becoming eco-friendly. With new core sector projects like power and steel coming up in India, the carbon credit market will rise once again. The 800 million farming community in India has also a unique opportunity where they can sell Carbon Credits to developed nations.

Challenges Ahead


Green products require renewable and recyclable material, which is costly

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

Water treatment technology, which is too costly Majority of the people are not aware of green

products and their uses Majority of the consumers are not willing to pay a

premium for green products

Ask us how to go green?

Less use of polythene Less use of mobile phone Crush plastic bottle after use Use disposable items Love nature Save water Save fuel Avoid smoking

Conclusion

Green marketing should not neglect the economic aspect of marketing. Marketers need to understand the implications of green marketing. If we think customers are not concerned about


environmental issues or will not pay a premium for products that are more eco-responsible, think again. We must find an opportunity to enhance our product's performance and strengthen yur customer's loyalty and command a higher price.

Green marketing is still in its infancy and a lot of research is to be done on green marketing to fully explore its potential. Think of a refrigerator for example. While we may have had to be convinced in the 1950s to buy a refrigerator, we would have wanted the great white box to look cool in the 1970s, but in today's uncertain world, we might ask ourselves about the impact of the chlorofluorocarbons (CFCs) that our refrigerator is emitting and demand a more environmentally friendly refrigerator.

So, if today's successful marketing is about appealing to personal values and delivering consumer empowerment, then surely the time is right to inject sustainable development into the marketing mix to help address some of the gritty issues currently facing our planet. Green marketing methods produce highly effective results. They apply all of the steps you need to cut costs, raise response rates and increase growth in the most important marketing metric we are all held accountable for—the bottom line.

References


www.greenguide.com

www.wikipedea.com

http://www.youtube.com/watch?v=7nOB5vk5BX0&feature=player_embedded

www.scribd.com

www.futurelab.net

and various other blog sites.


http://www.futurelab.net/

http://www.scribd.com/

http://www.youtube.com/watch?v=7nOB5vk5BX0&feature=player_embedded

http://www.wikipedea.com/

http://www.greenguide.com/

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