green marketing

rNonika Sabharwal

Presented By:Rajesh GroverNonika SinghIshita Sood

Aayushi SharmaPuneet Garg

UNIVERSITY BUSINESS SCHOOL

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Some of the best examples of Green Brand


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What is Green Marketing? Term “Go Green” is an Indicator of Purity.

Advertising without any adverse impact on the society.

Production, Consumption and Disposal of ecofriendly products.

Concerns with protection of Ecological Environment and participates in green improvement.

Product Modification, changes to the production process, sustainable packaging as well as modifying advertising.


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Introduction to Green MarketingModern marketing has created a lot of problems. For example: Growth in marketing activities resulted into rapid economic growth, mass production with the use of advanced technology, comfortable and luxurious life, style, severe competition, use of unhealthy marketing tactics and techniques to attract customers, exaggeration in advertising, liberalization and globalization, creation of multinational companies, retailing and distribution by giant MNCs, etc. and so on.

Green marketing encourages the production of pure products by pure technology, conservation of energy, preservation of environment, minimum use of natural resources and more use of natural food instead of processed food. Those all efforts made by people, social organisations, firms and government are said to be as green marketing efforts for the sake of healthy environment.


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Eco-Friendly Rickshaws and Solar Power Energy


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Green Products These are the products that are manufactured through green

technology and cause no environmental hazards.

For green products, it is necessary that there should be conservation of natural resources and sustainable development.

Products that can go through 3R’s (i.e. Reduce, Reuse, Recycle).

Products under approved chemicals and with less toxic effect on the environment.

Products that do not harm and pollute the environment.

Environmentally preferable to other products. For example: Eco-friendly packaging

Products that can be tested on animals as well.


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NEED FOR GREEN MARKETING

The concept of green marketing has emerged as a viable solution to address environmental issues and market the products of the company at the same time. The question of why green marketing has increased in importance is quite simple and relies on the basis of definition of Economics, i.e. Economics is the study of how people use their limited wants. Thus, mankind has limited resources on the earth, with which she/he must attempt to provide for the worlds unlimited wants.

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NEED FOR GREEN MARKETING

The factors that impel organisations worldwide to go green are: Social Responsibility Governmental Pressure Competitive Pressure Cost or Profit Issues Opportunity Cost Reduction


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SOCIAL RESPONSIBILITY

Many companies have started realizing that they must behave in an environment friendly fashion. They believe both in achieving environmental objectives as well as profit related objectives respecting the principle of Extended Producer Responsibility (EPR).


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GOVERNMENTAL PRESSURE

Various regulations are framed by the government to protect consumers and the society at large. The Indian government too has developed a framework of legislations to reduce the production of harmful goods and by-products. These reduce the industry's production and consumer‘s consumption of harmful goods, including those detrimental to the environment; for example, the ban of plastic bags, prohibition of smoking in public areas, etc.


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COMPITITIVE PRESSUREAnother 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 behaviours and attempt to emulate this behaviour. In some instances this competitive pressure has caused an entire industry to modify and thus reduce its detrimental environmental behaviour.


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COST REDUCTION

Reduction of harmful waste may lead to substantial cost savings. For Example, polychlorinated biphenyl (PCB) contaminated oil are becoming increasingly costly and in some cases difficult. Therefore firms that can reduce harmful waste may incur substantial cost savings. In some cases, many firms have started using a technique which develops a symbiotic relationship whereby the waste generated by one company is used by another as a cost-effective raw material.


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OPPORTUNITY

Opportunity In India, around 25% of the consumers prefer environment friendly products, and around 28% may be considered health conscious. Therefore, green marketers have diversified to fairly sizeable segment of consumers to cater to.


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EXAMPLES IN INDIA

Digital Tickets by Indian Railways. :- Recently IRCTC has allowed its customers to carry PNR no. of their E-Tickets on their laptop and mobiles. Customers do not need to carry the printed version of their ticket anymore.

No Polythene carry bags for free:- Forest & Environmental Ministry of India has ordered to retail outlets like Big Bazar, More, Central, D-Mart etc. that they could provide polythene carry bags to customers only if customers are ready for pay for it.

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EXAMPLES IN INDIA Green IT Project: State Bank of India. By using eco

and power friendly equipment in its 10,000 new ATMs, the banking giant has not only saved power costs and earned carbon credits, but also set the right example for others to follow. SBI is also entered into green service known as “Green Channel Counter”. SBI is providing many services like; paper less banking, no deposit slip, no withdrawal form, no checks, no money transactions form all these transaction are done through SBI shopping & ATM cards. State Bank of India turns to wind energy to reduce emissions. The wind project is the first step in the State Bank of India's green banking program dedicated to the reduction of its carbon footprint and promotion of energy efficient processes, especially among the bank's clients.

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EXAMPLES IN INDIA

Lead Free Paints from Kansai Nerolac:- Kansai Nerolac has worked on removing hazardous heavy metals from their paints. The hazardous heavy metals like lead, mercury, chromium, arsenic and antimony can have adverse effects on humans. Lead in paints especially poses danger to human health where it can cause damage to Central Nervous System, kidney and reproductive system. Children are more prone to lead poisoning leading to lower intelligence levels and memory loss.

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EXAMPLES IN INDIA Wipro's Green Machines:-Wipro

Infotech was India's first company to launch environment friendly computer peripherals. For the Indian market, Wipro has launched a new range of desktops and laptops called Wipro Greenware. These products are RoHS (Restriction of Hazardous Substances) compliant thus reducing e-waste in the environment.


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Reconceptualizing the marketing environment

Existing model of marketing dismiss the ecological contexts in which economic activity occurs.

The response to increased environmental concern has been to try to accommodate it within existing models of the environment(of the PEST type) by discussing it as political pressure, an influence on the economics of business, a social trend or a technological challenge.


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Global Physical Environment The reality is that the physical environment is the foundation

on which societies and economies are based. At the simplest level, the environment affects businesses

because it represents the physical space within which they and their customers exist, and it provides the resources upon which they depend.

All of the major industries in the world face important environmentally related issues and challenges, each of which creates marketing opportunities and threats for different businesses. For example:

(i) For the car and oil companies, concerns about carbon dioxide emissions and global warming constitute a major threat. For companies working in alternative fuels and energy efficiency devices it represents a major opportunity.

(ii) For agriculture, forestry and fishing, the threat that unsustainable production poses in terms of loss of biodiversity, deforestation and soil erosion are crucial issues for the future.


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Global socio-economic system

Recent decades have also seen a more global social perspective emergence reflected in global companies, markets, technologies and sociocultural trends.

The response to the green challenge has also become more global through increasing international environmental legislation and intergovernmental conferences. For example:

(i) The Montreal Protocol to reduce CFC use, or the worldwide ban on commercial whaling.

(ii) 1997 Kyoto protocol on climate change.


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Society

Within societies, concern about the environmental and social impacts of business is generally increasing and is being reflected in a number of ways, including: Changing values and attitudes.

Pressure group activity.

Media interest.

Political and legal interest.


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The economy

Environmental protection and economic growth are interlinked in many complex ways, and that long-term economic growth will be dependent on better environmental protection.

Many business opportunities are now emerging for technologies, goods and services which address environmental problems, or at least make less of a contribution towards them.

Key areas where environmental concern is influencing economic issues include:

(i) Production economics.

(ii) Investor pressure.

(iii) Green taxes.

(iv) Access to capital.


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Industry structure

The green challenge is one of many forces encouraging a more relationship-based view of industry structures, particularly through an emphasis on recycling and supply loops.

These feature relationships in which the customer returns products or packaging to the manufacturer, and in the process become another form of supplier.

The changes that greening is bringing to industry structures includes:

(i) The threat of substitutes.

(ii) Supplier relationships.

(iii) Market entry barriers.


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Competitors

Global competition and continuous improvement philosophies have narrowed the differences between products to the extent that ‘softer’ issues such as perceived environmental impact can act as a ‘tie-breaker’ for the consumer trying to choose brands.


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Customers

Recent UK research by the Co-operative Bank suggested that around one in three Britons make some purchases on the basis of ethics and environment, and that at least 5 per cent consistently search for ethical labeling, recycle, participate in boycotts and discuss green issues in relation to the brands they buy.

The identity, characteristics and sincerity of these ‘green consumers’ has been the dominant theme in discussions about green marketing.


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Firms

As external concern about the socio-environmental impacts grows, so companies large and small are having to respond through changes to a range of organizational dimensions.

Environmental management appointments, the introduction of green auditing and reporting systems, and changes to company policies and facilities to reduce waste and pollution are common responses.


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Products Environmental concern is creating demands for new

products (such as pollution control equipment), and is causing existing products to be reconsidered and in many cases redesigned, reformulated or produced differently.

In the USA, the proportion of green products among new product introductions rose from 1.1 per cent in 1986 to a high of 13.4 per cent in 1991 (Ottman, 1994).

By 1997, green products accounted for 9.5 percent of all new US product introductions, with the highest proportion in the ‘household products’ category, accounting for 29.5 percent of product introductions (Fuller, 1999).

Environmental concern can also lead to the repositioning of products. In response to concern about exposure to ultraviolet radiation and the risk of skin cancer, sun tan lotions have changed from an emphasis on sun exposure and beauty to an emphasis on skin protection.


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SUSTAINABLE MARKETING MIX

Sustainability Marketing, unlike traditional marketing needs to adhere well to sustainability principles throughout the marketing mix .

This helps to

1. strengthen the Brand Identity

2. Provide Credibility

3. Ensure Honest, truthful communication and radical transparency with stakeholders


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PRODUCT

AIM: Reduce the carbon footprint Source Of Material – natural and

organic materials sourced through (legal) local and through fair trade suppliers.

Manufacturing process- Lean Manufacturing

Embrace sustainability principles at its core


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PRICE

Pricing has always been an issue for sustainable products, as they tend to be costlier due to higher cost of production. This creates a “green pricing gap” between green products and conventional products

Marketers need to reduce this price barrier by either reducing cost of production or through marketing efforts to raise the perceived value to command a premium.


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PLACE

A place related sustainable marketing area of increased interest is buying locally.

Consumers are increasingly concerned about the environment and carbon emissions from transporting goods over long distance.


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PROMOTION

Even promotion can be done in a sustainable manner

Nike recently made a big splash with its marketing focused on creating a better world through sports. The efforts included a first 100% recycled television advertisement.


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ECO LABELS

It is a voluntary method of environmental performance certification and labeling that is practiced around the world.

An Eco label identifies products or services environmentally preferable overall, within a specific product or service category .

They are affixed to products that pass the criterion set by government, association or standard certificate body.


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MAIN FEATURES

Eco labels are affixed to products that a re verified unlike green symbols

Eco Labels may focus on certain environmental aspects of the product example energy consumption, water use, etc

Eco Labels are usually funded and backed by the national government, but administered by an independent body


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GREEN MARKETING MYOPIA

Green Marketing must satisfy two objectives : improved environmental quality and customer satisfaction.

Misjudging either or overemphasizing the former at the expense of the latter can be termed as “green marketing myopia”


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Many Green Products fail as the manufacturer focus too much on “greeness” over the broader expectations of the consumers or other market players.

Green Marketing Myopia can also occur when green products can fail to provide credible, substantive environmental benefits.


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Strategies to avoid Green Marketing Myopia

Consumer Value Positioning Calibration of Consumer Knowledge Credibility of Product Claims


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Role of IT in Green Marketing Usage of Green Data: This data is defined as the data in which

mechanical, lighting, electrical and computer systems are designed for maximum energy efficiency with minimum environmental impact.

Promotion of Green technology and Delivering Environmentally sound solutions.

Reduction in power consumption of the data center that do not harm and pollute the environment.

Using low-emission building materials, carpets, paints and other biodegradable products.

Using other alternative energy source techniques manufactured through green technology.


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Impacts of Green Marketing

People are insisted more on pure products- edible items, fruits and vegetables based on organic farming.

Reducing the use of plastics and other plastic based products.

Increased consumption of herbal products instead of processed products.

Recommendation of jute, cloth and paper bags instead of plastic carrying bags.

Increased use of herbal medicines, natural therapy and yoga for a healthy living.

Strict provisions to protect forests, rivers and other natural resources from being depleted, avoid deforestation, flora and fauna.


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Impacts of Green Marketing

Imposing strict norms on pollution control. For example: Odd/Even traffic rule

Restriction of duplication and adulteration.

Establishment of several national and international agencies and firms to monitor efforts in relation to pollution control and in the production of eco-friendly products.

We need to just “Think Green” but to “Go green” in our thoughts, behavior and then only our green actions will take place.


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BENEFITS OF GREEN MARKETING

Companies that develop new and improved products and services with the environment inputs in mind give themselves access to new markets, increase their profit sustainability and enjoy a competitive advantage over the companies which are not concerned for the environment.

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It ensures sustained long – term growth along with profitability.

It saves money in the long run, though initially the cost is more.

It helps companies market their products and services keeping the environment aspect in mind. It helps in accessing the new markets and enjoying competitive advantage.

Most of the employees also feel proud and responsible to be working for an environmentally responsible company.

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Not everyone is aware of the importance of protecting the environment, by making your green marketing campaign can educate your customers to become better at preserving nature.

Well co-ordinated use of all green marketing strategies will result in better physical environment in terms of reduced air and water pollution, waste energy depletion, global warming, deforestation, depletion of natural resources, and rate of landfills.

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Green based products are higher in quality in terms of energy saving, performance, convenience, safety, etc. which makes a product better.

Brand loyalty is near all time low. In fact the percentage of Americans who feel that some brands are worth paying more for is declining. According to a poll conducted by the Porter Novelli consumers viewed company’s record on the environment as an important determinant of their purchase decision


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Problems in Green Marketing

People not willing to pay extra: The biggest challenge and obstacle faced in India is that not many people are willing to spend an additional amount to buy green products. Indian consumers are price sensitive. They are not willing to spend more for products that are good for the environment. A segment of consumers sees no personal gain in buying eco-friendly products and hence are not willing to shell out extra amounts for something which is not for their immediate personal benefit.

Selling same old product in the name of green product: Another factor for less growth of green products is that many consumers in India believe that there are no products such as “green products” rather these are merely selling tactics adopted by the companies to augment their sales and revenue.The past experiences of the consumers in India have been rough in respect of green products, for the reason that the producers and manufacturers made use of the growing awareness of the concept of green marketing in selling their same old product with same ingredients/features etc. by merely employing new strategies of promoting by naming it a “green product”.


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Continued….Green washing: It is the term used when

producers, manufacturers or marketers make false environment friendly claims for their product and deliberately mislead their consumers by incorrectly endorsing and promoting its environmental benefits. This again makes consumer averse of buying green products as they are not able to differentiate between the real and the fake claims made by the producers in respects of the products marketed as environment friendly.

Lack of proper knowledge: Although many consumers are getting aware about the merits of using green products, but it is still a new concept for the mass and they are not having adequate knowledge about green products. Consumers need to be educated and make aware of the environmental threats.According to a recent survey, it has been found that more than 50% of the adults say that, they would do work for the saving of environment, if only they come to know how?


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Establishing the Environment Saving Policies: Though the government has formulated several policies and laws in order to give consumers the opportunity to make better decisions or to motivate them to be more environmentally responsible, but here is always a difficulty in establishing policy that would cover all environmental issues.


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Suggested SolutionsImplement strategies: It is not enough to talk green.

Companies must be green or at least be perceived as making a concerted effort in the right direction. Strategies in the arsenals of companies who do right by their consumers and the environment include: Benchmarking- Establish a benchmark to measure the

progress of company in terms of eco aspects. Self certify the company’s progress and the efforts made by company.

External Audit- Conduct a thorough environmental audit to access current performance. To build credibility, have your audit certified by an independent third party and voluntarily report results to the environmental protection agency and to the public via corporate Environmental Progress Report.


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Employee Awareness Program: It is only when employees are aware of the issues and given the authority to make changes that greener products will be developed and environmentally sound corporate practices be put into place. Conduct innovative & thought provoking educational programs to

heighten awareness for the issues & empower employees to act positively on ecological issues.

Invite outside speakers to talk about trends in population, technology, economy and the environment.

Constantly refine the product: Consumers intuitively understand that no product is truly “green”. What they want from companies is reasonable progress. So, companies should constantly integrate, learn & refine products and processes. For this develop a plan, set measurable goals and work towards them.

Effective communication: Effectively communicate with the consumers. Always look for feedback from customers as well a from environmental organizations. Be publically accountable; regularly issue reports on environmental performance, advertise them and use them as a tool to improve public relations. Clearly state the benefits and tell the consumers what are the cost savings and how the product is eco friendly.


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Golden Rules of Green Marketing

Know your Customer: The company should know the needs of the consumer and awareness of the consumer about the issues that your product attempts to address.For example: Whirlpool learned the hard way that consumers wouldn’t pay a premium price for a CFC free refrigerator because consumers didn’t know about CFCs at that time.

Empower Consumers: Make sure that consumers must feel, either by themselves or in concert with all the other users of the product, so that they can make a difference. This is called “empowerment” and due to this main reason, consumers will buy greener products.

Be Transparent: Consumers must believe in the legitimacy of the product and the specific claims made in regard.


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Reassure the Buyer: Consumers must be made to believe that the product performs the job, it is supposed to do. Companies should not forego product quality in the name of the environment.

Recognize changed customer expectations: It is not enough to just make the green products. Companies must fulfill the consumers expectations that changes with time, like some people want products that are pocket friendly and also helps to reduce the environmental impact in their own lives too.


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Green Strategy FormulationTo adopt green marketing, the company must formulate strategy, commonly known as Green Strategy. This may be SWOT Analysis or Environmental Audit.


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STRENGTHS

Marketers get access to new markets and gain an advantage over competitors that are not focusing on “Greenness”.

Marketers can charge a premium on products that are seen as more eco-responsible.

Organizations that adopt Green Marketing are perceived to be more socially responsible.

Green Marketing builds Brand Equity and wins Brands Loyalty among customers.


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WEAKNESS

Most customers choose to satisfy their personal needs before caring for the environment.

Overemphasizing greenness rather than customer needs can prove devasting for a product.

Many customers keep away from products labelled “Green” because they see such labelling as a marketing gimmick and they may lose trust in the organization that suddenly claims to be Green.


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OPPORTUNITIES Marketing to segment which are becoming more

environmentally aware and concerned. These consumers are demanding products that conform to these new attitudes.

Organizations perceive Green Marketing have a competitive advantage, relative to the competitors who do not address to environmental issues.

Example: Offering an Environmental friendly product and saving resources, and relating them to internal strengths.


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THREATS Uncertainty as to the environmental impact of present

activities, including that is perceived to be less environmentally harmful.

Uncertainty as to which green marketing activities are acceptable from a government perspective.

The possibility of a backlash from consumers or government based on existing green marketing claims.


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Case Study (Starbucks)Today many companies have switched to choose green marketing campaign to promote they products, but not all companies are quite serious in the campaign, the seriousness of doing green marketing campaign can be judged from the campaign conducted continuously and sustainably. In this case, Starbucks is quite serious in implementing green marketing campaign, not just trying to lure consumers alone but he really did to save the planet. Starbucks adopted many strategies that are quite unique and very beneficial to the preservation of the environment, not only interesting in terms of the product but also in terms of action to prove its seriousness in conducting the campaign.


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1. Do modification in products The first thing done by Starbucks is doing modification in the

product, taking into account a lot of cup waste that he will produce when the consumer has come out of his shop. Starbucks start to think to create a packaging that can be recycled easily. As said by Starbucks: “It’s our commitment to purchase only the highest quality, ethically sourced and responsibly grown coffee. To reduce our own environmental footprint and fight climate change. And to give back to the neighborhoods and communities we’re a part of”.

This you can see in the picture below, you can see the start of a change in a Starbucks-owned packaging paper cup which started from 1971 to 2009 where packaging is Starbucks give to consumers is always an improvement to be more eco friendly.


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•In 1971, first starbucks opened in Seattlee’s pike place market.•In 1984, Starbucks started the paper cups for beverages.•In 1997, starbucks developed the recycled-content cup sleeve as a way to protect customers from hot beverages and avoid the waste of “double cupping.”•In 2006, they launched the industry’s first hot beverage paper cup with 10% post-consumer recycled fibre.•In 2008, they rolled out a new plastic cup that has less of an environmental impact than our original plastic cups.•In 2009, they hosted a Cup Summit in Seattle, bringing together all facets of our paper and plastic cup value chain to find agreement on criteria for a comprehensive recyclable cup solution.


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2. Get opportunity in the earth day

Earth day is an important day as a tangible manifestation of environmental conservation; Starbucks certainly not miss to participate in activities that are routinely performed in commemoration of earth day. Each year a different theme Starbucks to commemorate the day. Few of them are:

A) 2011

On April 22, Starbucks invited everyone to bring in a reusable mug or tumbler and get a free brewed coffee or tea. The customer choice of brew, hot or iced. This is happening at participating stores in the United States and Canada.

Starbucks recognize the impact one can make through careful, conscious choices. So he want to encourage and reward those of customer who use tumblers or travel mugs in their daily routines. The customer will helping to reduce the environmental impact!. This campaign mean anytime customer bring in their own tumbler or travel mug to a participating Starbucks, they will get 10 cents off drink every day.


B) 2012Starbucks Earth Day promotional campaign includes its green project, The Big Picture, where thousands of New Yorkers trade in their paper cups for reusable mugs. Each coffee cup placed on the sidewalk leads to the formation of a design. In the end, the large cup display forms an aerial mural of a sequoia tree.To launch the campaign, Starbucks provided free coffee to customers who brought in their own reusable mugs. The campaign’s catch phrase “One person switching can save trees. Together we can save forests” shows how individual actions can lead to collaborative efforts to help the environment.C) 2013“Bring 10 used paper cups to get a coffee tumbler”. This is the slogan for an environment protection campaign Starbucks Coffee Korea will host to mark Earth Day, which falls on April 22.The company has stockpiled 1,000 tumblers for the event that will kick off at 11:30 a.m. at Seoul Plaza. During the event, it will also distribute 3,000 flower pots and compost made from coffee grounds.

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3. Utilize Facebook for campaign

Facebook is a social media that are complete enough to provide the necessary facilities to its users, it is not surprising that Starbucks chose to do green marketing campaign in Facebook, Starbucks actually not only choose Facebook account but there is also use a Twitter, Google Plus and Instagram. But most the activities can display that have been carried out by Starbucks is Facebook.

we see the example images in the next slide that are taken from Facebook page belongs to Starbucks. There you can see some campaign events with the green theme has been done by Starbucks starting from the year 2010 until now. Starbucks never ceases to perform the update through his official account on Facebook, it is not surprising that many consumers are getting information about the event to be held by the Starbucks via this medium so that each event is carried with the green theme of this campaign can be fairly successful.


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Conclusion

Green marketing campaign is a new way of doing marketing; of course it is not easy to do this kind of campaign, need totality and continuities to do that, so you will be taken seriously by your customers. With totality businesses you can save the earth through your products and could even propitiate for consumers who want to save the earth. Eco-friendly campaign can give you more profit-fold as in my previous article that discussed the benefits of doing green marketing campaign.

As has been done by Starbucks can give you an example of the seriousness of doing green marketing campaign will give you get many benefit of it.


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REFERENCES

http://www.yourarticlelibrary.com/marketing/green-marketing-evolution-reasons-advantages-and-challenges/32326

http://www.referenceforbusiness.com/encyclopedia/Gov-Inc/Green-Marketing.html

Polonsky, Michael Jay (1994), “ An Introduction to Green Marketing”, Electronic Green Journal, 1(2), Article 3.

Peattie, K. & Charter, M (2003), Green Marketing, The Marketing Book, pp 726-755

Baker, Michael; The Marketing Book, Fifth edition, Elsevier, 2002.