GREEN MARKETING

IntroductionThe concept of marketing is not new, emerging in the early part of the 1900s in response to changes in the economic and competitive environment. New mass production techniques increased the supply of goods to the point where they overlook demand and therefore producers had to find ways of selling then goods and keep their mass production systems at full capacity. Mass production processes tended initially to standardize products but business soon began to see the need to differentiate themselves from their competitors and to match their product ranges to their customers needs.Green marketingGreen marketing is a simple and natural extension of the marketing process, recognizing the importance of environmental and ecological considerations at every level of the organization and in the market place. Green marketing represents a discontinuous shift in corporate philosophy. Green marketing is ethical, ecological and compatible with sustainable development. It represents a cultural change which emphasis co-operation rather than competition.Green marketing refers to the process of selling products and/or services based on their environmental benefits. Such a product or service may be environmentally friendly in itself or produced and/or packaged in an environmentally friendly way.According to the American Marketing Association, green marketing is the marketing of products that are presumed to be environmentally safe. Thus green marketing incorporates a broad range of activities, including product modification, changes to the production process, packaging changes, as well as modifying advertising. Yet defining green marketing is not a simple task where several meanings intersect and contradict each other; an example of this will be the existence of varying social, environmental and retail definitions attached to this term. Other similar terms used are environmental and ecological marketing. The green marketing function is a very wide one. It must encompass all the operations and activities of the firm, emphasis the life cycle impact of a product and look carefully at an organizations corporate image. It must be involved in setting ecological criteria for product design, it must carefully consider packaging and promotion of products and it should be open and honest about the achievements of the firm from an ecological perspective and be able to demonstrate.

Traditional Approaches to Green MarketingThe 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"Authors such as Peattie (1992) see green marketing as a new variation of traditional marketing techniques and strategies. He defines green marketing as the management process responsible for identifying, anticipating and satisfying the requirements of customers and society, in a profitable and sustainable way. Such an approach mirrors the marginalist type of approaches. Moreover, it is an approach which invites companies to pay lip-service to environmentalism because it never spells our precise ecological criteria. More enlightened commentators such as Codington (1993) see green marketing as requiring two main features:- An environmental perspective which appreciates the effect of corporate actions on the environment; and Environmental commitment where the organization resolves to become an environmental steward and to reflect that posture in all its actions.Thus such a green marketing approach must be consistent with the aims and strategies of environmental management techniques including the introduction of an environmental policy, an environmental improvement programme and environmental education. However, in keeping with arguments we must therefore argue that traditional approaches to green marketing are less likely to be compatible with the techniques of ecological management and the strategies required to bring about a sustainable future.Principles of green marketing Green marketing is based on a number of principles some of which are mentioned below:-1. Emphasis on renewable resources and increase the demand of renewable resources in the market:- green marketing can make a difference by building total consumer demand for renewable and ultimately increasing the supply of renewable in the market place.

2. Fully disclose product contents and provide information to allow product verification:- In the absence of uniform public disclose portfolio contents, green marketers should voluntarily disclose portfolio contents to consumers, including percentages of emerging renewable resources, in all product advertisements and billing statements to the maximum extent practicable. Marketers should also provide all necessary information to government agencies and private organizations seeking to verify those claims. Otherwise; it will be difficult, if not impossible for consumers to know what they are purchasing and for interested parties to verify green claims.

3. Do not charge excessive prices:- Reasonable prices for renewable energy products would be a natural outcome of a market that is vibrantly competitive and in which consumers have good information and where consumers have choices, informed consumers can be trusted to decide whether product benefits are worth the price. However many consumers are unaware that the cost of some renewable resources have fallen dramatically in the last decade, and it excessive prices are charged for renewable energy it will give the public the impression that renewable cost more than they actually do, which could decrease support for public policies promoting renewable and reduce the size of the market for renewable. Green marketers should not chare prices that are clearly out of proportion to the actual cost of renewable energy.

4. Consumers should be informed about the pricing policies:- To encourage a market in green consumers must have information that allows them to comparison shop among all suppliers on the basis of the costs and the environmental characteristics of the resource portfolio. Without uniform disclosure requirements, the burden will fall on green marketers to investigate their competitors portfolios and educate consumers about them..a difficult and expensive task. Even then, consumers may be mistrustful of green claims.

5. Public policies:- Encouraging individuals to take responsibility for the environmental impacts caused by their own personal consumption is an important element or moving to a more sustainable use of resources.

Three keys to successful green marketing:-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.Benefits and adoption of Green MarketingCompanies that develop new and improved products and services with 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. 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

Ecological Approaches to Green Marketing We have argued that green marketing ought to represent a discrete shift in emphasis away from traditional approaches which put stress on criteria aspects of a product towards an ethical approach which takes a holistic view of the product from cradle to grave and considers the context in which it is produced. Green marketing is about the provision of information along with advice on how to use the product successfully and advice on the re-use, repair, recyclability and disposal of the product. It therefore represents product stewardship at its best. It aims not only to meet the needs of the consumer but considers all stakeholders. The most important lesson to be learned from the stakeholder concept is that co-operation is as important as competition. Trust relations have to be developed with stakeholders and this is best built up by honesty and openness. Green marketing cannot be looked at in isolation. The effect of launching a new product or re-orienting an existing one to have superior environmental attributes will have ramifications for procurement, finance, human resources, production processes and delivery. The fundamental key to a green marketing strategy is to approach the problem in a systematic way, undertaking thorough research and planning. The logistics by which a company improves its environmental performance will depend in part on its functional organizations, its geographical spread and its markets. Within the marketing mix there are a number of priorities, which need to be addressed, as identified in the following checklist:-1. Corporate Policy:- Green marketing is as much about marketing the organization for any of its products. It is not good that producing a product with superior environmental degradation. There is therefore a need to ensure that the organization has in place appropriate ecological management strategies and that it is committed to moving towards sustainability.2. Product Policy:- Products should be designed with sustainability in mind. In particular they should minimize the use of non-renewable resources and be designed for dis-assembly and recyclability. Products with clear environment attributes can be labeled as such but it is important not to overstate or be dishonest about the environmental aspects of the product. More importantly, a product stewardship approach should accompany the sale of the product ensuring that the customer uses the product as it is intended.3. Packaging:- Packaging should be designed which, whilst fit for its purpose, uses the minimum amount of materials. Use should be made of packaging materials which do less damage to the environment and the company should arrange for packaging to be recycled or taken back and where possible re used. Excess packaging used as promotional material is unethical and not in the spirit of sustainability.4. Promotion Policy:- Promotion should highlight the environmental credentials of both the organization and its products or services. The environment reputation of the firm may be enhanced by public relations and advertising exercises but all claims must be credible, honest and true.5. Transportation and distribution:- Preference should be given to transportation systems which reduced environmental costs in terms of energy consumption and pollution(widely defined). Where appropriate, distribution channels should be established between the producer, wholesalers, retailers and customers who minimize transportation and packaging needs. These same systems can also be used to ensure that used products and packaging can be recycled.6. Quality and effectiveness:- Quality is part of the environmental profile of a product. Quality goods last longer, break down less frequently, are worth repairing and often use less energy in their use. It is important that any environmental attributes do not detract from quality or the effectiveness of the product. If this is not possible then that fact should be clearly explained to the consumer. Ecological management requires a move away from quantity and towards quality.7. Personal Policy:- Commitment is at the heart of a proactive strategy for sustainable development and it is important to ensure that the whole workforce is sensitive to environmental improvement. Awareness of the importance of the environment should be enhanced by training and education and there should be employee reward scheme which improve the environmental performance of the organization.8. Environmental information system:- The organization must ensure that there is an adequate environmental monitoring system, which is capable of identifying potential and real problems. Suppliers must be made aware of corporate requirements and must have their own strategies, which are consistent with the organizations environmental policy. The organization must collect relevant information so that it can be responsive to stakeholders.9. Education, Communications and Product stewardship:- Linked closely with environmental information systems there must be a clear strategy for communication with consumers, which will include education about the product they are using and how to use it more effectively, advice on what to do after the product has been used and an element of wider education and campaigning in the context of sustainable development.10. Pricing Policy:- If environmental measures cost extra money then this can be passed on to the consumer making it clear that the price differential is a result of environmental improvements. If costs are reduced through environmental measures then it is ethical not to be completely honest in cutting prices or considering discounts to those who can match the organizations own environmental performance.By these ten elements of green marketing strategy outline above will move the organization towards a more sustainable strategy because it must be remembered that the marketing function does not exist in isolation and that no positive environmental claims can be made unless the whole organization is functioning along the lines of a sound environmental management system.

Green marketing cases Case-1-Phillips's "Marathon" CFL light bulbPhilips 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. Car sharing servicesCar-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 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 Zip Car (East Coast), I-GO Car (Chicago), Flex Car (Washington State), and Hour Car (Twin Cities).

Electronics sectorThe 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.Products & ServicesNow 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.Case-2: NDTC: The need to be eco friendly is across the entire spectrum of activities. This need is greatly influenced by consumer-forums and judiciary. To take an example when Supreme Court ordered the Delhi Government to examine ways and means to reduce pollution in Delhi, it asked the government to introduce clean fuel like CNG in public transport system. This put pressure on petroleum companies for launching clean fuels with low sulphur content and led free petrol. Also the only CNG supply company, Indraprastha Gas Ltd, had to increase its supply. The vehicles had to made appropriate changes. This led to Delhi Transport Corporation becoming the largest CNG powered transport system in the country. Today Indraprastha Gas has 121 CNG distribution stationin Delhi with a combine capacity of 16.47 lakhs kg gas per day, catering to about 90000 vehicles. This growing concern for the environment led to development in oil and gas exploration, refining and marketing. It also spurred development in the automobile sector which manufactured vehicles that could run on CNG fuel. Also the vehicles have to conform to pollution control norms as laid down by the Govt. like Bharat-III, Ero II.Case-3: Surf-excel:-Some kids in Mumbais Bainganwadi slums are grateful to Surf-Excel, the Rs 485cr brand which introduce a feel-good marketing campaign-The Surf Excel 10/10 drive. This saw the surf excel buyers in the four cities of Mumbai, Delhi, Bangalore and Kolkata SM Sing an amount to HLL (now HUL). The company in turn donates that amount to an NGO that was involved in educating underprivileged children.Case-4 Tata salt:- very recently Tata has launched a campagain trough TV advertising that if you will purchase Tata salt, a significant percent of profit per pack would be contributed towards the education of underprivileged children of the slums.

Challenges Ahead:-1. Green products require renewable and recyclable material, which is costly2. Requires a technology, which requires huge investment in R & D3.Water treatment technology, which is too costly4.Majority of the people are not aware of green products and their uses5. Majority of the consumers are not willing to pay a premium for green productsConclusion:-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. we must find an opportunity to enhance our product's performance and strengthen our 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. The green marketers must understand the fact that they have to satisfy two objectives: improved environmental quality and customer satisfaction.

Reference1. Environmental management.BY:- UBEROI N.K. Second Edition :-(2003) 2.INTERNET:-a) http://en.wikipedia.org/wiki/green _marketingb) http://www.greenmarketing.com/files/stafford_myopiajune06pdfc) http://sbinfocanada.about.com/od/marketing greenmarketing.hlmd) www.netmba.com.3. Personal Notes.