SOU

RAV

RA

INA

2011

GR

EEN

MA

RK

ETIN

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LOVELY INSTITUTE OF MANAGEMENTLOVELY PROFESSIONAL UNIVERSITY

REPORTON

GREEN MARKETING

SUBMITTED TO: - SUBMITTED BY:-

Mr. BHAVDEEP KOCHAR Mr. SOURAV RAINALOVELY INSTITUTE OF MANAGEMENT RT1903 A65

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DECLARATION

I hereby declare that this dissertation report entitled “Green Marketing” has been

carried out by me, SOURAV RAINA, a student of MBA (Marketing) in LOVELY

INSTITUTE OF MANAGEMENT, LOVELY PROFESSIONAL UNIVERSITY,

holding Enrollment Number RT1903 A65. The report confirms to course regulations

regarding cheating and plagiarism.

I declare that no material contained within this assignment has been used in any other

submission, by the author, for an academic award.

I further declare that the information presented in this project is true and original to the

best of my knowledge.

SOURAV RAINA

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ACKNOWLEDGEMENT

I take this opportunity to thank all those related directly or

indirectly for the completion of this dissertation successfully. I am

grateful to Mr. BHAVDEEP KOCHER, Lecturer (LIM), who has

been very helpful and supportive whenever I approached him

throughout the project.

I express my sincere gratitude to our honorable DEAN , for

her valuable support as and when required which enabled me to

complete my dissertation within the stipulated time. I am also

thankful to all members and staff of LOVELY INSTITUTE OF

MANAGEMENT, LOVELY PROFESSIONAL UNIVERSITY and my

friends for their kind co-operation through out the work.

SOURAV RAINA

MBA (Marketing)

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PREFACE

Although environmental issues influence all human activities, few academic disciplines

have integrated green issues into their literature. This is especially true of marketing. As

society becomes more concerned with the natural environment, businesses have begun to

modify their behavior in an attempt to address society's "new" concerns. Some businesses

have been quick to accept concepts like environmental management systems and waste

minimization, and have integrated environmental issues into all organizational activities.

Some evidence of this is the development of journals such as "Business Strategy and the

Environment" and "Greener Management International," which are specifically designed

to disseminate research relating to business' environmental behavior.

One business area where environmental issues have received a great deal of

discussion in the popular and professional press is marketing. Terms like "Green

Marketing" and "Environmental Marketing" appear frequently in the popular press. Many

governments around the world have become so concerned about green marketing

activities that they have attempted to regulate them. For example, in the United States

(US) the Federal Trade Commission and the National Association of Attorneys-General

have developed extensive documents examining green marketing issues. One of the

biggest problems with the green marketing area is that there has been little attempt to

academically examine environmental or green marketing. While some literature does

exist, it comes from divergent perspectives.

This report will attempt to:

Introduce the terms and concepts of green marketing;

Briefly discuss why going green is important;

Examine some of the reason that organizations are adopting a green marketing

philosophy; and

Mention some of the problems with green marketing.

Find out ways to improve consumer appeal for environmentally preferable

products through different marketing strategies.

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TABLE OF CONTENTS

DECLARATION

CERTIFICATE

ACKNOWLEDGEMNET

PREFACE

No. Chapter Name

1. INTRODUCTION TO GREEN MARKETING

2. GREEN MARKETING MYOPIA

3. REVIEW OF LITERATURE

4. HOW TO DO GREEN MARKETING

5. STRATEGIES AND ADVANTEGES OF GREEN MARKETING

6. CONCLUSION

7. REFERENCES

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INTRODUCTION

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 first wave of Green Marketing occurred in the 1980s. 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.

In the years after 2000 a second wave of Green marketing emerged. By now CSR and the

Triple Bottom Line (TBL) were widespread. Such publications as a 2005 United Nations

Report, then in 2006 a book by Al Gore and the UK Stern Report brought scientific-

environmental arguments to a wide public in an easy to understand way. This knowledge

assessed the implications of moving to a low-carbon global economy and the potential of

different approaches. This new wave of Green Marketing differed from the first wave in

many respects. It is curious to note that Green Marketing Wave 1 followed an economic

recession, whereas Green Marketing Wave 2 came before the global recessions that come

to be known as the “Credit Crunch”. This difference may be significant in that it may

suggest that Green Marketing is here to stay. The green marketing concept dictates,

amongst other things, less use, recycling and avoiding waste, just some of the ways

society reacts at times of recession. (see Bradley 2003 for 6 green marketing strategies).

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According to Jacquelyn Ottman, (author of Green Marketing: Opportunity for

Innovation) 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 consensus -- by consumers,

marketers, activists, regulators, and influential people -- has 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

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A GREEN MARKET IN NEWCASTLE

A GREEN MARKET IN NEWYORK

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WHAT IS GREEN MARKETING?

Unfortunately, a majority of people believe that 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. For

example, around the world there are resorts that are beginning to promote themselves as

"ecotourist" facilities, i.e., facilities that "specialize" in experiencing nature or operating

in a fashion that minimizes their environmental impact.

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. Indeed the

terminology used in this area has varied, it includes: Green Marketing, Environmental

Marketing and Ecological Marketing. While green marketing came into prominence in

the late 1980s and early 1990s, it was first discussed much earlier. 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". Since that time a number of other books on

the topic have been published.

The AMA workshop attempted to bring together academics, practitioners, and

public policy makers to examine marketing's impact on the natural environment. At this

workshop ecological marketing was defined as:

“The study of the positive and negative aspects of marketing activities on

pollution, energy depletion and non-energy resource depletion.”

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This early definition has three key components –

1) It is a subset of the overall marketing activity;

2) It examines both the positive and negative activities; and

3) A narrow range of environmental issues are examined.

While this definition is a useful starting point, to be comprehensive green

marketing needs to be more broadly defined. Before providing an alternative definition it

should be noted that no one definition or terminology has been universally accepted. This

lack of consistency is a large part of the problem, for how can any issue be evaluated if

all researchers have a different perception of what they are researching. The following

definition is much broader than those of other researchers and it encompasses all major

components of other definitions. The definition is –

“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 detrimental impact on the

natural environment.”

This definition incorporates much of the traditional components of the marketing

definition that is "All activities designed to generate and facilitate any exchanges

intended to satisfy human needs or wants". Therefore it ensures that the interests of the

organization and all its consumers are protected, as voluntary exchange will not take

place unless both the buyer and seller mutually benefit. The above definition also

includes the protection of the natural environment, by attempting to minimize the

detrimental impact this exchange has on the environment. This second point is important,

for human consumption by its very nature is destructive to the natural environment. (To

be accurate products making green claims should state they are "less environmentally

harmful" rather than "Environmentally Friendly.") Thus green marketing should look

at minimizing environmental harm, not necessarily eliminating it.

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WHAT ARE “GREEN PRODUCTS”

OR

“ENVIRONMENTAL PRODUCTS”

Although no consumer product has a zero impact on the environment, in business,

the terms “green product” and “environmental product” are used commonly to describe

those that strive to protect or enhance the natural environment by conserving energy

and/or resources and reducing or eliminating use of toxic agents, pollution, and waste.

Greener, more sustainable products need to dramatically increase the productivity

of natural resources, follow biological/ cyclical production models, encourage

dematerialization, and reinvest in and contribute to the planet’s “natural” capital.

Escalating energy prices, concerns over foreign oil dependency, and calls for energy

conservation are creating business opportunities for energy-efficient products, clean

energy, and other environmentally sensitive innovations and products.

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ONE OF THE MOST COMMONLY USED GREEN PRODUCTS – THE PHILIPS CFL

WHY IS GREEN MARKETING IMPORTANT?

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.”

Thus mankind has limited resources on the earth, with which she/he must attempt

to provide for the worlds' unlimited wants. In market societies where there is "freedom

of choice", it has generally been accepted that individuals and organizations have the

right to attempt to have their wants satisfied. As firms face limited natural resources, they

must develop new or alternative ways of satisfying these unlimited wants. Ultimately

green marketing 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.

THE SYMBOL USED TO DENOTE RECYCLABLE ITEMS

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BENEFITS OF GREEN MARKETING

WHY ARE FIRMS USING GREEN MARKETING?

When looking through the literature there are several suggested reasons for firms

increased use of Green Marketing. Five possible reasons cited are:

1. Organizations perceive environmental marketing to be an opportunity that can be

used to achieve its objectives;

2. Organizations believe they have a moral obligation to be more socially

responsible;

3. Governmental bodies are forcing firms to become more responsible;

4. Competitors' environmental activities pressure firms to change their

environmental marketing activities; and

5. Cost factors associated with waste disposal, or reductions in material usage forces

firms to modify their behavior.

DELHI’S FAMOUS CNG AUTORICKSHAW

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1. OPPORTUNITIES

It appears that all types of consumers, both individual and industrial are becoming

more concerned and aware about the natural environment. In a 1992 study of 16

countries, more than 50% of consumers in each country, other than Singapore, indicated

they were concerned about the environment. A 1994 study in Australia found that 84.6%

of the sample believed all individuals had a responsibility to care for the environment. A

further 80% of this sample indicated that they had modified their behavior, including

their purchasing behavior, due to environmental reasons. As demands change, many

firms see these changes as an opportunity to be exploited.

Given these figures, it can be assumed that firms marketing goods with

environmental characteristics will have a competitive advantage over firms marketing

non-environmentally responsible alternatives. There are numerous example of firms who

have strived to become more environmentally responsible, in an attempt to better satisfy

their consumer needs.

McDonald's replaced its clam shell packaging with waxed paper because of

increased consumer concern relating to polystyrene production and Ozone

depletion.

Tuna manufacturers modified their fishing techniques because of the increased

concern over driftnet fishing, and the resulting death of dolphins.

Xerox introduced a "high quality" recycled photocopier paper in an attempt to

satisfy the demands of firms for less environmentally harmful products.

This is not to imply that all firms who have undertaken environmental marketing

activities actually improve their behavior. In some cases firms have misled consumers in

an attempt to gain market share. In other cases firms have jumped on the green

bandwagon without considering the accuracy of their behavior, their claims, or the

effectiveness of their products. This lack of consideration of the true "greenness" of

activities may result in firms making false or misleading green marketing claims.

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2. 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. This

translates into firms that believe they must achieve environmental objectives as well as

profit related objectives. This results in environmental issues being integrated into the

firm's corporate culture. Firms in this situation can take two perspectives;

1) They can use the fact that they are environmentally responsible as a marketing

tool; or

2) They can become responsible without promoting this fact.

There are examples of firms adopting both strategies. Organizations like the Body

Shop heavily promote the fact that they are environmentally responsible. While this

behavior is a competitive advantage, the firm was established specifically to offer

consumers environmentally responsible alternatives to conventional cosmetic products.

This philosophy is directly tied to the overall corporate culture, rather than simply being a

competitive tool.

An example of a firm that does not promote its environmental initiatives is Coca-

Cola. They have invested large sums of money in various recycling activities, as well as

having modified their packaging to minimize its environmental impact. While being

concerned about the environment, Coke has not used this concern as a marketing tool.

Thus many consumers may not realize that Coke is a very environmentally committed

organization.

Another firm who is very environmentally responsible but does not promote this

fact, at least outside the organization, is Walt Disney World (WDW). WDW has an

extensive waste management program and infrastructure in place, yet these facilities are

not highlighted in their general tourist promotional activities.

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SOME COMPANIES THAT USE GREEN MARKETING AS SOCIAL

RESPONSIBILITY.

3. GOVERNMENTAL PRESSURE

As with all marketing related activities, governments want to "protect" consumers

and society; this protection has significant green marketing implications. Governmental

regulations relating to environmental marketing are designed to protect consumers in

several ways,

1) Reduce production of harmful goods or by-products;

2) Modify consumer and industry's use and/or consumption of harmful goods; or

3) Ensure that all types of consumers have the ability to evaluate the

environmental composition of goods.

Governments establish regulations designed to control the amount of hazardous

wastes produced by firms. Many by-products of production are controlled through the

issuing of various environmental licenses, thus modifying organizational behavior. In

some cases governments try to "induce" final consumers to become more responsible. For

example, some governments have introduced voluntary curb-side recycling programs,

making it easier for consumers to act responsibly. In other cases governments tax

individuals who act in an irresponsible fashion. For example in Australia there is a higher

gas tax associated with leaded petrol.

One of the more recent publicized environmental regulations undertaken by

governments has been the establishment of guidelines designed to "control" green

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marketing claims. These regulations include the Australian Trade Practices Commission's

(TPC) "Environmental Claims in Marketing - A Guideline, the US Federal Trade

Commission's (FTC) "Guides for the Use of Environmental Marketing Claims" and the

regulations suggested by the National Association of Attorneys-General. These

regulations are all designed to ensure consumers have the appropriate information which

would enable them to evaluate firm's environmental claims. In addition to these

guidelines many States in the US have introduced legislation to control various

environmental marketing activities. In most cases these State laws are more stringent than

the FTC's guidelines. To date the majority of prosecutions of firms using misleading

green marketing has occurred in State rather than Federal courts.

Thus governmental attempts to protect consumers from false or misleading claims

should theoretically provide consumers with the ability to make more informed decisions.

In Australia where regulations have affected many companies, one unintended casualty

was an advertisement for the Federal Government's environmental labeling program

"Environmental Choice." This ad was deemed to breach the TPC's guidelines, as it

implied that only products with the logo were environmentally responsible.

4. 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 competitive pressure has caused an entire industry to modify and thus reduce its

detrimental environmental behavior. 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.

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5. COST OR PROFIT ISSUES

Firms may also use green marketing in an attempt to address cost or profit related

issues. Disposing of environmentally harmful by-products, such as polychlorinated

biphenyl (PCB) contaminated oil are becoming increasingly costly and in some cases

difficult. Therefore firms that can reduce harmful wastes may incur substantial cost

savings. When attempting to minimize waste, firms are often forced to re-examine their

production processes. In these cases they often develop more effective production

processes that not only reduce waste, but reduce the need for some raw materials. This

serves as a double cost savings, since both waste and raw material are reduced.

In other cases firms attempt to find end-of-pipe solutions, instead of minimizing

waste. In these situations firms try to find markets or uses for their waste materials, where

one firm's waste becomes another firm's input of production. One Australian example of

this is a firm who produces acidic waste water as a by-product of production and sells it

to a firm involved in neutralizing base materials.

The last way in which cost or profit issues may affect firms' environmental

marketing activities is that new industries may be developed. This can occur in two ways:

1) A firm develops a technology for reducing waste and sells it to other firms; or

2) A waste recycling or removal industry develops.

For example, firms that clean the oil in large industrial condensers increase the

life of those condensers, removing the need for replacing the oil, as well as the need to

dispose of the waste oil. This reduces operating costs for those owning the condensers

and generates revenue for those firms cleaning the oil.

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SOME PROBLEMS WITH GOING GREEN

No matter why a firm uses green marketing there are a number of potential

problems that they must overcome. One of the main problems is that firms using green

marketing must ensure that their activities are not misleading to consumers or industry,

and do not breach any of the regulations or laws dealing with environmental marketing.

For example marketers in the US must ensure their green marketing claims can meet the

following set of criteria, in order to comply with the FTC's guidelines. Green marketing

claims must;

Clearly state environmental benefits;

Explain environmental characteristics;

Explain how benefits are achieved;

Ensure comparative differences are justified;

Ensure negative factors are taken into consideration; and

Only use meaningful terms and pictures.

Another problem firm’s face is that those who modify their products due to

increased consumer concern must contend with the fact that consumers' perceptions are

sometimes not correct. Take for example the McDonald's case where it has replaced its

clam shells with plastic coated paper. There is ongoing scientific debate which is more

environmentally friendly. Some scientific evidence suggests that when taking a cradle-to-

grave approach, polystyrene is less environmentally harmful. If this is the case

McDonald's bowed to consumer pressure, yet has chosen the more environmentally

harmful option.

When firms attempt to become socially responsible, they may face the risk that

the environmentally responsible action of today will be found to be harmful in the future.

Take for example the aerosol industry which has switched from CFCs

(chlorofluorocarbons) to HFCs (hydrofluorocarbons) only to be told HFCs are also a

greenhouse gas. Some firms now use DME (dimethyl ether) as an aerosol propellant,

which may also harm the ozone layer. Given the limited scientific knowledge at any point

in time, it may be impossible for a firm to be certain they have made the correct

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environmental decision. This may explain why some firms, like Coca-Cola and Walt

Disney World, are becoming socially responsible without publicizing the point. They

may be protecting themselves from potential future negative backlash; if it is determined

they made the wrong decision in the past.

While governmental regulation is designed to give consumers the opportunity to

make better decisions or to motivate them to be more environmentally responsible, there

is difficulty in establishing policies that will address all environmental issues. For

example, guidelines developed to control environmental marketing address only a very

narrow set of issues, i.e., the truthfulness of environmental marketing claims. If

governments want to modify consumer behavior they need to establish a different set of

regulations. Thus governmental attempts to protect the environment may result in a

proliferation of regulations and guidelines, with no one central controlling body.

Reacting to competitive pressures can cause all "followers" to make the same

mistake as the "leader." A costly example of this was the Mobil Corporation who

followed the competition and introduced "biodegradable" plastic garbage bags. While

technically these bags were biodegradable, the conditions under which they were

disposed did not allow biodegradation to occur. Mobil was sued by several US states for

using misleading advertising claims. Thus blindly following the competition can have

costly ramifications.

The push to reduce costs or increase profits may not force firms to address the

important issue of environmental degradation. End-of-pipe solutions may not actually

reduce the waste but rather shift it around. While this may be beneficial, it does not

necessarily address the larger environmental problem, though it may minimize its short

term affects. Ultimately most waste produced will enter the waste stream, therefore to be

environmentally responsible organizations should attempt to minimize their waste, rather

than find "appropriate" uses for it.

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GREEN HOUSE GASES AND THEIR SOURCES

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CHAPTER - 2

GREEN MARKETING MYOPIA

AN EXAMPLE OF GREEN MARKETING MYOPIA

In 1994, Philips launched the “EarthLight,” a super energy-efficient compact

fluorescent light (CFL) bulb designed to be an environmentally preferable substitute for

the traditional energy-intensive incandescent bulb. The CFL’s clumsy shape, however,

was incompatible with most conventional lamps, and sales languished. After studying

consumer response, Philips reintroduced the product in 2000 under the name “Marathon,”

to emphasize the bulb’s five year life. New designs offered the look and versatility of

conventional incandescent light bulbs and the promise of more than $20 in energy

savings over the product’s life span compared to incandescent bulbs.

PHILIPS MARATHON BULBS

The new bulbs were also certified by the U.S. Environmental Protection Agency’s

(EPA) Energy Star label. Repositioning CFL bulbs’ features into advantages that

resonated with consumer values—convenience, ease-of-use, and credible cost savings—

ultimately sparked an annual sales growth of 12 percent in a mature product market.

Philips’ experience provides a valuable lesson on how to avoid the common

pitfall of “green marketing myopia.” Philips called its original entry “EarthLight” to

communicate the CFL bulbs’ environmental advantage. While noble, the benefit appealed

to only the deepest green niche of consumers. The vast majority of consumers, however,

will ask, “If I use ‘green’ products, what’s in it for me?” In practice, green appeals are not

likely to attract mainstream consumers unless they also offer a desirable benefit, such as

cost-savings or improved product performance. To avoid green marketing myopia,

25

marketers must fulfill consumer needs and interests beyond what is good for the

environment.

Thus we see how green marketing myopia was faced by the Philips while trying

to bring into market the environment friendly light bulbs.

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WHAT IS 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 “green marketing myopia”. In 1960, Harvard business

professor Theodore Levitt introduced the concept of “marketing myopia” in a now-

famous and influential article in the Harvard Business Review. In it, he characterized the

common pitfall of companies’ tunnel vision, which focused on “managing products” (that

is, product features, functions, and efficient production) instead of “meeting customers’

needs” (that is, adapting to consumer expectations and anticipation of future desires).

Levitt warned that a corporate preoccupation on products rather than consumer

needs was doomed to failure because consumers select products and new innovations that

offer benefits they desire. Research indicates that many green products have failed

because of green marketing myopia—marketers’ myopic focus on their products’

“greenness” over the broader expectations of consumers or other market players (such as

regulators or activists).

For example, partially in response to the 1987 Montreal Protocol, in which

signatory countries (including the United States) agreed to phase out ozone depleting

27

chlorofluorocarbons (CFCs) by 2000, Whirlpool (in 1994) launched the “Energy Wise”

refrigerator, the first CFC free cooler and one that was 30 percent more efficient than the

U.S. Department of Energy’s highest standard. For its innovation, Whirlpool won the

“Golden Carrot,” a $30 million award package of consumer rebates from the Super-

Efficient Refrigerator Program, sponsored by the Natural Resources Defense Council and

funded by electric utilities. Unfortunately, Energy Wise’s sales languished because the

CFC-free benefit and energy-savings did not offset its $100 to $150 price premium,

particularly in markets outside the rebate program, and the refrigerators did not offer

additional features or new styles that consumers desired.

General Motors (GM) and Ford encountered similar problems when they

launched their highly publicized EV-1 and Think Mobility electric vehicles, respectively,

in the late 1990s to early 2000s in response to the 1990 zero emission vehicle (ZEV)

regulations adopted in California. Both automakers believed their novel two-seater cars

would be market successes (GM offered the EV-1 in a lease program, and Ford offered

Think Mobility vehicles as rentals via the Hertz car-rental chain). Consumers, however,

found electric vehicles’ need for constant recharging with few recharging locations too

inconvenient. Critics charged that the automakers made only token efforts to make

electric cars a success, but a GM spokesperson recently explained, “We spent more than

$1 billion to produce and market the vehicle, [but] fewer than 800 were leased.” Most

drivers were not willing to drastically change their driving habits and expectations to

accommodate electric cars, and the products ultimately were taken off the market.

Aside from offering environmental benefits that do not meet consumer

preferences, green marketing myopia can also occur when green products fail to

provide credible, substantive environmental benefits.

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Example – MOBIL’S HEFTY PHOTODEGRADABLE PLASTIC

TRASH BAGS

Mobil’s Hefty photodegradable plastic trash bag is a case in point. Introduced in

1989, Hefty packages prominently displayed the term “degradable” with the explanation

that a special ingredient promoted its decomposition into harmless particles in landfills

“activated by exposure to the elements” such as sun, wind, and rain. Because most

garbage is buried in landfills that allow limited exposure to the elements, making

degradation virtually impossible, the claim enraged environmentalists. Ultimately, seven

state attorneys general sued Mobil on charges of deceptive advertising and consumer

fraud. Mobil removed the claim from its packaging and vowed to use extreme caution in

making environmental claims in the future.

It has been found that the top reasons consumers do not buy green products

included beliefs that they require sacrifices—inconvenience, higher costs and lower

performance— without significant environmental benefits. Ironically, despite what

consumers think, a plethora of green products available in the marketplace are in fact

desirable because they deliver convenience, lower operating costs, and/or better

performance. Often these are not marketed along with their green benefits, so consumers

do not immediately recognize them as green and form misperceptions about their

benefits. When consumers are convinced of the desirable “non-green” benefits of

environmental products, they are more inclined to adopt them.

Other environmental products have also scored market successes by either serving

profitable niche markets or offering mainstream appeal.

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Example – TOYOTA PRIUS

Consider the Toyota Prius, the gas-electric hybrid vehicle that achieves about 44

miles per gallon of gasoline. In recent years, Toyota’s production has hardly kept pace

with the growing demand, with buyers enduring long waits and paying thousands above

the car’s sticker price. Consequently, other carmakers have scrambled to launch their own

hybrids. However, despite higher gas prices, analysts assert that it can take 5 to 20 years

for lower gas expenses to offset many hybrid cars’ higher prices. Thus, economics alone

cannot explain their growing popularity.

Analysts offer several reasons for the Prius’ market demand. Initially, the buzz

over the Prius got a boost at the 2003 Academy Awards when celebrities such as

Cameron Diaz, Harrison Ford, Susan Sarandon, and Robin Williams abandoned stretch

limousines and oversized sport utility vehicles, arriving in Priuses to symbolize support

for reducing America’s dependence on foreign oil. Since then, the quirky-looking Prius’

badge of “conspicuous conservation” has satisfied many drivers’ desires to turn heads

and make a statement about their social responsibility, among them Google founders

Larry Page and Sergey Brin, columnist Arianna Huffington, comic Bill Maher, and

Charles, Prince of Wales. The Prius ultimately was named Motor Trend’s Car of the Year

in 2004. The trendy appeal of the Prius illustrates that some green products can leverage

consumer desires for being distinctive. Others say the Prius is just fun to drive—the

dazzling digital dashboard that offers continuous feedback on fuel efficiency and other

car operations provides an entertaining driving experience. More recently, however, the

Prius has garnered fans for more practical reasons. A 2006 Maritz Poll finds that owners

purchased hybrids because of the convenience of fewer fill-ups, better performance, and

the enjoyment of driving the latest technology. In some states, the Prius and other high-

mileage hybrid vehicles, such as Honda’s Insight, are granted free parking and solo-

occupancy access to high occupancy vehicle (HOV) lanes. In sum, hybrid vehicles offer

consumers several desirable benefits that are not necessarily “green” benefits.

30

TOYOTA PRIUS

Many environmental products have become so common and widely

distributed that many consumers may no longer recognize them as green because

they buy them for non-green reasons. Green household products, for instance, are

widely available at supermarkets and discount retailers, ranging from energy-saving Tide

Coldwater laundry detergent to non-toxic Method and Simple Green cleaning products.

Use of recycled or biodegradable paper products (such as plates, towels, napkins, coffee

filters, computer paper,and other goods) is also widespread. Organic and rainforest-

protective “shade grown” coffees are available at Starbucks and other specialty stores and

supermarkets. Organic baby food is expected to command 12 percent market share in

2006 as parents strive to protect their children’s mental and physical development.

Indeed, the organic food market segment has increased 20 percent annually since 1990,

five times faster than the conventional food market, spurring the growth of specialty

retailers such as Whole Foods Market and Wild Oats. Wal-Mart, too, has joined this

extensive distribution of organic products. Indeed, Wal-Mart has recently declared that in

North American stores, its non-farm-raised fresh fish will be certified by the Marine

Stewardship Council as sustainably harvested.

Super energy-efficient appliances and fixtures are also becoming popular. Chic,

front-loading washing machines, for example, accounted for 25 percent of the market in

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2004, up from 9 percent in 2001. EPA’s Energy Star label, which certifies that products

consume up to 30 percent less energy than comparable alternatives, is found on products

ranging from major appliances to light fixtures to entire buildings (minimum efficiency

standards vary from product to product). The construction industry is becoming

increasingly green as government and industry demand office buildings that are “high

performance” (for example, super energy- and resource-efficient and cost effective) and

“healthy” for occupants (for example, well-ventilated; constructed with materials with

low or no volatile organic compounds [VOC]). The U.S. Green Building Council’s

“Leadership in Energy and Environmental Design” (LEED) provides a rigorous rating

system and green building checklist that are rapidly becoming the standard for

environmentally sensitive construction.

Home buyers are recognizing the practical long-term cost savings and comfort of

natural lighting, passive solar heating, and heat-reflective windows, and a 2006 study

sponsored by home improvement retailer Lowe’s found nine out of ten builders surveyed

are incorporating energy-saving features into new homes. Additionally, a proliferation of

“green” building materials to serve the growing demand has emerged. Lowe’s competitor

The Home Depot is testing an ‘EcoOptions’ product line featuring natural fertilizers and

mold resistant drywall in its Canadian stores that may filter into the U.S. market. In short,

energy efficiency and green construction has become main stream.

The diversity and availability of green products indicate that consumers are not

indifferent to the value offered by environmental benefits. Consumers are buying green

—but not necessarily for environmental reasons. The market growth of organic foods

and energy-efficient appliances is because consumers desire their perceived safety and

money savings, respectively. Thus, the apparent paradox between what consumers

say and their purchases may be explained, in part, by green marketing myopia—a

narrow focus on the greenness of products that blinds companies from considering

the broader consumer and societal desires. A fixation on products’ environmental

merits has resulted frequently in inferior green products (for example, the original

EarthLight and GM’s EV-1 electric car) and unsatisfying consumer experiences.

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CHAPTER - 3

REVIEW OF LITERATURE

33

CHAPTER - 3

REVIEW OF LITERATURE

The research conducted for this report was done purely with the help of interviews

conducted with top officials of five companies. Every company has its own

environmental strategy and thus the efforts made by each company can not be measured

on a common scale. Thus the research is totally based on the interviews conducted which

have been mentioned below. These officials helped me with the research by discussing

their environmental policies and the strategies related to them as to how they reach out

with these strategies to their consumers. This often creates goodwill among the

consumers about the products from these companies. The excerpts from the interviews

have been given below. The companies and the officials who helped in this research were

all from different fields ranging from Information Technology to Telecomm and

Manufacturing to FMCG. The list of the companies and officials is given below:

Suzuki Motorcycles – Mr. Abhishek Sinha, Manager - Human Resource.

Bharti Airtel – Mr. Gaurav Tyagi, Manager – Marketing.

IBM India – Mr. Shantanu Varma, Country Manager.

PepsiCo India – Ms. Anupama Priyadarshini – General Manager.

Kapoor Light Life Style – Mr. P. Rajasekhar – Vice President

The interviews focused mainly on one thing i.e. how the consumer has become aware

about the various hazards in the environment. The consumer today cares about the

environment and likes to go for environment healthy products. Also the companies have

to focus on a greener environment within their infrastructure for the well being of their

own employees.

The interviews were then analyzed and on the basis of this analysis this report was

structured. The excerpts from these interviews are given below.

Mr. Abhishek Sinha, Manager (HR), Suzuki Motorcycles:

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On plant area and production capacity:

“SMIPL manufacturing plant installed in Gurgaon (Haryana) having the annual plant

capacity of 1,75,000 units. We have got total land area of 37 acres and out of which

presently our plant is constructed in 6.5 acres of land and remaining area is left for the

land development and future expansion.”

On the priority given to the cleanliness of the environment at Suzuki Motorcycles:

“At Suzuki, the philosophy of keeping “environment first” is properly percolated

downwards. To comply with all applicable legislations and setting standards thereof

remains only a beginning. We thrive to discover and invent mechanisms for better

environment management systems and it’s a continuous process which is managed by a

separate wing of experts and specialist in the field.”

On any new environmental measures adopted by Suzuki:

“The biggest testimony of Suzuki’s commitments towards “environment first” is seen in

the new plant of Suzuki two wheelers at Gurgaon which is built to be a Zero discharge

plant.”

On the Lighting and material used by Suzuki:

“We have embraced Natural light optimization system and water harvesting systems

besides several other measures to create better and cleaner environment around us. All

packaging material used by Suzuki is re-cycleable. A constant flow of internal

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communication on environment related issues not only creates awareness amongst

employees but also helps in inculcating ‘an environment friendly’ value system.”

On environmental measures taken for the benefit of the employees:

“To take care of the health of all our employees, we maintain all international

parameters and standards for drinking water, treated water, ambient air shop floor,

office and the outside. We keep updating all these standards of health and welfare of

employees through a team of well qualified personnel in the R & D laboratory.”

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Mr. Shantanu Varma, Country Manager, IBM India:

On Challenges, products and softwares developed by IBM for addressing the

environmental issues:

Around the world, there is an increasing awareness that human activity may threaten

delicate ecological systems. From evidence of global warming to concerns about water

and soil toxicity, individuals and groups are asking what they can do to reduce their

environmental impact. We at IBM provide solutions for different organizations facing

ecological problems. The challenges have become clear: the need for clean water and air;

affordable and reliable delivery of energy; the dwindling supply of fossil fuels; the reality

of climate disruption and its implications for future generations.

On the approach adopted by IBM towards a cleaner and greener environment:

At IBM, our approach is twofold: we are working to make our existing products and

processes more efficient for both the environment and for business, while also developing

new innovations that can accelerate the adoption of products and services that have lesser

environmental impact.

On any particular agenda or priority list followed by IBM towards addressing

environmental issues:

Today's energy- and climate-related issues are at the top of our strategic agenda. We

recognise that information technology plays an extremely important role in helping solve

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the myriad of ecological challenges faced by the global society—such as conserving our

scarce resources even as global demand skyrockets, reducing pollution, minimizing the

environmental impact of our activities, and enabling safe and renewable alternative

sources of energy.

On any new ecological services that IBM offers:

We have focused a lot on water related issues because IBM’s Institute for Business Value

conducted a survey of more than 100 public and private sector executives. About 77

percent of respondents said they consider water management “extremely important” to

their organizations, and 71 percent expect, over the next five years, for water to create

more business cost and complexity. Thus we came up with some services that would

address the problems related to water.

Natural Water Resources - Provides sensor data integration, analysis and

visualization to enable the measurement, modeling and management of water

levels, usage and quality in natural water resources.

Water Utilities - Enables water providers to make rapid decisions regarding

business processes and operational efficiency to maximize their return on

investments as well as foresee and quickly respond to contamination issues and

emergencies.

Water Infrastructure - Provides sensing systems for managing water

infrastructure, such as levee oversight management and flood control.

Water Metering - Improves management of water supply and demand by

integrating data between the dozens of stakeholders involved. Provides all

stakeholders with consistent, real-time information to help them work together to

make critical decisions about water supply in a geographic region.

Green Sigma for Water - A business consulting service that identifies where

water is being used, measures and monitors usage, and creates process

improvements to reduce water use. IBM pilots have achieved reductions in water

usage of 30 percent.

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On initiatives taken by IBM for a greener environment:

As part of IBM's Big Green 2.0 initiative, we are continually looking at ways to assist

business in running their IT operations with greater efficiency and sustainability. The

project Big Green tackles the problem of the Global Energy Crisis. Here we address the

problem of energy conservation with the efficient use of IT. We have developed various

software solutions which help the organizations in running their systems by using

minimal energy resources.

39

Ms. Anupama Priyadarshini, General Manager, PepsiCo, India:

On policies adopted by PepsiCo:

PepsiCo India is striding ahead rapidly towards enabling the global vision to be the

world's premier consumer products company focused on convenience foods and

beverages. PepsiCo India seeks to produce healthy financial rewards for investors as it

provide opportunities for growth and enrichment to its employees, business partners and

the communities in which it operates.

On Step taken towards replenishing water as they are more into beverages:

PepsiCo is committed to minimising the impact of its business on the environment and

recognises that corporations can play a key role in using scarce resources such as water

with care and responsibility.

While agriculture utilises the bulk of fresh water in India (83%), industry uses 6% of

which the beverage industry uses but a mere 0.04%. But every drop counts, and PepsiCo

India's primary focus in its beverage and snacks plants has been on conserving water at

each stage of the manufacturing process.

In 2003, PepsiCo India embarked on its quest to achieve positive water balance by

2009. That means PepsiCo India will conserve, recharge, and thus replenish more water

in its plants and in its communities, than the total water it uses to manufacture beverage

products.

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PEPSICO’S WATER BALANCE

On initiatives taken by PepsiCo for waste management:

PepsiCo India continues to strengthen its Solid Waste Management initiatives in

partnership with Exnora, an environmental NGO. This award winning, income generating

partnership currently impacts more than 1,00,000 people in Tamil Nadu, Andhra Pradesh

and Haryana will reach out to more than 2,00,000 people in 2008.

Despite the creation of a detailed policy on Solid Waste Management and Handling rules

in 2000, very few municipalities in the country were able to completely comply with

these rules. PepsiCo India and EXNORA effectively implemented a model project in

Pammal district in Tamil Nadu that adhered to the Government policy on waste

management. The project created a visible difference in the local environment of the

region.

PepsiCo India’s foods division, Frito Lay, also generates biofuels from waste in its plants

thus reducing methane emission and 875 MT of CO2 emission annually, in addition to

achieving 14% reduction in energy use.  New capacity expansion in plants has been

designed to impact further reductions in water, power and fuel.

On PepsiCo’s partnership with farmers:

PepsiCo's involvement in Indian agriculture stems from its vision of creating a cost-

effective, localised agri-base in India by leveraging farmers’ access to world class

agricultural practices. PepsiCo India worked with farmers and State Governments to

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improve agri sustainability, crop diversification and raise farmer incomes.  PepsiCo

helped transform the lives of thousands of farmers by helping them refine their farming

techniques and raise farm productivity, and customized solutions to suit specific

geographies and locations.

The most ambitious project is a joint programme, launched in 1989, between PepsiCo

India, the Punjab Agriculture University (PAU) in Ludhiana and Punjab Agro Industries

Corporation (PAIC) in Chandigarh. The programme focuses on evolving agricultural

practices to help Punjab farmers produce internationally competitive products. Over the

last five years, PepsiCo has also collaborated with the Thapar Institute of Technology to

develop a high quality potato seed programme.

On partnership with TERI(The Energy and Resources Institute):

TERI was established in 1974 with the purpose of tackling and dealing with the immense

and acute problems that mankind is likely to be faced with in the years ahead on account

of the gradual depletion of the earth’s finite energy resources which are largely non-

renewable and on account of the existing methods of their use which are polluting.Over

the years the Institute has developed a wider interpretation of this core purpose and its

application and has created an environment that is enabling for the development of

solutions to global problems in the fields of energy, environment and current patterns of

development, which are largely unsustainable. The Institute has grown substantially over

the years, particularly, since it launched its own research activities and established a base

in New Delhi, its registered headquarters. The central element of TERI’s philosophy has

been its reliance on entrepreneurial skills to create benefits for society through the

development and dissemination of intellectual property. The strength of the Institute lies

in not only identifying and articulating intellectual challenges straddling a number of

disciplines of knowledge but also in mounting research, training and demonstration

projects leading to development of specific problem-based advanced technologies that

help carry benefits to society at large. This association helps us in addressing the

conservation of energy issue.

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Mr. Gaurav Tyagi, Manager (Marketing), Bharti Airtel:

On Airtel’s infrastructure and expansion:

The company is a part of Bharti Enterprises, and is India's leading provider of

telecommunications services. The businesses at Bharti Airtel have been structured into

three individual strategic business units (SBU’s) - mobile services, broadband &

telephone services (B&T) & enterprise services. The mobile services group provides

GSM mobile services across India in 23 telecom circles, while the B&T business group

provides broadband & telephone services in 90 cities. The Enterprise services group has

two sub-units - carriers (long distance services) and services to corporates. All these

services are provided under the Airtel brand.

On initiatives taken towards building a better and greener environment:

We generate e-bills which support the cause “Save Paper”. If a customer doesn’t mind

not receiving bills on paper we send him E-bills on his mail. We try and address as many

customers as possible and try and make them understand that it would be better if they

received e-bills as it would reach them quicker and more importantly save paper and help

the environment. Up till now we have had a great response from the consumers which

show how environment conscious they are.

On any more initiatives taken up by Airtel:

We are a telecom company and so we do not have a lot of initiatives as we don’t need

them but the Bharti Group has a 50:50 Joint Venture with DE Rothscheld. In addition to

being the world’s second largest producer of fresh fruits & vegetables, India is also

amongst the lowest cost producer of farm products. To capitalize on such inherent

43

advantages, FieldFresh Foods plans to employ the world’s best practices and technology

to work towards converting India into a preferred “World Food Basket”. As part of its

commitment to the green field project, the company plans to set up a world-class “Agri

Research Center” and a “Model Farm” in Punjab in the first phase. The state of the art

agri research center will primarily carry out research on hybrid seeds and agro farming

techniques. The research center will work towards the identification and adoption of

conventional and emerging technologies and promote their “On Field” usage to further

enhance agricultural productivity in an environmentally sustainable manner.

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Mr. P. Rajasekhar, Vice President, Kapoor Light Life Style:

On plant area and production capacity:

“We don’t have a manufacturing unit. All our products are imported and then assembled

in our assembling unit. The products that we make are outsourced in various parts to

different vendors who after making those parts send them back to us. After this our

assembling unit takes over and assembles the product as a whole.” We have a work force

of 70 people in our assembling unit in Okhla, New Delhi.”

On the priority given to the cleanliness of the environment at Kapoor Light Life

Style:

“We use dies and colours which are non toxic. Also the materials used are all recyclable.

We also have proper waste disposal facility in our assembly unit and we take it as our

endeavour to keep the environment clean and green.”

On the materials used by Kapoor Light Life Style:

“We are the oldest and most trusted lighting company in India. We understand that our

customer expects us to use the best material and at the same time he is well educated and

thus understands the need of a clean environment. We thus use recyclable and bio

degradable materials only in our products. Our product mainly consist of fabric, metal,

non toxic dies and glass. We DO NOT use plastic in our products. The crystals that we

use are electro statically charged and thus do not allow dust to settle on them.”

On the packing material used:

“We make it a point to use recyclable packing material for our products. These materials

do not harm the environment in any way and are completely environment friendly.”

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46

CHAPTER - 4

HOW TO DO GREEN MARKETING

THE 3 Cs OF MATKETING GREEN PRODUCTS

The analysis of past research and marketing strategies finds that successful green

products have avoided green marketing myopia by following three important principles:

“The Three Cs” of consumer value positioning, calibration of consumer knowledge,

and credibility of product claims.

1. Consumer Value Positioning –

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:

1.1. Efficiency and cost effectiveness;

1.2. Health and safety;

1.3. Performance;

1.4. Symbolism and status; and

1.5. Convenience.

Additionally, when these five consumer value propositions are not inherent in the

green product, successful green marketing programs bundle (that is, add to the product

design or market offering) desirable consumer value to broaden the green product’s

appeal. In practice, the implication is that product designers and marketers need to align

environmental products’ consumer value (such as money savings) to relevant consumer

market segments (for example, cost conscious consumers).

1.1 Efficiency and Cost Effectiveness

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The common inherent benefit of many green products is their potential energy and

resource efficiency. Given sky-rocketing energy prices and tax incentives for fuel-

efficient cars and energy saving home improvements and appliances, long-term savings

have convinced cost-conscious consumers to buy green.

Recently, the home appliance industry made great strides in developing energy

efficient products to achieve EPA’s Energy Star rating. For example, Energy Star

refrigerators use at least 15 percent less energy and dishwashers use at least percent less

energy than do traditional models. Consequently, an Energy Star product often

commands a price premium. Whirlpool’s popular Duet frontloading washer and dryer, for

example, cost more than $2,000, about double the price of conventional units; however,

the washers can save up to 12,000 gallons of water and $110 on electricity annually

compared to standard models (Energy Star does not rate dryers).

Laundry detergents are also touting energy savings. Procter & Gamble’s (P&G)

newest market entry, Tide Coldwater, is designed to clean clothes effectively in cold

water. About 80 to 85 percent of the energy used to wash clothes comes from heating

water. Working with utility companies, P&G found that consumers could save an average

of $63 per year by using cold rather than warm water. Adopting Tide Coldwater gives

added confidence to consumers already washing in cold water. As energy and resource

prices continue to soar, opportunities for products offering efficiency and savings are

destined for market growth.

1.2 Health and Safety

Concerns over exposure to toxic chemicals, hormones, or drugs in everyday

products have made health and safety important choice considerations, especially among

vulnerable consumers, such as pregnant women, children, and the elderly. Because most

environmental products are grown or designed to minimize or eliminate the use of toxic

agents and adulterating processes, market positioning on consumer safety and health can

achieve broad appeal among health-conscious consumers. Sales of organic foods, for

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example, have grown considerably in the wake of public fear over “mad cow” disease;

antibiotic- laced meats, mercury in fish, and genetically modified foods. Mainstream

appeal of organics is not derived from marketers promoting the advantages of free-range

animal ranching and pesticide free soil. Rather, market positioning of organics as

flavorful, healthy alternatives to factory-farm foods has convinced consumers to pay a

premium for them.

A study conducted by the Alliance for Environmental Innovation and household

products-maker S.C. Johnson found that consumers are most likely to act on green

messages that strongly connect to their personal environments. Specifically, findings

suggest that the majority of consumers prefer such environmental household product

benefits as “safe to use around children,” “no toxic ingredients,” “no chemical residues,”

and “no strong fumes” over such benefits as “packaging can be recycled” or “not tested

on animals.” Seventh Generation, a brand of non-toxic and environmentally- safe

household products, derived its name from the Iroquois belief that, “In our every

deliberation, we must consider the impact of our decisions on the next seven

generations.” Accordingly, its products promote the family-oriented value of making the

world a safer place for the next seven generations.

Indoor air quality is also a growing concern. Fumes from paints, carpets,

furniture, and other décor in poorly ventilated “sick buildings” have been linked to

headaches, eye, nose, and throat irritation, dizziness, and fatigue among occupants.

Consequently, many manufacturers have launched green products to reduce indoor air

pollution. Sherwin Williams, for example, offers “Harmony,” a line of interior paints that

is low-odor, zero- VOC, and silica-free. Aside from energy efficiency, health and safety

have been key motivators driving the green building movement.

1.3 Performance

The conventional wisdom is that green products don’t work as well as “non-

green” ones. This is a legacy from the first generation of environmentally sensitive

49

products that clearly were inferior. Consumer perception of green cleaning agents

introduced in health food stores in the 1960s and 1970s, for example, was that “they cost

twice as much to remove half the grime.” Today, however, many green products are

designed to perform better than conventional ones and can command a price premium.

For example, in addition to energy efficiency, front-loading washers clean better and are

gentler on clothes compared to conventional top-loading machines because they spin

clothes in a motion similar to clothes driers and use centrifugal force to pull dirt and

water away from clothes. By contrast, most top-loading washers use agitators to pull

clothes through tanks of water, reducing cleaning and increasing wear on clothes.

Consequently, the efficiency and high performance benefits of top-loading washers

justify their premium prices.

Homeowners commonly build decks with cedar, redwood, or pressure-treated

pine (which historically was treated with toxic agents such as arsenic). Wood requires

stain or paint and periodic applications of chemical preservatives for maintenance.

Increasingly, however, composite deck material made from recycled milk jugs and wood

fiber, such as Weyerhaeuser’s ChoiceDek, is marketed as the smarter alternative.

Composites are attractive, durable, and low maintenance. They do not contain toxic

chemicals and never need staining or chemical preservatives. Accordingly, they

command a price premium — as much as two to three times the cost of pressure-treated

pine and 15 percent more than cedar or redwood.

In sum, “high performance” positioning can broaden green product appeal.

1.4 Symbolism and Status

As mentioned earlier, the Prius, Toyota’s gas-electric hybrid, has come to

epitomize “green chic.” According to many automobile analysts, the cool-kid cachet that

comes with being an early adopter of the quirky-looking hybrid vehicle trend continues to

partly motivate sales. Establishing a green chic appeal, however, isn’t easy. According to

popular culture experts, green marketing must appear grass-roots driven and

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humorous without sounding preachy. To appeal to young people, conservation and

green consumption need the unsolicited endorsement of high-profile celebrities and

connection to cool technology. Prius has capitalized on its evangelical following and

high-tech image with some satirical ads, including a television commercial comparing the

hybrid with Neil Armstrong’s moon landing (“That’s one small step on the accelerator,

one giant leap for mankind”) and product placements in popular Hollywood films and

sitcoms (such as Curb Your Enthusiasm). More automobile analysts, the cool-kid cachet

that comes with being an early adopter of the quirky-looking hybrid vehicle trend

continues to partly motivate sales.

THE GREEN CHIC SYMBOL

In business, where office furniture symbolizes the cachet of corporate image and

status, the ergonomically designed “Think” chair is marketed as the chair “with a brain

and a conscience.” Produced by Steelcase, the world’s largest office furniture

manufacturer, the Think chair embodies the latest in “cradle to cradle” (C2C) design and

manufacturing. C2C, which describes products that can be ultimately returned to

technical or biological nutrients, encourages industrial designers to create products free of

harmful agents and processes that can be recycled easily into new products (such as

metals and plastics) or safely returned to the earth (such as plant-based materials). Made

without any known carcinogens, the Think chair is 99 percent recyclable; it disassembles

with basic hand tools in about five minutes, and parts are stamped with icons showing

recycling options. Leveraging its award-winning design and sleek comfort, the Think

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chair is positioned as symbolizing the smart, socially responsible office. In sum, green

products can be positioned as status symbols.

1.5 Convenience

Many energy-efficient products offer inherent convenience benefits that can be

showcased for competitive advantage. CFL bulbs, for example, need infrequent

replacement and gas-electric hybrid cars require fewer refueling stops—benefits that are

highlighted in their marketing communications. Another efficient alternative to

incandescent bulbs are light emitting diodes (LEDs): They are even more efficient and

longer-lasting than CFL bulbs; emit a clearer, brighter light; and are virtually unbreakable

even in cold and hot weather. LEDs are used in traffic lights due to their high-

performance convenience.

To encourage hybrid vehicle adoption, some states and cities are granting their

drivers the convenience of free parking and solo-occupant access to HOV lanes. A

Toyota spokesperson recently told the Los Angeles Times, “Many customers are telling us

the carpool lane is the main reason for buying now.” Toyota highlights the carpool

benefit on its Prius Web site, and convenience has become an incentive to drive efficient

hybrid cars in traffic- congested states like California and Virginia. Critics have charged,

however, that such incentives clog carpool lanes and reinforce a “one car, one person”

lifestyle over alternative transportation. In response, the Virginia legislature has more

recently enacted curbs on hybrid drivers use of HOV lanes during peak hours, requiring

three or more people per vehicle, except for those that have been grandfathered in.

Solar power was once used only for supplying electricity in remote areas (for

example, while camping in the wilderness or boating or in homes situated off the power

grid). That convenience, however, is being exploited for other applications. In

landscaping, for example, self-contained solar-powered outdoor evening lights that

recharge automatically during the day eliminate the need for electrical hookups and offer

flexibility for reconfiguration. With society’s increasing mobility and reliance on

electronics, solar power’s convenience is also manifest in solar-powered calculators,

wrist watches, and other gadgets, eliminating worries over dying batteries.

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1.6 Bundling

Some green products do not offer any of the inherent five consumer desired

benefits noted above. This was the case when energy-efficient and CFC-free

refrigerators were introduced in China in the 1990s. While Chinese consumers preferred

and were willing to pay about 15 percent more for refrigerators that were “energy

efficient,” they did not connect the environmental advantage of “CFC-free” with either

energy efficiency or savings. Consequently, the “CFC-free” feature had little impact on

purchase decisions. 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. Given consumer demand for

convenience, incorporating time-saving or ease-of- use features into green products can

further expand their mainstream acceptance. Ford’s hybrid Escape SUV comes with an

optional 110-volt AC power outlet suitable for work, tailgating, or camping. Convenience

has also enhanced the appeal of Interface’s recyclable FLOR carpeting, which is

marketed as “practical, goof-proof, and versatile.” FLOR comes in modular square tiles

with four peel-and-stick dots on the back for easy installation (and pull up for altering,

recycling, or washing with water in the sink). Modularity offers versatility to assemble

tiles for a custom look. Interface promotes the idea that its carpet tiles can be changed

and reconfigured in minutes to dress up a room for any occasion. The tiles come in pizza-

style boxes for storage, and ease of use is FLOR’s primary consumer appeal.

Austin (Texas) Energy’s “Green Choice” program has led the US in renewable

energy sales for the past three years. In 2006, demand for wind energy outpaced supply

so that the utility resorted to selecting new “Green Choice” subscribers by lottery. While

most utilities find it challenging to sell green electricity at a premium price on its

environmental merit, Austin Energy’s success comes from bundling three benefits

that appeal to commercial power users: First, Green Choice customers are recognized

in broadcast media for their corporate responsibility; second, the green power is

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marketed as “home grown,” appealing to Texan loyalties; and third, the program offers a

fixed price that is locked in for 10 years. Because wind power’s cost is derived primarily

from the construction of wind farms and is not subject to volatile fossil fuel costs, Austin

Energy passes its inherent price stability onto its Green Choice customers. Thus,

companies participating in Green Choice enjoy the predictability of their future energy

costs in an otherwise volatile energy market.

The analysis suggests that successful green marketing programs have broadened

the consumer appeal of green products by convincing consumers of their “non-green”

consumer value. The lesson for crafting effective green marketing strategies is that

planners need to identify the inherent consumer value of green product attributes

(for example, energy efficiency’s inherent long-term money savings) or bundle desired

consumer value into green products (such as fixed pricing of wind power) and to

draw marketing attention to this consumer value.

2. Calibration of Consumer Knowledge

Many 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. Changes made in EPA’s Energy Star logo provide an example, illustrating the

program’s improved message calibration over the years. One of Energy Star’s early

marketing messages, “EPA Pollution Preventer,” was not only ambiguous but myopically

focused on pollution rather than a more mainstream consumer benefit. A later

promotional message, “Saving The Earth. Saving Your Money.” better associated energy

efficiency with consumer value, and one of its more recent slogans, “Money Isn’t All

You’re Saving,” touts economic savings as the chief benefit. This newest slogan also

encourages consumers to think implicitly about what else they are “saving”—the logo’s

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illustration of the Earth suggests the answer, educating consumers that “saving the Earth”

can also meet consumer self-interest.

The connection between environmental benefit and consumer value is evident in

Earthbound Farm Organic’s slogan, “Delicious produce is our business, but health is our

bottom line,” which communicates that pesticide-free produce is flavorful and healthy.

Likewise, Tide Coldwater’s “Deep Clean. Save Green.” slogan not only assures

consumers of the detergent’s cleaning performance, but the term “green” offers a double

meaning, connecting Tide’s cost saving with its environmental benefit. Citizen’s solar-

powered Eco-Drive watch’s slogan, “Unstoppable Caliber,” communicates the product’s

convenience and performance (that is, the battery will not die) as well as prestige.

Some compelling marketing communications educate consumers to recognize

green products as “solutions” for their personal needs and the environment. When

introducing its Renewal brand, Rayovac positioned the reusable alkaline batteries as a

solution for heavy battery users and the environment with concurrent ads touting “How to

save $150 on a CD player that costs $100” and “How to save 147 batteries from going to

landfills.” Complementing the money savings and landfill angles, another ad in the

campaign featured sports star Michael Jordan proclaiming, “More Power. More Music.

And More Game Time.” to connect Renewal batteries’ performance to convenience. In

practice, the analysis conducted here suggests that advertising that draws attention to how

the environmental product benefit can deliver desired personal value can broaden

consumer acceptance of green products.

3. 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. Often, consumers don’t have

the expertise or ability to verify green products’ environmental and consumer values,

creating misperceptions and skepticism. As exemplified in the case of Mobil’s Hefty

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photodegradable plastic trash bag described earlier, green marketing that touts a product’s

or a company’s environmental credentials can spark the scrutiny of advocacy groups or

regulators. For example, although it was approved by the U.S. Food and Drug

Administration, sugar substitute Splenda’s “Made from sugar, so it tastes like sugar”

slogan and claim of being “natural” have been challenged by the Sugar Association and

Generation Green, a health advocacy group, as misleading given that its processing

results in a product that is “unrecognizable as sugar.”

We can derive from past research that green claims should be specific and

meaningful. Toyota recognizes the ambiguity of the term “green” and discourages its use

in its marketing of its gas-electric hybrid cars. One proposed slogan, “Drive green,

breathe blue” was dismissed in favor of specific claims about fuel efficiency, such as

“Less gas in. Less gasses out.” Further, environmental claims must be humble and not

over-promise. When Ford Motor Company publicized in National Geographic and other

magazines its new eco-designed Rouge River Plant that incorporated the world’s largest

living roof of plants, critics questioned the authenticity of Ford’s environmental

commitment given the poor fuel economy of the automaker’s best-selling SUVs. Even

the Prius has garnered some criticism for achieving considerably less mileage

(approximately 26 percent less according to Consumer Reports) than its government

sticker rating claims, although the actual reduced mileage does not appear to be

hampering sales. Nonetheless, green product attributes need to be communicated honestly

and qualified for believability (in other words, consumer benefits and environmental

effectiveness claims need to be compared with comparable alternatives or likely usage

scenarios). For example, Toyota includes an “actual mileage may vary” disclaimer in

Prius advertising. When Ford’s hybrid Escape SUV owners complained that they were

not achieving expected mileage ratings, Ford launched the “Fuel-Economy School”

campaign to educate drivers about ways to maximize fuel efficiency. Further, EPA is

reconsidering how it estimates hybrid mileage ratings to better reflect realistic driving

conditions (such as heavy acceleration and air conditioner usage).

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3.1. Third Party Endorsements and Eco-Certifications

Expert third parties with respected standards for environmental testing (such as

independent laboratories, government agencies, private consultants, or nonprofit

advocacy organizations) can provide green product endorsements and/ or “seals of

approval” to help clarify and bolster the believability of product claims. The “Energy

Star” label, discussed earlier, is a common certification that distinguishes certain

electronic 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.

SOME ECO-LABELS AND CERTIFICATIONS

Green Seal and Scientific Certification Systems emblems certify a broad spectrum

of green products. Green Seal sets specific criteria for various categories of products,

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ranging from paints to cleaning agents to hotel properties, and for a fee, companies can

have their products evaluated and monitored annually for certification. Green Seal has

certified the Hyatt Regency in Washington, DC, for the hotel’s comprehensive energy

and water conservation, recycling programs, and environmental practices. By contrast,

Scientific Certification Systems (SCS) certifies specific product claims or provides a

detailed “eco-profile” for a product’s environmental impact for display on product labels

for a broad array of products, from agricultural products to fisheries to construction.

Although eco-certifications differentiate products and aid in consumer decision

making, they are not without controversy. The science behind eco-seals can appear

subjective and/or complex, and critics may take issue with certification criteria. For

example, GreenOrder, a New York-based environmental consulting firm, has devised a

scorecard to evaluate clean-tech products marketed in General Electric’s

“Ecomagination” initiative, which range from fuel-efficient aircraft engines to wind

turbines to water treatment technologies. Only those passing GreenOrder’s criteria are

marketed as Ecomagination products, but critics have questioned GE’s inclusion of

“cleaner coal” (that is, coal gasification for cleaner burning and sequestration of carbon

dioxide emissions) as an “Ecomagination” product.

Consequently, when seeking endorsements and eco-certifications, marketers

should consider the environmental tradeoffs and complexity of their products and the

third parties behind endorsements and/or certifications: Is the third party respected? Are

its certification methodologies accepted by leading environmentalists, industry experts,

government regulators, and other key stakeholders? Marketers should educate their

customers about the meaning behind an endorsement or an eco-seal’s criteria. GE

recognizes that its cleaner coal technology is controversial but hopes that robust

marketing and educational outreach will convince society about cleaner coal’s

environmental benefits. On its Web site, GE references U.S. Energy Information

Administration’s statistics that coal accounts for about 24 percent of the world’s total

energy consumption, arguing that coal will continue to be a dominant source of energy

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due to its abundance and the increasing electrification of populous nations such as China

and India.

3.2. 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. 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-mouth” (buzz facilitated by the Internet) about green products.

In 2005, Proctor & Gamble partnered with the non-profit organization, the

Alliance to Save Energy (ASE), in a “viral marketing” campaign to spread news about

the money-saving benefits of laundering clothes in cold water with specially formulated

Tide Coldwater. ASE provided credibility for the detergent by auditing and backing

P&G’s claims that consumers could save an average of $63 a year if they switched from

warm to cold water washes. ASE sent e-mail promotions encouraging consumers to visit

Tide.com, an interactive Web site and take the “Coldwater Challenge” by registering to

receive a free sample. Visitors could calculate how much money they would save by

using the detergent, learn other energy-saving laundry tips, and refer email addresses of

their friends to take the challenge as well. Tide.com offered an engaging map of the

United States where, over time, visitors could track and watch their personal networks

grow across the country when their friends logged onto the site to request a free sample.

Given the immediacy of e-mail and the Internet, word-of-mouth is fast becoming

an important vehicle for spreading credible news about new products. According to the

Pew Internet & American Life Project, 44 percent of online U.S. adults (about 50 million

Americans) are “content creators,” meaning that they contribute to the Internet via blogs,

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product recommendations, and reviews. To facilitate buzz, however, marketers need to

create credible messages, stories, and Web sites about their products that are so

compelling, interesting, and/or entertaining that consumers will seek the information out

and forward it to their friends and family. The fact that P&G was able to achieve this for

a low-involvement product is quite remarkable.

International online marketing consultant Hitwise reported that ASE’s e-mail

campaign increased traffic at the Tide Coldwater Web site by 900 percent in the first

week, and then tripled that level in week two. Within a few months, more than one

million Americans accepted the “Coldwater Challenge,” and word-of-mouth cascaded

through ten degrees of separation across all 50 states and more than 33,000 zip codes. In

October 2005, Hitwise reported that Tide.com ranked as the twelfth most popular site by

market share of visits in the “Lifestyle—House and Garden” category. No other laundry

detergent brand’s Web site has gained a significant Web presence in terms of the number

of visits.

P&G’s savvy implementation of “The Three Cs”—consumer value

positioning on money savings, calibration of consumer knowledge about cold wash

effectiveness via an engaging Web site, and credible product messages dispatched by

a respected non-profit group and consumers’ Internet networks—set the stage for

Tide Coldwater’s successful launch.

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CHAPTER - 5

STRATEGIES AND ADVANTAGES OF GREEN MARKETING

STRATEGIES FOR SUCCESS

Many marketers now grow their businesses by addressing specific environmental

issues that are most relevant to their consumers. In the process, they save money and

enhance corporate and brand imagery while ensuring future sales for their products. Use

the following strategies to create profitable new or improved products and packages that

balance consumers’ needs with environmental considerations.

1. Minimize Direct Environmental Impact

2. Use Sustainable Sources of Raw Material

The prospect of rapidly depleting stocks of natural resources and the resulting

reality of price increases create opportunities for alternative technologies and new

efficiency with product design. For example, paper doesn’t have to come from trees; in

fact, alternative sources may be preferable. Promising new sources include kenaf, a fast-

growing bamboo grown in the southern US, and hemp, which is naturally pest resistant,

can be bleached with peroxide instead of chlorine, and produces a fiber more versatile

than fiber from trees.

3. Source-Reduce Products and Packaging

In the Pollution Prevention Act of 1990, the United States Congress declared

"that pollution should be prevented or reduced at its source whenever feasible."

Since the cost savings associated with source reduction are roughly parallel to the amount

of packaging eliminated, the tenets of this law are not only good for the environment,

they are good for business. Less packaging also means less energy required for

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manufacturing and transportation and less pollution from the production of packaging

itself.

To source-reduce, consider light weighting products and packages. For example,

S.C. Johnson’s steel aerosol cans use 35 percent less tin than the cans of the late 1980s.

Concentrate products. Super concentrated laundry detergents, including Lever Brothers’

Wisk Power Scoop, now account for half of the $2.1-billion powder laundry cleaners sold

in America.

Package in bulk for refilling. Refills used by all-purpose cleaners, to use less

packaging per product and save consumers money. Multi-purpose products such as

shampoo-and-conditioner-in-one also help to cut down on duplication.

4. Conserve Natural Resources, Habitats, and Endangered Species

5. Use Recycled Content

According to the Environmental Defense Fund, recycling:

cuts pollution and conserves natural resources

conserves energy

can be cost-competitive with land-filling and incineration if sensibly designed and

implemented

creates jobs and reduces costs in manufacturing sectors that are an important part

of our economy.

With the help of innovative technologies, the use of recycled content in consumer

products has skyrocketed in the last decade. Products that formerly boasted 10 percent

recycled content may now incorporate as much as 100 percent post-consumer content.

Where even as recently as five years ago, recycled content was limited mostly to paper,

glass, metals, and some plastic laundry bottles, now an entire array of high quality

products including clothing, garden furniture, paint, and motor oil are closing the loop.

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6. Make Products Energy Efficient

Individuals directly consume about 40 percent of the energy used in the U.S. for

such things as powering cars, lighting, heating and cooling homes, and running

appliances. In the process, they contribute about 40,000 pounds of carbon dioxide

emissions a year. However, many thousands of pounds can be eliminated by simple

actions. In fact, the California Energy Commission estimates that cost-effective

investments could reduce total U.S. electricity demand by 40 percent to 75 percent.

7. Maximize Consumer and Environmental Safety

Scientific data and empirical evidence continue to link various illnesses with

consumer products made from synthetic chemicals. According to the EPA, formaldehyde

in wood paneling causes wheezing, organic gases in carpeting cause liver damage,

perchloroethylene used to dry-clean clothing causes headaches, and VOCs (volatile

organic compounds) in cleaning products cause nausea. Many illnesses can be traced to

indoor pollution, which has been proven to be ten times more toxic than its outdoor

counterpart.

Consumers’ concerns about product safety translate into opportunities for

alternative home construction and cleaning products.

8. Make Products More Durable

As demonstrated by historical sales pitches for Maytag Washers and Volvo Cars,

consumers value durable appliances and automobiles. Thanks to environmental concerns,

long product life will increasingly become a source of added value and an indicator of

quality and convenience in many other industries as well.

9. Make Products and Packaging Reusable or Refillable

The throwaway convenience culture is making way for reuse and refilling as

alternatives to land-filling, incineration, and even recycling.

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10. Design Products for Remanufacturing, Recycling, and Repair

Landfill disposal bans are in force across the nation for such highly toxic items as lead-

acid batteries, tires, used motor oil, paints, and refrigerators. Due to such legislative

pressures as well as extended producer responsibility laws in Europe, a growing number

of manufacturers now design their products for remanufacture, recycling, and repair, and

help set up the infrastructures for doing so. Smart marketers are turning these imperatives

into opportunities to save money, enhance quality and get closer to their customer.

11. Make Products Safe for Disposal

12. Make Products and Packaging Compostable

In nature, everything is recycled. Waste for one organism becomes food for

another. According to EPA, 40 percent of our solid wastes are biodegradable materials

that can be effectively composted into humus, an organic matter that can enrich gardens

and agricultural soils. This has important implications for businesses, and a number of

innovative designers are developing products with this idea in mind.

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RESULTS OF A SURVEY CONDUCTED IN THE USA

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THE SEVEN STRATEGIES OF GREEN MARKETING SUCCESS

The currency of the green business world is innovation, flexibility, change and

heart. New rules have emerged from the cloud of green marketing dust kicked up in the

late 1980s and early 1990s. We know better what works - and what does not. Seven

strategies that work are listed in Exhibit 1.

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OTTMAN CONSULTING’S SEVEN STRATEGIES

GREEN MARKETING OPPORTUNITIES

Equipped with a better grasp of ecological issues, enlightened businesspeople

voluntarily adopt environmentally responsible business practices. A growing number of

CEOs now appreciate the link between environmental responsibility and more efficient -

and profitable - business practices. And more and more business communicators know

how to use green marketing strategies to take advantage of opportunities to boost their

corporate environmental images.

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MORE PROFITS – Many companies, and especially those in such highly polluting industries as

chemicals, oil, and electrical power generation, now have management systems in place

to make sure corporate environmental profiles and products exceed consumers’

expectations. Today, major U.S. corporations conduct environmental audits and recycle

their waste. Countless others upgrade their facilities with energy-efficient technologies.

Such steps reduce operating costs and liability while boosting profits.

Producing eco-efficient products creates less waste, uses fewer raw materials and

saves energy, too. Thanks to innovative manufacturing processes suggested by highly

motivated and environmentally trained employees, Interface, the world's largest producer

of commercial carpeting, projects a savings of more than $35 million by the end of 1997.

The changes required for making and marketing environmentally sensitive

products enhances employee morale and productivity with a payoff in improved customer

relations and overall returns on investment. Enhanced corporate imagery ensues, and this

can help attract investors and top talent.

COMPETITIVE ADVANTAGE – Many marketers now know that being the first to the shelf with an environmental

innovation brings competitive advantage. Since 1993, Rayovac introduced Renewal

brand reusable alkaline batteries and redefined the market for re-chargeable. With 50

percent of the production capacity for phosphate detergents, German-based Henkel

pioneered the market for zeolites and claimed market leadership when their consumers

shifted to phosphate-free detergents. Philips Lighting, inventors of compact fluorescent

lighting technology, stood ready when businesses and electric power utilities came

calling for replacements for energy-guzzling incandescent. Wellman, Inc., has expanded

its business definition from plastics recycler to pioneers in the market for branded

polyester fiber made from used Coke bottles.

Many of these leaders have been showered with any number of eco-accolades

now offered by industry, media, government or environmental groups. One example is

the Special Edison Award for Environmental Achievement bestowed by the American

Marketing Association. It has been won by Fortune 1000 firms including 3M and Procter

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and Gamble as well as by a raft of up-and-coming firms with a deep-green orientation

like Natural Cotton Colours, Patagonia, and Tom’s of Maine.

Young, aggressive competitors adept at capturing the imaginations and winning

the hearts of highly desirable environmentally and socially conscious customers are

introducing some of the most exciting green products. The success of Patagonia

outerwear, Stonyfield Farm Yogurt, and Tom’s of Maine toothpaste suggest that

consumers now have higher expectations for the products they buy and that quality is an

image that no longer stands apart from environmental impact.

Looking to cash in on the potential for future green-oriented sales, well-

established mass marketers now shop for green companies with promising green brands;

recent acquisitions include Earth’s Best Baby Foods (by Heinz), Murphy’s Oil Soap

(Colgate- Palmolive), EarthRite Cleaning Products (Reckitt & Colman). After nearly two

decades of compromising on quality –and languishing on once-dusty health food store

shelves as a result–today’s crop of green products finally embody all that consumers

demand: an opportunity to clean up the mess without having to give up price or quality.

With the deepened consumer confidence in green products that results, the market

becomes legitimized.

INCREASED MARKET SHARE – Times are tough for marketers of branded products. Brand loyalty is near all time

lows, and the percentage of Americans who feel that some brands are worth paying more

for is declining. In this tough, competitive climate, environmental compatibility breaks

ties at the shelf. Pragmatic consumers skew purchases to those products and packages

that must be recycled or otherwise safely disposed of in their communities. All else being

equal, many consumers look to do their bit by happily switching brands, or "boycotting"

those companies and products deemed environmentally sound and boycotting the brands

of companies with disappointing environmental track records.

Theses growth opportunities have not been lost on such market leaders as Procter

& Gamble, McDonald's, and Compaq. They offer the greenest of mainstream products

and take pains to project environmentally appropriate corporate images. Pick up a bottle

of Tide laundry detergent and learn how it is "phosphate-free," contains "biodegradable

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cleaning agents," and is packaged in a "recycled-content" bottle. Check out the basic

brown paper carry-out bags and speckled (recycled) napkins at McDonald's (they are now

testing "Earth Shell" compostable food wraps), and buy a Compaq PC emblazoned with

the Energy Star energy-saving designation.

Many executives would be shocked to discover just how many consumers are

aware of - and act upon - their knowledge of corporations’ track records for

environmental, and also social, responsibility. In one poll conducted by the Porter Novelli

public relations firm, for example, consumers were five times more apt to believe that a

company’s record on the environment was an "important" factor in their purchasing

decisions than corporate executives believed.

BETTER PRODUCTS – While much brand switching is conducted in the name of altruism, what attracts

many consumers to greener products is quite simply the prospect of higher quality: water-

saving showerheads slash energy bills, concentrated laundry detergents are easier to carry

and store, and nontoxic garden products are safer for children. Except these enhanced

primary benefits–of performance, convenience, price, and safety, for example–that

accompany environmental improvements to continue to propel the market for

environmentally preferable products in the years and decades ahead.

PERSONAL REWARDS – Green marketing offers a rare opportunity to integrate one’s values into the

workplace. Creating products that are more in sync with nature allows one to personally

contribute to environmental cleanup and help ensure a more secure future for our

children.

A mind once expanded never goes back to where it was. No longer content to

promise consumers that their clothes will become "whiter than white" or breath that is

"fresher than fresh", green marketers–like their bosses who manage for a double bottom

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line–cultivate higher levels of satisfaction and reward. They offer their consumers the

prospect of healthier, more fulfilled lives, and the power to make the world a better place.

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CHAPTER - 6

CONCLUSION

CONCLUSION

There are many lessons to be learned to avoid green marketing myopia —the

short version of all this is that effective green marketing requires applying good

marketing principles to make green products desirable for consumers. The question that

remains, however, is, what is green marketing’s future? Historically, green marketing

has been a misunderstood concept. Business scholars have viewed it as a “fringe” topic,

given that environmentalism’s acceptance of limits and conservation does not mesh well

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with marketing’s traditional axioms of “give customers what they want” and “sell as

much as you can.” In practice, green marketing myopia has led to ineffective products

and consumer reluctance. Sustainability, however, is destined to dominate twenty-first

century commerce. Rising energy prices, growing pollution and resource consumption in

Asia, and political pressures to address climate change are driving innovation toward

healthier, more-efficient, high-performance products. In short, all marketing will

incorporate elements of green marketing.

A more sustainable business model requires “product dematerialization”— that is,

commerce will shift from the “sale of goods” to the “sale of services” (for example,

providing illumination rather than selling light bulbs).

Innovations that transform material goods into efficient streams of services could

proliferate if consumers see them as desirable. To avoid green marketing myopia, the

future success of product dematerialization and more sustainable services will depend on

credibly communicating and delivering consumer-desired value in the marketplace. Only

then will product dematerialization steer business onto a more sustainable path.

Successful green marketing entails much more than simply tweaking the size of a

package, using recycled materials in place of virgin ones, or substituting natural

ingredients for synthetic. While positive and necessary, such changes are just a small part

of a much, much bigger picture. When we look at the businesses that are at the forefront

of the green trend, we see a deeper characteristic than just greened-up products or ads that

makes them at once environmental and societal leaders as well as profitable: green

leaders are driven by more than short-term financial goals. They are motivated by a

double bottom line, a bottom line that recognizes the potential for business to affect

societal change as well as create economic wealth. A business that at the end of the day is

measured by profits as much as its contribution to human potential and the harmony of

the company's objectives with other living beings.

Green leaders are not afraid to project the values that underlie their organization's

mission and purpose. To their customers, the products they sell are not just consumables

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sold at a profit but mirrors of their corporate commitment to environmental care and

social responsibility. Such products appeal to consumers with a finely honed sense of

idealism, integrity, and the belief that businesses can and should achieve social goals as

well as financial ones. Because green leaders are not afraid to take a stand on their

beliefs, their consumers stand ready to believe their product claims and regard the

individuals running the company as sincere.

The most successful green companies operate holistically. Unlike conventional

marketers who most often react to consumers' immediate needs, the most successful

green companies lead their customers and other stakeholders, rather than accept being led

by them. They anticipate emerging environmental issues and address them before being

forced to do so. As such they are able to set their own agenda with regulators and they

don't risk disappointing their customers or shaking their confidence.

Rather than simply employ resources at hand, the deep-seated convictions of the

founders and CEOs of the most environmentally responsible companies challenge their

employees to stretch beyond their immediate horizons, teaming up with corporate

environmental stakeholders to create optimal solutions to pressing environmental

problems.

These leaders are not afraid to question assumptions or break the rules. They

derive competitive advantage while accomplishing the most good for society by

embracing unconventional and often radical solutions. They enhance profitability and

quality by innovating more and more efficient ways to design and market products and

conduct their businesses overall.

The greenest companies are not afraid to listen – to understand the issues from all

sides, to pick up clues from individuals and groups on the fringes who can lead them to

new opportunities, and to simply demonstrate to employees, customers, suppliers and

others that they care. At the same time, they are not afraid to trust. They are open to

entrees from government regulators offering technical assistance or to an

environmentalist with a seemingly off-beat idea. Most importantly, they trust their own

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instincts, their insights into the causes and probable solutions to society's environmental

ills, and their own deeply held beliefs. Green leaders focus–on the stakeholders most

important to their business and on the product attributes that represent the greatest

environmental impact and are most important to their customers.

Finally, green leaders are patient. They are committed to the long term, and to

continuous improvement. They are eager to learn from their own mistakes and they

engage in forums that allow them to learn from the mistakes of others. And, like Sally

Fox, who took 10 years to cultivate a naturally colored cotton seed capable of yielding a

fiber long enough to be spun into marketable yarn, green leaders persevere.

A green future is now being created by visionaries with a competitive spirit in

their bellies and social activism in their hearts. While many businessmen and women may

still be content to tweak products or manage cash cows in the quest for next quarter's

earnings, green leaders are right now readying new products and services to market,

creating new industries and more inclusive work and management styles that didn't exist

five or ten years ago. Theirs will be the standards for the future.With ever increasing

scientific understanding of how the Earth works, a general movement toward safer, less

polluting and more environmentally sustainable practices is inevitable. Marketers that

take the time now to court the deepest green consumers with truly innovative solutions to

environmental concerns will be the ones who reap the biggest future opportunities.

 

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