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Green Marketing: A visionary step towards Sustainable Development

 

Mr. Byomakesh Debata

Faculty member, Centurion University of Technology and Management,

Odisha, India.

 

Mr. R. Pradeep Patnaik

Faculty member, Centurion University of Technology and Management,

Odisha, India.

 

Abstract

 

Sustainable development (SD) is a pattern of resource use that aims to meet human needs while preserving the environment so that these needs can be met not only in the present, but also for generations to come. `Green marketing' encompasses activities designed to generate and facilitate human needs so that the satiation of these needs would leave minimal negative impact on the natural environment. With the growing awareness on global warming, pollution, and other environmental issues, companies and consumers are increasingly switching to green products and services, thereby, creating a platform for sustainable development. Resources are limited and human wants are unlimited. Hence, it is very important for the marketer to utilize the resources efficiently and, at the same time, achieve the organization's objective. Green Marketing is the best-suited solution to this issue. The consumers of today are more conscious about protecting the environment. They are enlightened consumers and are known as `green consumers'. According to American Marketing Association (AMA), "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". As per the recent statistics, consumers are shifting their brands from one product to another based on the eco-friendly mechanism of the product. Here, the author has attempted to unfold the challenges and its mitigating strategies towards sustainable development and has taken ‘Green Marketing’ as the best weapon.

Key Word: Green products, Sustainability, Green consumers.

 

Introduction

 

Green products don't work well and consumers won't pay a premium for them - is an old saying. But most of the companies today believe that investing in environmentally preferable products and technologies can be a source of innovation and competitive advantage. The success of companies practicing `green marketing' has drawn the attention of corporates, policy-makers and, more importantly, consumers. Green marketing is the recent buzzword ruling the corporate world. In today's context of global warming, climate change and environmental pollution, this concept has evolved as a savior for the mankind.

 

Green marketing is environment-friendly, sustainable and socially responsible marketing. According to American Marketing Association (AMA), "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".

 

Many people have attempted to define the term "green marketing". It is sometimes used as a synonym to `environmental marketing' and `ecological marketing. Jacquelyn A Ottman, author of "Green Marketing: Opportunity for Innovation", defines green marketing as environmental considerations integrated in all aspects of marketing. Michael J Polonsky, author of the books on environment and green marketing, defines the term as "All activities designed to generate and facilitate any exchange intended to satisfy human needs or wants such that satisfying of these needs and wants occur with minimal detrimental input on the national environment".

 

Broadly, green marketing involves developing good quality products which can meet consumer needs and wants by focusing on the quality, performance, pricing and convenience in an environmental-friendly way. Practicing green marketing is not only good for mankind but also for the environment. It also give competitive advantage to the marketers.

 

Evolution of the Concept

 

Many people believe that green marketing has evolved from environmental marketing and ecological marketing and its scope is much wider when compared to the other two. It encompasses environment-friendly products and services and also guarentees value, pricing and customer satisfaction. The term `Green Marketing' was, in fact, coined much earlier but gained popularity only during the late 1980s and early 1990s. The AMA, for the first time, organized a workshop on `Ecological Marketing' in 1975. The results of the proceedings of the workshop were documented in one of the first books on green marketing titled `Ecological Marketing'. According to Peattie (2001). there are three phases in the evolution of green marketing:

 

i. Ecological Green Marketing: This is the phase when companies were concerned about the environmental problems and tried to provide appropriate solutions to the same.

ii. Environmental Green Marketing: In this phase, the focus was shifted to clean technology and this, in turn, helped in designing innovative products and taking care of waste disposal and pollution.

iii. Sustainable Green Marketing: Green marketing is not for the short-term, but needs to be sustainable in the long-term; and for this, it should be able to command adequate customer support. This concept began to gain importance during the late 1990s.

 

Jacquelyn A Ottman and others have described green marketing at three different levels:

 

i. Marketing: Development of new technology, new process and new product and

communicating the same to the customer. Innovation is an integral part of it. New process and technology to develop environment-friendly products and services.

ii. Holistic Nature: All stakeholders need to be part of this initiative _ marketer, supplier, retailer, educator, community member, regulator, NGO - indeed all of them.

iii. Environmental Issues: Need to be balanced with primary customer needs. There are many ways wherein along with making profits, marketers can take care of environmental issues.

 

Rules of Green Marketing

 

There are many ways as to how a company can incorporate the concept of Green Marketing in its marketing activities. The first and foremost is the customer satisfaction in an environment-friendly way. In developed countries like the US, customer awareness of the environment is very high. That is the reason there are `green consumers', and this has become prevalent in many other countries. Companies that want to incorporate Green Marketing need to work on the following areas:

 

  • Be aware of the environmental issues and the way it will impact people's lives. There is a need to create awareness among the customers to make Green Marketing work.
  • Make the customers feel that they will make a difference by being environment-friendly. Once the customers understand and start appreciating and valuing the companies practicsing Green Marketing, a lot will change for the better.
  • Going green implies working towards the greater cause of environmental protection and safeguarding the ecology and climate. Marketers have to believe that by practising Green Marketing, they will be helping the environment and the mankind.
  • Make best possible efforts to ensure that the green products provide the same benefits to customers as the non-green alternatives and are affordably priced.

 

A Few Cases

 

  • Dell Computers: Recently, Dell has launched the `plant a tree for me' program in partnership with `The Conservation Fund' and `Carbonfund.org'. It has been a very good initiative to offset carbon emission and individuals and corporations can easily participate in it.
  • General Motors (GM): GM has launched a light-hearted advertisement on the TV that begins with `Dear Oil'. The purpose behind this advertisement is to make people understand its efforts to move beyond oil as the source of energy and look to other options.
  • CNG in Delhi: In 2002, the Supreme Court of India passed a verdict to completely adopt Compressed Natural Gas (CNG) for all public transportation systems in the Indian capital to curb pollution. This step was appreciated by one and all as the level of pollution in Delhi was very high. However, initially there were objections raised by the transporters; but in due course, it was successfully implemented (Exhibit 1).
  • McDonald's: The company has started using restaurant napkins and bags made of recycled paper.
  • Hewlett-Packard (HP): HP has promised to cut its global energy uses 20% by 2010. To accomplish this reduction, HP has announced plans to deliver energy-efficient products and services.
  • Philips: Philips has launched the `super long life' bulb which saves up 20% energy.
  • Badarpur Thermal Power Station, New Delhi: Trying to find out ways to utilize the coal-ash which pollutes air and water
  • Xerox Corporation and Canon: It has introduced high quality recycled photocopier paper (Exhibit 2) to meet the demand for less environmentally harmful products.
  • Walt Disney World (WDW): It has an extensive waste management program and infrastructure in place.

 

Green Consumer

 

Who is a green consumer? A consumer who uses products free from non-green chemicals or uses completely natural products, can be considered green. Can a consumer who uses phosphate-free detergent be considered green or one who purchases detergents made from completely natural ingredients be called green? What percentage of the purchasing public can be identified as green? Where is the trend for green consumers heading? An example is Philips energy efficient lighting. These are environmentally oriented and command brand loyalty. Canon has reinforced the company's environment-friendly position through cause related marketing.

 

Green Penetration

 

We cannot definitely say how much the green products have penetrated the traditional market. For example, the market penetration of biofuels can grow up to over 21% by 2030. In auto and energy sectors, green product penetration has been on a mass scale. Green products are not only essential for the environment but also necessary for businesses to keep expanding. Green Gross Domestic Product (Green GDP) is an index of economic growth with all environmental consequences of that growth being factored in. Some environmental experts prefer indicators like waste per capita and CO2 emissions per annum, which can be aggregated into a Sustainable Development Index.

 

As demand for organic food and sustainable products increases, some big companies are reinventing their products for capturing a share of the growing green market. For example, Expedia.com customers purchase carbon offset to lessen atmospheric damage caused by flying. Innovative green marketing promotions like Fairtrade coffee, recycled furniture, organic clothing, etc., have placed decisions in the buyers' or consumers' hands. The empowered consumers choose products which are environmentally preferable. Green consumerism has resulted in various consumer products to be certified with a "green label". Germany is increasingly using eco-labeling schemes. The Blue Angel Program in Germany covers 3600 products such as non-pollutant varnishes and coatings, low emission gas burners, recycled paper, products for waste water treatment, dish washing detergent, household cleaners, batteries, packaging and building materials, refrigerators and hair sprays.

 

Given that several other major countries too have eco-certification schemes such as America's Green Seal and Japan's Eco-Mark; companies are now more likely to provide customers with requisite information about their product's environmental impact. Redefining the roles of products and business, working with governments, consumer groups and NGOs are very essential. Products definitely improve life quality but the destructive impacts on the environment must be minimized in order to move towards greater sustainability.

 

Designing Green Products

 

Nowadays, green design is used to develop more environmentally beneficial products and processes. The recycling of toxic wastes avoids the dissipation of materials into the environment. For example, rechargeable nickel-cadmium batteries can be recycled. The biggest challenge of green designing however is altering conventional design and manufacturing procedures to incorporate environmental considerations in a systematic and efficient manner.

 

A green product could be made entirely of renewable materials and energy. Green products secure greater profits by reducing costs and achieving higher level of exports. Germany, France, the Netherlands, the US and Australia have started numerous green projects by providing incentives for green product development. We can maximize economic and environmental performance by adopting green design strategies. For most products, 70% of the cost is determined in the design phase of its development. By adding and integrating environmental considerations into product design, a company increases efficiency and reduces waste of materials, energy and other allied costs.

 

Two high profile industry sectors—building and construction, and motor vehicles—producers use Design for Environment (DfE) to incorporate eco-efficient principles in their product development process, which strategically reduces the environmental impact over the entire product life cycle, from manufacture to disposal. Consumers prefer these products because they are green, durable, of higher quality and sometimes cheaper. Many plastic companies in China design and produce innovative plastic products for the international markets. These products can be recycled at the end of their lives. They are exported to the US, the UK, Germany, Australia, New Zealand, Canada and Japan.

 

Remanufacturing is based on cost-efficiency rather than eco-efficiency, helping in reduced cost of materials, energy and waste disposal. These cost benefits also translate into environmental benefits as this leads to reduced demand for raw materials, energy consumption and lesser waste. A company named S C Johnson & Son Inc. (Exhibit 3), which manufactures a wide range of home cleaning products, uses recycled materials for packaging. Aerosol packages contain 25% recycled steel and are themselves recyclable. Shipping containers have 95% recycled content. Packaging design mostly focuses on container capacity, recyclable and reusable materials, reduced weight and the elimination of intermediate packaging. SC Johnson uses only chemicals permitted by legislation in Australia. It also uses independent auditing, does internal evaluations and holds training programs to achieve environmental improvement. If society has to achieve sustainability, the companies have to play a critical role.

 

There has been a significant change in the mindset of customers, and manufacturers are leaving no stone unturned to respond to the shoppers' demands. The hotel industry is showing maximum inclination towards green marketing by projecting their eco-testimonials more aggressively. The concept of `green inn' is catching on. For example, hotels have been suggesting to their guests to reuse towels for the period of their stay, so as to save water and energy spent on laundering.

 

A lodge at Sun Ranch in Cameron, Missouri (in the US) dedicatedly plants 10 trees in the Amazon region for every guest's stay in its place. Another effort is being made at The Hilton in Naples, Florida (USA). The hotel is growing a Confederate Jasmine vine garden on top of its roof, which keeps the building effectively cool and the best feature is that the garden is watered with condensation waste from the air conditioners. According to The American Hotel and Lodging Association, when it put up `Green Best Practices' resource guide on its official website, it soon became one of the most visited sites in recent times.

 

Clearly, the environment is becoming a priority for hoteliers and that too for good reasons. The general public too has started taking a firm stand on its responsibility towards the environment and according to the Travel Industry Association-USA, more American adults are keen to select an environmentally responsible hotel. "Putting the `eco' in front of your name gets attention", according to Ted Martens, director at Sustainable Travel International, a nonprofit organization in the US that educates travelers and travel providers about ecology conservation. As an offshoot, the concept of `Green IT' has evolved as well, which is being taken very seriously by many companies, particularly in Britain. Here, almost half of the large IT firms have adopted the green IT strategy.

·         Introduction of Compressed Natural Gas (CNG) and Unleaded Petrol in Delhi: This improved the quality of petrol and has helped bring down pollution levels.

·         Solar Equipment: Solar equipments are the need of the hour, as they assist in enhancing the quality of our environment by not generating noise or air pollution. They also conserve energy.

·         Energy Conservation: Compact Fluorescent Lamps (CFLs) provide an energy saving alternative to incandescent lamps, and they are also very effective in bringing down electricity expenses. Today, we find widespread use of CFLs. Similarly, introduction of hybrid and electric vehicles is a useful measure for reducing air pollution.

·         Eco-friendly Furniture: It is a good substitute for classical wooden furniture which we use in our households. Eco-friendly furniture draws more on waste products and other by-products, which do not pose any threat to our environment and depends less on wood.

·         Recycling: Recycled plastics, recycled rubber, textiles, recyclable synthetic and waste products go into the making of many products such as eco shoes. Similarly, eco-friendly paints are being manufactured that have non-hazardous and natural raw materials as their ingredients. Such paints are the need of the hour to make our environment safer. Handmade paper is much in demand as it is made of non-wood resources. Handmade paper has dual benefits, as it help conserve trees and also reduces pollution.

 

It is often said that the green niche can be more appealing and lucrative. Customers who are environmentally aware keep on learning more about green products and do not mind paying more for such products. However, Edwin R Stafford, Associate Professor of Marketing at Utah State University's College of Business, states that even after so much endeavors and publicity, only a small fraction of consumers base their buying decisions on a product's environmental quality. People, in general, although they are aware, do not take environmental factors into consideration while making a purchase. However, they definitely should, during these times of deteriorating environment.

 

Nonetheless, there is huge untapped potential for the marketing of green products which provide an immediate advantage to the consumers. Several examples can be quoted even from India, where customers are using them because of their practical benefits. These include front-loading energy-efficient washing machines and other appliances, compact fluorescent lamps, solar water heaters, etc. But we cannot ignore the fact that the success of many green products is not because of their `greenness', but due to the utility and the practical value they provide to the customers. This is where education will have to play an important role in the marketing efforts. People need to be made aware about the benefits of using green products. A macro-level thinking needs to be inculcated amongst the consumers.

 

LOHAS (Lifestyles of Health and Sustainability) in the Indian Context

 

LOHAS benefits in India can be seen in many industries, whether it is food and beverages, new personal care products (made with ingredients like green tea), or various lifestyle activities (such as yoga or the spa industry itself).

 

Organic Farming

 

In the organic farming sector, Navdanya Farming has joined hands with Slow Food, an international good food movement, in spreading the movement for healthy, culturally-diverse, high quality, nutritious and ecologically-sustainable food. Navdanya means nine crops that represent India's collective source of food security. The main aim of the Navdanya biodiversity conservation program is to support local farmers, rescue and conserve crops and plants that are being pushed to extinction and make them available through direct marketing.

Today, around 20% of Darjeeling tea is under organic/biodynamic cultivation and the tea estates of Tata Tea, Bombay Burma Trading Company (BBTC), Parry Agro Assam Company Limited and Ambootia tea estate in Darjeeling are among those into it. Poabs Estate in Nelliampathy, Kerala, follows the same biodynamic system in coffee production. Small organic coffee producers operate in the Wayanad and Idukki districts of Kerala, the Koppa region of Karnataka, the Eastern Ghats of Andhra Pradesh and in the `Seven Sisters' states in the North-East.

 

More often, they are supported by non-governmental organizations (NGOs), which generally form `Self-Help Groups' or cooperatives to become micro-enterprise units. In India, there are about seven major tea estates and five coffee estates that adhere to the prescribed on-farm processes and are certified `biodynamic', although some of the biodynamic preparations are used in varying degrees on organic farms across India. Organic farming in India gained momentum in early 1990's, as a reaction to the damage caused by conventional farming. Chemical inputs are substituted with organic compost and herbal antidotes to pests.

 

Hybrid Cars

 

Going by available trends, we are likely to soon find hybrid cars on Indian roads in significant numbers. A hybrid vehicle is one that uses two or more distinct power sources to propel the vehicle. At the Auto Expo in New Delhi this year, many companies had displayed their hybrid vehicle offerings. In its present form, with a likely price premium of 60% over its equivalent model in India, it can safely assume that hybrids are going to be preferred mostly by private car-users and not by commercial vehicle operators. Pioneer to the segment in India is Honda rolling out its new model—the Honda Civic sedan in a hybrid petrol-electric version

 

Green Phones

 

In the cellular phone market, Nokia, the world's largest cell phone-maker, is working on new energy-saving products to try to reduce its impact on the environment. Nokia, whose devices are used by around 900 million people, was the first phone company to include reminders in its devices encouraging people to unplug the charger once the battery was full, to save energy. The energy-saving alerts began with the Nokia 3110 (65% recycleable), Nokia 1200, Nokia 1208 and the Nokia 1650 handsets and this feature is being extended across the Nokia product range. The company announced a rollout of about 40 new phone models this year in India in the category of Green Phones (Exhibit 4). Nokia is also planning to place Green Bins across the country, where customers can dispose of their old phones for recycling. Training and awareness programs `Take back' will be organized soon at various priority centers across India.

 

Sustainable Tourism

 

Not to lag behind, the tourism sector, one of the fastest-growing segments in India, is also moving towards sustainable tourism and alternative modes of travel. Sustainable tourism concerns not just the natural environment, but also the social, cultural and economic environments. The definition of eco-tourism, according to the Ecotourism Society, is "responsible travel to natural areas which conserves the environment and improves the welfare of the local people" (www.ecotourism.org/webmodules). What it means is that a mere visit to an ecologically-rich geographical location does not constitute eco-tourism. It involves much more on the part of the visitor. For instance, a walk through a rainforest is not eco-tourism, unless that particular walk somehow benefits that environment and the people who live there. To put it in simple terms, the trip should help conserve and also improve the ecological condition of the place visited.

 

Green Buildings

 

The real estate and construction industry in India is one of the rapidly growing sectors which contribute significantly to the nation's economy. This sector contributes to 10% of India's Gross Domestic Product (GDP). The Confederation of Indian Industry (CII) plays an active role in promoting sustainability in the Indian construction sector. The related concept of sustainable development and sustainability in this segment is green building. A green building uses less energy, water and natural resources, creates less waste and is healthier for the people living inside as compared to a standard building. The CII is the central pillar of the Indian Green Building Council (IGBC). The IGBC has licensed the Leadership in Energy and Environmental Design (LEED) Green Building Standard from the US Green Building Council and is currently responsible for certifying "LEED - New Construction" and "LEED - Core and Shell Buildings" in India. The approach to sustainability in buildings covers several key areas: sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality.

 

The Winning Mantra

 

Companies need to believe first that Green Marketing `can work' and make diligent efforts to make necessary product improvements, which deliver performance, are marketable and profitable. Companies should not only develop green products but must explain about the same more effectively to the consumers. They also need to integrate Green Marketing strategy into all the 4 P's (Product, Price, Profit and People) of the marketing mix. Consumers, suppliers of raw materials, distributors and retailers _ all need to be made aware of Green Marketing and its benefits. Green marketing has to be considered as a visionary goal to be achieved through continuous improvements and efforts. It must be included in the company's overall corporate strategy.

 

Conclusion

 

Green Marketing is still in its infancy. A lot of research has yet to be made to explore various opportunities and possibilities. Profit is important for the sustenance of any firm. Adoption of Green Marketing may not be profitable sometimes in the short-run, but definitely firms that are first movers, will have competitive edge over the others in the long-run. Today's consumers are very much aware of environmental issues like global warming, climate change, etc., and are getting ready to pay the premium for environment-friendly products and services. Companies too have a role to play in creating awareness regarding the necessity of using green products. The time has come for firms to explore every opportunity to enhance their products/services in terms of quality, performance, social responsibility and environment-friendliness. Social organizations and consumer forums too have to pressurize companies to adopt green practices in their operations.

 

The government has to strengthen policy measures to facilitate the move towards environment friendly products and practices. There is already a significant degree of development in this direction in the US and many European countries. This movement has to spread geographically across the world, which would also necessitate customization to match with the requirements and affordability levels in different countries.

 

References

 

1.      Li, H (2008): “Green marketing and sustainable development of garment industry- A game between cost and profit”, International Journal of Business Management, vol.-3, No.-12.

2.      Saxena, khandelwala:Sustainable Development through Green Marketing: The Industry Perspective”, The International Journal of Environmental, Cultural, Economic and Social Sustainability, Volume 6, Issue 6, pp.59-80.

3.       Singh, Anurag; Singh, Ranjit: “Green Marketing: Developments in the Indian Automobile Sector”, Marketing Mastermind ICFAI University press, Nov. 2008.

4.      Dutta, Bholanath: “Sustainable Green Marketing: The New Imperative”, Marketing Mastermind ICFAI University press, sept. 2009.

5.      Dai, Xiuying (2010) : “Study on Sustainable Development Ability of Agricultural Product Processing Enterprise”, International Journal of Business and Management, Vol. 5, No. 12; December 2010.