ASeminar Report

ON

“LIBERALIZATION” Submitted in partial fulfillment of the requirement for the award of degree of

“MASTER OF BUSINESS ADMINISTRATION”

Session (2011-2013)

Submitted to Submitted By Mrs Monika Sharma Sahil (H.O.D MBA Dept.) M.B.A 1ST SEM.

Roll No. – 01211009

DOON VALLEY INSTITUTE OF ENGINEERING AND TECHNOLOGY, KARNAL

Approved by AICTE, Affiliated to KURUKSHETRA UNIVERSITY, KURUKSHETRA

1

PREFACE

The removal of or reduction in the trade practices that thwart free flow of goods and services

from one nation to another. It includes dismantling of tariff (such as duties, surcharges, and

export subsidies) as well as nontariff barriers (such as licensing regulations, quotas, and arbitrary

standards).liberalization refers to a relaxation of previous government restrictions, usually in

areas of social or economic policy.

Liberalization means relaxation of various government restrictions in the areas of social and

economic policies. Liberalizing trade policy by the government that is removal of tariff,

subsidies and other restrictions on the flow of goods and services between countries is also

termed as liberalization. Liberalization is the result of New Industrial Policy which abolished the

"License system".

All industries except six major industries were liberalized. As a result industries grew rapidly

and therefore liberalization also means deregulation and delicensing of industries.

Autonomy at large has resulted because of liberalization. Liberalization means to follow liberal

economic policy, accepted by the world. It has revolutionized the entire business world and has

provided highly competitive opportunities for all countries. Liberalization has opened new

business opportunities abroad and increased foreign direct investment.

Liberalized trade policy resulted in the free flow of goods from and within the country. A

number of multinational company started operating world wide including India. New market for

various goods came into existence and resulted not only in urban but also in rural development.

It became very easy to obtain loans from banks for business expansion. "Foreign Collaboration"

is the latest outcome of liberalization.

2

ACKNOWLEDGEMENT

I take this opportunity to express my acknowledgement and a deep sense of attitude for rendering valuable assistance and guidance to me by the following personalities for successful competition

of my seminar report. A special thanks to respected Director G. S. SHARMA for being a source of inspiration. My sincere thanks to Mrs. MONIKA SHARMA (H.O.D MBA Deptt.) for her salient cooperation and help through her sound judgment and without her sound judgment and without her advice the completion of this report would not have been possible.

A very sincere thanks to Mrs MONIKA SHARMA (Lect. Of MBA) for suggesting me the topic of my report. She has been a source of encouragement, guidance and advice throughout the source of my report preparation, I am also thankful to all faculty members of MBA Deptt. For their valuable entire guidance. Again I would like to acknowledge my sincere thanks to Mrs Monika for providing me an opportunity to work under their valuable time.

(SAHIL GANDHI)

TABLE OF CONTENTS

3

Serial No. Name of the Topic Page No.

Chapter-1 Introduction

1.1 Meaning

1.2

Chapter-2

2.1

2.2

2.3

Chapter-3

3.1

3.2

3.3

3.4

Chapter-4

4.1

4.2

4.3

4.4

Chapter-5

Chapter-6

Conclusion

Bibliography

1.1 Introduction

According to the American Marketing Association, green marketing is the marketing of

4

products that are presumed to be environmentally safe. Thus green marketing incorporates a broad range of activities, including product modification, changes to the production process, packaging changes, as well as modifying advertising. Yet defining green marketing is not a simple task where several meanings intersect and contradict each other; an example of this will be the existence of varying social, environmental and retail definitions attached to this term. Other similar terms used are Environmental Marketing and Ecological Marketing. Thus "Green Marketing" refers to holistic marketing concept wherein the production, marketing consumption an disposal of products and services happen in a manner that is less detrimental to the environment with growing awareness about the implications of global warming, non-biodegradable solid waste, harmful impact of pollutants etc., both marketers and consumers are becoming increasingly sensitive to the need for switch in to green products and services. While the shift to "green" may appear to be expensive in the short term, it will definitely prove to be indispensable and advantageous, cost-wise too, in the long run.

According to the American Marketing Association,

The marketing of products that are presumed to be environmentally safe. (Socially marketing definition): The development and marketing of products designed to minimize negative effects on the physical environment or to improve its quality. (Environment definition): The effort by organization to produce, promote, package and reclaim products in a manner that is sensitive or responsive to ecological concerns. Green marketing emphasizes environmental stewardship. Alma T. Mintu and Hector R. Lozada define green marketing as "the application of marketing tools to facilitate exchanges that satisfy organizational and individual goals in such a way that the preservation, protection and conservation of the physical environment is upheld." Walter Codington defines environmental marketing as "marketing activities that recognize environmental stewardship as a business development responsibility and business growth responsibility." Others have focused more on strategic dimensions in defining green marketing; for example, Martin Charter defines it as "a holistic and responsible strategic management process that identifies, anticipates, satisfies and fulfills stakeholder needs for a reasonable reward that does not adversely affect human or natural environmental well-being."

1.2 MEANING

5

“Green Marketing is the marketing of products that are presumed to be environmentally safe. Thus green marketing incorporates a broad range of activities, including product modification, changes to the production process, packaging changes, as well as modifying advertising. Yet defining green marketing is not a simple task where several meanings intersect and contradict each other, an example of this will be the existence of varying social, environmental and retail definitions attached to this term. Other similar terms used are Environmental Marketing and Ecological Marketing.

DEFINATION

6

Alma T. Mintu and Hector R. Lozada define green marketing as "the application of marketing tools to facilitate exchanges that satisfy organizational and individual goals in such a way that the preservation, protection and conservation of the physical environment is upheld." Walter Codington defines environmental marketing as "marketing activities that recognize environmental stewardship as a business development responsibility and business growth responsibility." Others have focused more on strategic dimensions in defining green marketing; for example, Martin Charter defines it as "a holistic and responsible strategic management process that identifies, anticipates, satisfies and fulfills stakeholder needs for a reasonable reward that does not adversely affect human or natural environmental well-being."

The definition also includes the protection of natural environment by attempting tominimize the detrimental impact, this exchange has on the environment.This second point is very important for human consumption by its very nature isdestructive to the natural environment. To be more accurate products making greenclaims should state they are “ less environmentally harmful” rather than “ environmentalfriendly.” Thus green marketing should look at minimizing environmental harm, notnecessarily eliminating it.The industrial houses has recognised that the entire system of production andconsumption determines environmental quality. Environmental impacts are a function ofthe way services are provided and the way goods are produced, delivered, used anddisposed off. Production and consumption are considered together because gains made by controlling, reducing or minimizing pollution from production can be soon overshadowed by the impactsfrom concurrent increases in the scale of demand for those services goods from growing consumer base.

Green Marketing in India

7

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 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. According to Jacquelyn Ottman, (author of "The New Rules of Green Marketing: Strategies, Tools, and Inspiration for Sustainable Branding" (Greenleaf Publishing and Berrett-Koehler Publishers, February 2011) 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.

Importance of Green Marketing

8

It is really scary to read these pieces of information as reported in the Times recently: "Air pollution damage to people, crops and wildlife in he US totals tens of billions of dollars each year". "More than 12 other studies in the US, Brazil Europe , Mexico , South Korea and Taiwan have established links between air pollutants and low birth weight premature birth still birth and infant death".

As resources are limited and human wants are unlimited, it is important for the marketers to utilize the resources efficiently without waste as well as to achieve the organization's objective. So green marketing is inevitable.

There is growing interest among the consumers all over the world regarding protection of environment. Worldwide evidence indicates people are concerned about the environment and are changing their behavior. As a result of this, green marketing has emerged which speaks for growing market for sustainable and socially responsible products and services.

Thus the growing awareness among the consumers all over the world regarding protection of the environment in which they live, People do want to bequeath a clean earth to their offspring. Various studies by environmentalists indicate that people are concerned about the environment and are changing their behavior pattern so as to be less hostile towards it. Now we see that most of the consumers, both individual and industrial, are becoming more concerned about environment-friendly products. Most of 0them feel that environment-friendly products are safe to use. As a result, green marketing has emerged, which aims at marketing sustainable and socially-responsible products and services. Now is the era of recyclable, non-toxic and environment-friendly goods. This has become the new mantra for marketers to satisfy the needs of consumers and earn better profits.

Green marketing is the process of developing products and services and promoting them to satisfy the customers who prefer products of good quality, performance and convenience at affordable cost, which at the same time do not have a detrimental impact on the environment. It includes a broad range of activities like product modification, changing the production process, modified advertising, change in packaging, etc., aimed at reducing the detrimental impact of products and their consumption and disposal on the environment. Companies all over the world are striving to reduce the impact of products and services on the climate and other environmental parameters. Marketers are taking the cue and are going green.

Green marketing was given prominence in the late 1980s and 1990s after the proceedings of the first workshop on Ecological marketing held in Austin, Texas (US), in 1975. Several books on green marketing began to be published thereafter. According to the Joel makeover (a writer, speaker and strategist on clean technology and green marketing), green marketing faces a lot of

9

challenges because of lack of standards and public consensus to what constitutes "Green". The green marketing has evolved over a period of time. According to Peattie (2001), the evolution of green marketing has three phases. First phase was termed as "Ecological" green marketing, and during this period all marketing activities were concerned to help environment problems and provide remedies for environmental problems. Second phase was "Environmental" green marketing and the focus shifted on clean technology that involved designing of innovative new products, which take care of pollution and waste issues. Third phase was "Sustainable" green marketing. It came into prominence in the late 1990s and early 2000.

Green marketing is a vital constituent of the holistic marketing concept. It is particularly applicable to businesses that are directly dependent on the physical environment; for example, industries like fishing, processed foods, tourism and adventure sports. Changes in the physical environment may pose a threat to such industries. Many global players in diverse businesses are now successfully implementing green marketing practices.

MARKETING MIX OF GREEN MARKETING

10

When companies come up with new innovations like eco friendly products, they can access new markets, enhance their market shares, and increase profits. Just as we have 4Ps product prices, place and promotion in marketing, we have 4ps in green marketing too, but they are a bit different. They are buttressed by three additional Ps, namely people, planet and profits.

A. PRODUCT:

The products have to be developed depending on the needs of the customers who prefer environment friendly products. Products can be made from recycled materials or from used goods. Efficient products not only save water, energy and money, but also reduce harmful effects on the environment. Green chemistry forms the growing focus of product development. The marketer's role in product management includes providing product designers with market-driven trends and customer requests for green product attributes such as energy saving, organic, green chemicals, local sourcing, etc., For example, Nike is the first among the shoe companies to market itself as green. It is marketing its Air Jordan shoes as environment-friendly, as it has significantly reduced the usage of harmful glue adhesives. It has designed this variety of shoes to emphasize that it has reduced wastage and used environment-friendly materials.

B. PRICE

Green pricing takes into consideration the people, planet and profit in a way that takes care of the health of employees and communities and ensures efficient productivity. Value can be added to it by changing its appearance, functionality and through customization, etc. Wal Mart unveiled its first recyclable cloth shopping bag. IKEA started charging consumers when they opted for plastic bags and encouraged people to shop using its "Big Blue Bag".

C. PLACE

Green place is about managing logistics to cut down on transportation emissions, thereby in effect aiming at reducing the carbon footprint. For example, instead of marketing an imported mango juice in India it can be licensed for local production. This avoids shipping of the product from far away, thus reducing shipping cost and more importantly, the consequent carbon emission by the ships and other modes of transport.

D. PROMOTION

11

Green promotion involves configuring the tools of promotion, such as advertising, marketing materials, signage, white papers, web sites, videos and presentations by keeping people, planet and profits in mind. British petroleum (BP) displays gas station which its sunflower motif and boasts of putting money into solar power. Indian Tobacco Company has introduced environmental-friendly papers and boards, which are free of elemental chlorine. Toyota is trying to push gas/electric hybrid technology into much of its product line. It is also making the single largest R&D investment in the every-elusive hydrogen car and promoting itself as the first eco-friendly car company. International business machines Corporation (IBM) has revealed a portfolio of green retail store technologies and services to help retailers improve energy efficiency in their IT operations. The center piece of this portfolio is the IBM SurePOS 700, a point-of-sale system that, according to IBM, reduces power consumption by 36% or more. We even see the names of retail outlets like "Reliance Fresh", Fresh@Namdhari Fresh and Desi, which while selling fresh vegetables and fruits, transmit an innate communication of green marketing.

Green marketer can attract customers on the basis of performance, money savings, health and convenience, or just plain environmental friendliness, so as to target a wide range of green consumersConsumer awareness can be created by spreading the message among consumers about the benefits of environmental-friendly products. Positing of profiles related to green marketing on social networks creates awareness within and across online peer groups. Marketing can also directly target the consumers through advertisements for product such as energy saving compact fluorescent lamps, the battery “powered Reva car, etc.

12

REASONS FOR USING GREEN MARKETING IN FIRMS

When looking through the literature, there are several suggested reasons for firms increased use of Green Marketing. Five possible reasons cited Organizations perceive environmental marketing to be an opportunity that can be used to achieve its objectives

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

5. Cost factors associated with waste disposal, or reductions in material usage forces firms to modify their behavior.

OPPORTUNITIES

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. 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 examples of firms who have strived to become more environmentally responsible, in an attempt to better satisfy their consumer need. McDonald's replaced its clam shell packaging with waxed paper because of increased consumer concern relating to polystyrene production and Ozone depletion. 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.

13

SOCIAL RESPONSIBILITY & GREEN MARKETING

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

GOVERNMENTALPRESSURE

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.

14

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.

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..

DARK SIDE OF GREEN MARKETING:

The Green Movement is still in its infancy and is just starting to build trust among people now concerned about the environment. These are people who, in many cases, are now willing to pay more for a green product. Should that product not be green or live up to its promises, many new green consumers will lose faith in the movement as a whole. However, green marketing poses huge dangers for marketers if they get it wrong: 1. Most customers choose to satisfy their personal needs before caring for the environment.

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

3. Many customers keep away from products labeled “green” because they see such labeling as a marketing gimmick,

and they may lose trust in an organization that suddenly claims to be green.

4. Green products require renewable and recyclable material, which is costly.

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

15

6. Water treatment technology, which is too costly

7. Majority of the people are not aware of green products and their uses

8. Majority of the consumers are not willing to pay a premium for green products

BENEFITS OF GREEN MARKETING

Today's consumers are becoming more and more conscious about the environment and are also becoming socially responsible. Therefore, more companies are responsible to consumers' aspirations for environmentally less damaging or neutral products. Many companies want to have an early-mover advantage as they have to eventually move towards becoming green. Some of the advantages of green marketing are,

It ensures sustained long-term growth along with profitability.

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

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

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

PROBLEMS OF GREEN MARKETING

Many organizations want to turn green, as an increasing number of consumers' ant to associate themselves with environmental-friendly products. Alongside, one also witnesses confusion among the consumers regarding the products. In particular, one often finds distrust regarding the credibility of green products. Therefore, to ensure consumer confidence, marketers of green products need to be much more transparent, and refrain from breaching any law or standards relating to products or business practices.

PATHS TO GREENNESS

Green marketing involves focusing on promoting the consumption of green products. Therefore, it becomes the responsibility of the companies to adopt creativity and insight, and be committed to the development of environment-friendly products. This will help the society in the long run. Companies which embark on green marketing should adopt the following principles in their path towards "greenness."

16

Adopt new technology/process or modify existing technology/process so as to reduce environmental impact.

Establish a management and control system that will lead to the adherence of stringent environmental safety norms.

Using more environment-friendly raw materials at the production stage itself.

Explore possibilities of recycling of the used products so that it can be used to offer similar or other benefits with less wastage.

Marketing Strategies

The marketing strategies for green marketing include: -

Marketing Audit (including internal and external situation analysis)

Develop a marketing plan outlining strategies with regard to 4 P's

Implement marketing strategies

Plan results evaluation

17

Popularity and effectiveness

Ongoing debate

The popularity of such marketing approach and its effectiveness is hotly debated. Supporters claim that environmental appeals are actually growing in number–the Energy Star label, for example, now appears on 11,000 different companies models in 38 product categories, from washing machines and light bulbs to skyscrapers and homes. However, despite the growth in the number of green products, green marketing is on the decline as the primary sales pitch for products. (NEEDS CITATION) On the other hand, Roper’s Green Gauge shows that a high percentage of consumers (42%)feel that environmental products don’t work as well as conventional ones. This is an unfortunate legacy from the 1970s when shower heads sputtered and natural detergents left clothes dingy. Given the choice, all but the greenest of customers will reach for synthetic detergents over the premium-priced, proverbial "Happy Planet" any day, including Earth Day. New reports, however show a growing trend towards green products.

Confusion

One challenge green marketers -- old and new -- are likely to face as green products and messages become more common is confusion in the marketplace. "Consumers do not really understand a lot about these issues, and there's a lot of confusion out there," says Jacquelyn Ottman(founder of J. Ottman Consulting and author of "Green Marketing: Opportunity for Innovation.") Marketers sometimes take advantage of this confusion, and purposely make false or exaggerated "green" claims. Critics refer to this practice as "green washing".

Greenwashing

The term “greenwashing” refers to all industries that adopt outwardly green acts with an underlying purpose to increase profits. The primary objective of greenwashing is to provide consumers with the feeling that the organization is taking the necessary steps to responsibly manage its ecological footprint. In reality, the company may be doing very little that is environmentally beneficial The term greenwashing was first used by environmentalist Jay Westerveld when objecting to hotelier's practice of placing notices in hotel rooms which asked their quests to reuse towels to “save the environment”. Westerveld noted that there was little else to suggest that the hoteliers were interested in reducing their environmental impacts, and that their interest in washing fewer towels seemed to be motivated by a concern to save costs rather than the environment. Since then greenwashing has become a central feature of debates about marketing communications and sustainability, with “awards” for greenwashing established and numerous campaigns, law and advices developed in an attempt to reduce or curb it.

18

Statistics

According to market researcher Mintel, about 12% of the U.S. population can be identified as True Greens, consumers who seek out and regularly buy so-called green products. Another 68% can be classified as Light Greens, consumers who buy green sometimes. "What chief marketing officers are always looking for is touch points with consumers, and this is just a big, big, big touch point that's not being served," says Mintel Research Director David Lockwood. "All the corporate executives that we talk to are extremely convinced that being able to make some sort of strong case about the environment is going to work down to their bottom line."

Target market

In 1989, 67 percent of Americans stated that they were willing to pay 5-10 percent more for ecologically compatible products. By 1991, environmentally conscious individuals were willing to pay between 15-20 percent more for green products. By 1993, Myburgh-Louw and O´Shaughnessy conducted a mail survey of female con-sumers in the UK to investigate their perceptions of environmental claims on the packaging of clothes detergents. They found that 79 percent of their sample agreed to pay up to 40 percent more for a product which was identical in every respect to their own brand and which had been proven to be green. An important challenge facing marketers is to identify which consumers are willing to pay more for envi-ronmentally friendly products. It is apparent that an enhanced knowledge of the profile of this segment of consumers would be extremely useful. Efforts to identify environmentally friendly consumers can be traced back to the early 1970s. as well as Anderson and Cunningham, were pioneers in studying the profile of socially re-sponsible consumers. Overall, their combined results portray a highly socially con-scious person as female, pre-middle aged, with a high level of education (finished high school) and above average socioeconomic status.

LOHAS

LOHAS stands for Lifestyles of Health and Sustainability, and describes an integrated, rapidly growing market for goods and services that appeal to consumers whose sense of environmental and social responsibility influences their purchase decisions. The Natural Marketing Institute’s (short: NMI) estimates the US LOHAS consumer market of products and services to be USD 209 billion – sold across all consumer segments.

19

The five LOHAS segments as defined by NMI include:

1. Lohas: Active environmental stewards dedicated to personal and planetary health. These are influence others heavily.

2. Naturalites: Motivated primarily by personal health considerations. They tend to pur-chase more LOHAS consumable products vs. durable items.

3. Drifters: While their intentions may be good, DRIFTERS follow trends when it is easy and affordable. They are currently quite engaged in green purchasing behaviours.

4. Conventionals: Pragmatists who embrace LOHAS behaviour when they believe they can make a difference, but are primarily focused on being very careful with their resources and doing the ‘right’ thing because it will save them money.

5. Unconcerned: Either unaware or unconcerned about the environment and societal issues mainly because they do not have the time or the means – these consumers are largely fo-cused on getting by.

Life Cycle Assessment

During the late 1980's also new instruments such as life cycle assessment (short: LCA) were invented which allowed ecological considerations to be introduced into marketing decisions.

The life cycle assessment model seeks to identify the main types of environmental impact throughout the life cycle of a product. LCA was developed according to ISO 14040. The main goal of the LCA is to define the energy and environmental profile of the finished products. The reasons to use LCA arose from the need to have a precise process accounting and to highlight potential improvements that could be used in order to increase the environmental, energy and economic efficiency and overall effectiveness of the processes. In addition, the purpose was to quantify the environmental advantages deriving from the use of recycled raw material.

20

Bio-fuels in green marketing

Biofuel is defined as solid, liquid or gaseous fuel obtained from relatively recently lifeless bio-logical material and is different from fossil fuels, which are derived from long dead biological material.

There are 2 common strategies of producing liquid and gaseous agrofuels.

1. Grow crops high in sugar (sugar cane, sugar beet]) or starch (corn/maize), and then use yeast fermentation to produce ethyl alcohol (ethanol).

2. Grow plants that contain high amounts of vegetable oil, such as oil palm, soybean, algae, jat-ropha, or pongamia pinnata. When these oils are heated, they can be burned directly in a diesel engine, or they can be chemically processed to produce fuels such as biodiesel.

Generation of Bio-fuels

1st Generation Bio-fuels

First generation biofuels are edible (both by humans and livestock) seeds or grains that are fer-mented or pressed to create oil which is used as biofuel.2/06/2009 Copyright Winfield Corpora-tion 2009

2nd Generation Bio-fuels

Second generation biofuels are created from non-food crops like stalks of wheat and corn and non-edible plants like Miscanthus, Castor Oil plants, and trees like Jatropha.

Benefits:

1. Does not divert food away from humans and livestock

2. Can significantly reduce disposal problems (orange peels, sawdust).

3. Planting trees for biofuel use reverses deforestation.

4. Inhibits soil erosion

3rd Generation Bio-fuels

Algae fuel, also called oilgae or third generation biofuel, is a biofuel from algae. It produces 30 times more energy per acre than land crops such as soybeans and algae is easy to grow, however algae oil is hard to extract.

Biofuel Program

Biofuel crops

21

Biodiesel Stoves

Oil Filtering

Education

Food Crops

Example for LCA

LCA is used for example in the building sector. Buildings today account for the 40% of the world’s energy use. The resulting carbon emissions are substantially higher than those of the transportation sector. New buildings using more energy than necessary are being built every day, and millions of today's inefficient buildings will remain standing until at least 2050. It’s therefore necessary to start reducing energy use in new and existing buildings in order to reduce the planet's energy-related carbon footprint. Growing interest, space, and attention in the architecture sector are directed to environmental issues according to the principles of green building. Mineral, vegetable, or animal materials such as perlite, vermiculite, rock wool, glass wool, cork, plant fibers (cotton, flax, hemp, coconut), wood fiber, cellulose, and sheep's wool can be used for the production of insulation panels.

Examples of Green Marketing

Phillips's "Marathon" CFL lightbulb

Philips Lighting's first shot at marketing a standalone compact fluorescent light (CFL) bulb was Earth Light, at $15 each versus 75 cents for incandescent bulbs. The product had difficulty climbing out of its deep green niche. The company re-launched the product as "Marathon," underscoring its new "super long life" positioning and promise of saving $26 in energy costs over its five-year lifetime.[34] Finally, with the U.S. EPA's Energy Star label to add credibility as well as new sensitivity to rising utility costs and electricity shortages, sales climbed 12 percent in an otherwise flat market.

Car sharing services

Car-sharing services address the longer-term solutions to consumer needs for better fuel savings and fewer traffic tie-ups and parking nightmares, to complement the environmental benefit of more open space and reduction of greenhouse gases. They may be thought of as a "time-sharing" system for cars. Consumers who drive less than 7,500 miles a year and do not need a car for work can save thousands of dollars annually by joining one of the many services springing up, including ZipCar (East Coast), I-GO Car (Chicago),[36] Flex Car (Washington State), and Hour Car (Twin Cities).

22

Electronics sector

The consumer electronics sector provides room for using green marketing to attract new customers. One example of this is HP's promise to cut its global energy use 20 percent by the year 2010. To accomplish this reduction below 2005 levels, The Hewlett-Packard Company announced plans to deliver energy-efficient products and services and institute energy-efficient operating practices in its facilities worldwide.

Products & Services

Now companies are offering more eco-friendly alternatives for their customers. Recycled products for example, are one of the most popular alternatives that can benefit the environment. These benefits include sustainable forestry, clean air, energy efficiency, water conservation, and a healthy office. One example, is the E-commerce business and office supply company Shoplet which offers a web tool that allows you to replace similar items in your shopping cart with greener products.

Introduction of CNG in Delhi

New Delhi, capital of India, was being polluted at a very fast pace until Supreme Court of India forced a change to alternative fuels. In 2002, a directive was issued to completely adopt CNG in all public transport systems to curb pollution.

Green Marketing Difficulties

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 environ-mentally conscious products and companies, consumers' efforts to do so in real life have re-mained sketchy at best.

1. Perception that eco-friendly products are not as good as other products.

2. Overuse, everyone is suddenly trying to position their company as green and that their products are eco-friendly.

3. Lack of standards / public agreement. What is green?

4. "Green washing"

McDonald’s Counters Criticism With Green Marketing Effort

23

Fast food giant McDonald’s is trying to show consumers its “greener” side with a new institutional marketing effort, “Global Best of Green.”

The full report details about 80 McDonald’s initiatives around the world, such as:

About 80 percent of packaging used by McDonald’s Europe comes from renewable re-sources.

In Canada, switching from bleached white napkins to plain brown has saved $1.3 million annually, while reducing energy, wood and water use.

U.S. restaurant locations recycle about 13,000 pounds of used cooking oil per year, on average.

Using a fryer that requires less oil allows restaurants to cook the same product with 40 percent less oil, saving 4 percent in energy over other fryer models.

U.S. locations completing an energy survey identify savings of $3,000-6,000. McDon-ald’s USA recognizes “Energy All-Stars,” or store managers that have provided examples for others.

In France, 10 restaurants that have committed themselves to an interactive software, Eco-Progress, have reduced electricity consumption 11 percent over a few months.

McDonald’s Mexico is testing solar hot water heaters in four locaitons to reduce use of liquified petroleum gas, with a correspondnig 2.7 percent decrease in monthly LP gas consumption and a 19 percent drop in carbon emissions.

McDonald’s Sweden is using CO2 detectors in 24 restaurants to adjust ventilation sys-tems to the amount of customers in the store, reducing electricity use 15 percent annually.

McDonald’s Europe is serving salads in cardboard bowls instead of plastic dishes, and wooden coffee stirrers instead of plastic.

In the U.S., decreasing the weight of polyproylene cold cups has decreased costs by 6 percent and saved nearly 1,000 tons of resin.

Various anti-littering marketing campaigns have been implemented in Portugal, Italy, Switzerland, the UK, Australia, Germany and other nations.

A variety of different waste and recycling bins have been tested in certain countries. A German model achieved a 90 percent recycling rate.

24

Restaurants in Switzerland feature a separate recepticle for organic waste, which is sold to Kompogas, which ferments the waste into biogas.

Despite its efforts, McDonald’s has been criticized for the waste it creates around the world.

In the UK, McDonald’s is responsible for 29 percent of all takeaway litter, according to The Mail.Greenpeace has alleged that the Brazilian soya that McDonald’s feeds its chickens is responsible, in part, for the destruction of rain forest lands, according to Wikipedia.Eric Schlosser’s 2001 book Fast Food Nation claimed that McDonald’s uses political influence to put profits before people’s health and the social conditions of its workers.

Back in 1990, London Greenpeace, which bears no connection to the international pressure group Greenpeace, distributed leaflets entitled “What’s wrong with McDonald’s?”, criticizing its environmental record, among other things. McDonald’s sued the group for libel, resulting in one of the longest-running civil cases in British history.

25

CONCLUSION

Green marketing is based on the premise that businesses have a responsibility to satisfy human needs and desires while preserving the integrity of the natural environment. Indeed, there are significant indications that environmental issues will grow in importance over the coming years and will require imaginative and innovative redesign and reengineering of existing marketing efforts on the part of many businesses. clever marketer is one who not only convinces the consumer, but also involves the consumer in marketing his product. Green marketing should not be considered as just one more approach to marketing, but has to be pursued with much greater vigor, as it has an environmental and social dimension to it. With the threat of global warming looming large, it is extremely important that green marketing becomes the norm rather than an exception or just a fad. Recycling of paper, metals, plastics, etc., in a safe and environmentally harmless manner should become much more systematized and universal. It has to become the general norm to use energy-efficient lamps and other electrical goods. Marketers also have the responsibility to make the consumers understand the need for and benefits of green products as compared to non-green ones. In green marketing, consumers are willing to pay more to maintain a cleaner and greener environment. Finally, consumers, industrial buyers and suppliers need to pressurize effects on minimize the negative effects on the environment-friendly. Green marketing assumes even more importance and relevance in developing countries like India.

26

BIBLIOGRAPHYBooks

Kothari C.R., Research Methodology, New Age International Publishers “RevisedSecond Edition” 2). Raju B.N. Human Resource Management, Discovery Publishing House “ First Edition”.3). Chhabra T.N. Human Resource Management, Dhanpat Rai & Co.“Fifth Revised Edition”.

Sites4). http://www.google.com/5). http://www.humancapital.com/6). http://www.OpenLearningWorld.com/7) http://www.wikepedia.com/

27