Green Marketing Opportunities

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Green Marketing in India: Opportunities and Challenges

Swapna latha Aggani

Research Scholar, Manav Bharati University

Himachal Pradesh, India

Email:[email protected]

Abstract:

Although environmental issues influence all human activities, few academic

disciplines have integrated green issues into their literature. This is especially true inmarketing. 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 integratedenvironmental issues into all organizational activities. Smart business houses have

accepted green marketing as a part of their strategy. Though our understanding about

green marketing still in the stage of infancy, in this paper the author is trying toidentify key ideas in relation to promote green product that may be most relevant to

both scholars and the practitioners of green marketing. This paper will attempt to

introduce the terms and concept of green-marketing; about the importance of greenmarketing; examine some reasons that make the organizations interested to adopt green

marketing philosophy; it highlights the positive and negative aspects; social

responsibilities and opportunities of green marketing. Finally it concludes with some

problems that organization may face to implement green marketing.

Key Words:Human activities, natural environment and green marketing etc..

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mailto:[email protected]:[email protected]


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Introduction:

People around the world are becoming more aware of the environmental stresses

humans are placing on the planet. Newspapers, magazines, television, and other

media feature wide coverage of environmental problems, whether they are local (e.g.,

depleted fisheries and air pollution) or global (e.g., ozone depletion and climate change).

Many consumers now display concern about environmental deterioration. Increasingly often

they ask how much impact a product will have on the environment during its lifespan or

during its disposal. This is the major impetus for green products and green marketing. A

closely related reason is the competitive advantage or sales potential that some corporations

now see in green products. Green Marketing is an attempt to characterize a product as

being environmentally friendly. In general green products are made from recycled content

and/or designed for reuse, recycling, or remanufacturing. They are usually non-toxic, energy

efficient, and durable. However, green is a relative term and depends on the individual

situation. Environmental issues have gained importance in business as well as in public

life through out the world. It is not like that a few leaders of different countries or few

big renowned business houses are concerned about the day to day deterioration of

oxygen level in our atmosphere but every common citizen of our country and the

world is concerned about this common threat of global warming. So in this scenario of

global concern, corporate houses has taken green-marketing as a part of their strategy

to promote products by employing environmental claims either about their attributes

or about the systems, policies and processes of the firms that manufacture or sell them.

Clearly green marketing is part and parcel of over all corporate strategy; along with

manipulating the traditional marketing mix (product, price, promotion and place), it

require an understanding of public policy process. So we can say green marketing

covers a broad range of activities.

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Literature Review:

Different writers have given different definition about green marketing which

tried to cover all major components of green marketing.

According to Polonsky (1994) - green or environmental marketing consists of all

activities, designed to generate and facilitate any exchange indented to satisfy

human needs and wants, such that the satisfaction of these needs and wants occur

with minimum detrimental impact on the natural environment.

Mintu and Lozada (1993) defined 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.

According to Stanton and Futrell (1987)- all activities designed to generate and

facilitate any exchanges intended to satisfy human needs and wants; therefore it

ensures that the interest of the organization and all it consumers are protected, as

voluntary exchange will not take place unless the buyers and sellers are mutually

benefited. The definition also includes the protection of natural environment by

attempting to minimize the detrimental impact; this exchange has on the environment.

Importance of Green Marketing :

Since early 1990s, a major concern on ecological impact of industrial house on

environment has been surfaced on marketplace. Not only the relation between human,

organization and natural environment being redefined ,but the implication thereof

are being interpreted; because of these, new perceptions are being formed or re-

evaluated on issues like environmental friendly products, recycle ability, waste-

reduction, the cost associated with pollution and the price value relationship of

environmentalism. Pressure from various stakeholders, Govt., environmentalists,

NGOs, consumers is placed on businesses, which in turn keeps them under constant

and relentless watch in their daily operations. A direct result can be seen in

developed and developing countries where Govt. became stricter in imposing

regulations to protect environment; at the same time, the consumers of these

countries are being more and more outspoken regarding their needs for

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environmentally friendly products, even though questions remain on their willingness to

pay a higher premium for such products!

So in this era where consumers determine the fate of a company, green

marketing imparts a proactive strategy for these companies to cater the market by

imparting nature- friendly products/ services which otherwise reduce or minimize

any detrimental impact on environment. A green- marketing approach in the

product area promotes the integration of environmental issues into all aspects of

the corporate activities; from strategy formulation, planning, re-engineering in

production process and dealing with consumers. So to remain competitive within the

challenge thrown by the environment protectionists, the companies will have to find

answer through their marketing strategies, product& service redesign, customer

handling etc. in this endeavor the companies may go for new technologies for handling

waste, sewage and air pollution; it can go for product standardization to ensure

environmentally safe products; by providing truly natural products.

Green Marketing in Asia:

While green marketing has taken the US and Europe by storm, marketers and consumers in

Asia show few signs of jumping on the bandwagon... yet. Fad mad Japan is the main

exception, where eco-friendly slogans are emblazoned on goods ranging from designer

clothes and beer cans to gift-wrapping in department stores. Just how deep this

commitment goes is anyone's guess. Elsewhere in Asia, environmental problems receive

scant attention as both consumers and producers concentrate their energies on attaining

the goals of economic development. Tropical rain forests continue to be cut down,

waterways and air are befouled and concern for the environment is often dismissed as a

luxury for rich countries only. The ways of the West have spread to Asia, changing age-old,environmentally sound traditions. The supermarket is replacing wet markets; the

convenience of canned and bottled products is weaning housewives away from fresh foods

bought daily; plastic, glass, tin and polystyrene are wrapped around purchases with blithe

disregard for their future as garbage or litter, and plastic bags are supplanting the

housewifes basket in which all purchases once traveled home from the market.

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The concepts of convenience and disposability the very qualities which

appeal to evolving consumer markets have dangerous implications for the

environment and its resources. This cannot go on forever the problems facing the

future of the Earth will not get solved by themselves. At the very least, as wealth

grows in this part of the world, consumers will demand better surroundings in which to

enjoy their rising standards of living. Then the pressure will be on marketers to provide

buyers with goods produced and presented in a more ecologically friendly way. This

trend is already apparent in South Korea and Taiwan where consumer pressure groups

are fighting for a cleaner environment. Marketers may not feel motivated to change

until more Asians demand greenness with their purchasing power but those who wish

to capture some of the North American, European or Australian markets had better be

prepared to make their products meet the standards now being demanded by consumers

there.

Green Marketing in India:

It's far from a groundswell yet, but slowly corporates across India are

hitching themselves to the green bandwagon. A survey is conducted by BT (Business

Today) & Tata Energy Research Institute (TERI) to identify top ten green companies

of India. In March 2000, BT and the Tata Energy Research Institute (TERI) decided to

conduct the first-ever study of environmental practices in corporate India. The survey

had two aims. The first was to analyze key trends and dominant environmental practices

as observed in Indian companies. The second was to identify the 10 'greenest' companies in

terms of the maturity of their environmental systems and practices. A total of 11

parameters were identified for analyzing and evaluating the corporate.

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Greenest companies are:

ABBICI India

Bayer (India) Indian Aluminium Co

Clariant (India) Orchid chemicals and pharma.

Coromandel Fertilisers Philips India

Gujarat Ambuja Cements Tata Iron & Steel Co

Positive Aspects of Green Marketing:

1. First and foremost, a good green marketing program is one that either: adds

renewable that would not already be added or supports renewable projects that

might not otherwise continue to operate. If these things are already happening and

being paid for by all, then the program doesn't meet the bottom-line test: green

marketing programs must make a difference.

2. A sign of a good green marketing program is one that has strong links to local

environmental groups and that achieves broad support among regional and

national groups with an interest in promoting renewable power. Public Service of

Colorado, for example, has developed a close working partnership with the Land

and Water Fund and other environmental groups in the state.

3. A green marketer that is seriously interested in greening the electric system will

have a program that is linked to a largervision and a strategic plan for making

renewable an increasingly larger part of the generation mix. A good example ofthis is Central and Southwest's recent decision to acquire a significant amount of

renewable capacity, with the intent of rate basing a good portion of it, and

subscribing the rest through a green pricing program.

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4. For green marketing programs to be successful in the long run, they should both

improve the environment and be fair to consumers. Prices should not be

excessively higher than the actual cost of the resources in the portfolio. This is

particularly true for green pricing programs, which are scrutinized by regulators,

and in imperfectly competitive markets, because in these cases, there is no real

competition in the green market. In markets that are vibrantly competitive and in

which consumers have good information, this is less of a problem since lower-

cost providers can compete to displace those providers charging excessive prices.

Negative Aspects of Green Marketing:

1. Selling green power at a mark-up that would have been produced anyway with the

cost shared by all. An example of this would be renewable power that is already

included or would be included in a utility's rate base without the green program.

These types of programs sell nothing as if it is something, which is worse than

doing no green marketing at all, because these programs are fundamentally unfair

and breed consumer cynicism. If we permit these types of programs to occur, they

will undermine the market for those marketers who are actually making a

difference.

2. Programs that do not in some way directly benefit the renewable generator. An

example of this would be a utility that has an existing power purchase contract

with a renewable generator, but does not flow any benefit through to the

generator.

3. Programs that make false claims and do not adequately inform consumers about

the nature of their product. For example, selling "nuclear and coal free" power

when consumer dollars are sent to a nuclear- and coal-owning utility. This is a

recipe for creating cynicism, once the anti-nuclear consumers find out their

dollars have been channeled to the owners of plants they dislike. Electrons and

dollars are fungible, so, in these kinds cases, unless the marketer can prove to the

public that the consumer dollars they are collecting do not in any way support the

nuclear and coal plants, and support only the resources claimed as "green," such

claims should not be made. This is not to say that portfolios necessarily need to be

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Opportunities of Green Marketing:

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.

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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." Mobil Corporation who has followed the

competition and introduced "biodegradable" plastic garbage bags, as because

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.

Future of Green Marketing:

Companies are likely, either due to regulation or voluntary action; to provide their

customers with more and more information about their products environmental impact so

that they will be able to decide for themselves if a product suits their needs. Environmental

marketing presents important opportunities for industry. Taking advantage of them

requires creativity, foresight and environmental commitment. It means redefining the roles

of business and products and working co-operatively with governments, consumer groups and

NGO's. It may also mean a more visible role of CEOs. Products can certainly increase the

'quality of life', but their environmentally destructive impacts must be amended if we are to

move towards sustainability.

Conclusion:

As the demand for green products undoubtedly exists, Green Marketing

provides an opportunity to the companies to increase their market-share by introducing eco

friendly products. Stricter environmental regulations across the world, growing

consumer preference for eco-friendly companies, and the inherent cost advantages in

lowering toxic waste, are encouraging industries big and small to clean up. Result of a

survey conducted showed that, consumers are not overly committed to improving their

environment and may be looking to lay too much responsibility on industry and

government. Though its the responsibility of the firm to produce products, which are

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having minimum impact on the environment, but ultimately its the consumer who is

having responsibility to use eco friendly products. Consumers are not too much concerned

about the environment but as they have become more sophisticated, they require clear

information about how choosing one product over another will benefit the environment.

Consumer education results in their empowerment. Empowered consumers choose

environmentally preferable products when all else is equal. Ultimately green marketing

requires that consumers Think Green, Think clean, Think Eco friendly i.e. they want a

cleaner environment and are willing to "pay" for it, possibly through higher priced goods,

modified individual lifestyles, or even governmental intervention. Until this occurs it

will be difficult for firms alone to lead the green marketing revolution.

References:

Carlson, Les, Stephen Grove and Norman Kangun (1993), A Content Analysis ofEnvironmental Advertising. Journal of Advertising Vol- 22(3), pg 27-38.

Crane, A. (2000), "Facing the backlash: green marketing and strategic re-orientation in

the 1990s", Journal of Strategic Marketing, Vol.8, No.3, pp. 277-96.

Elkington, J. (1994), "Towards the sustainable corporation: win business strategies for

sustainable development", California Management Review, Vol. 36 No.2 pp. 90-100.

Frankel, C. (1992) Blueprint for green marketing, marketing executive review,

2(5):pg22-23.

Freman, R.E and J. Liedtka. (1991) Corporate Social Responsibility: A CriticalApproach. Business Horizons 34(4): pg 92-98.

Ottman JA, Stafford ER, Hartman CL, (June-2006) Avoiding Green Marketing

Myopia, The Environment , Vol-48, No-5, pg.22-26.

Ottman J.A (1998, 1st Edition), Green Marketing: Opportunity for Innovation, NTC-

McGraw -Hill Publishing Co. Ltd.

Prakash, A. (May 2002) Green Marketing, public policy and managerial strategy

Business Strategy and the Environment , Bus.Strat.Env.II, pg 285-297.

Saxena Rajan (2006, 3rd Edition), Marketing Management, New-Delhi, TataMcGraw- Hill Publishing Co. Ltd.

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