Chapter 2 Of Green Marketing

UNDERSTANDING CONSUMER PERCEPTION AND PRIORITIES TO MAXIMIZE BUSINESS

Carbon labels show consumers the Carbon Content of an individual product. An items content is the total amount of carbon dioxide emitted from very stage of its production and distribution, from source to store. This is also known as embedded carbon, or a carbon footprint. Todays consumer is more ethically and environmentally aware than ever before, and increasingly so with regard to the consumption of food and drink. In the media, on the shelves, the focus on reducing our carbon footprint is constantly present, and the push to understand where our food is from increasing. Carbon labeling is a really recent development. The focus on reducing carbon footprint is constantly present, and the push to understand what they are purchasing and consuming. But to make it a success, the understanding regarding: a) What they are purchasing? b) How are they prioritizing- between organic, fair trade, carbon friendly and so on? c) Whether the consumers are getting what they want to purchase?

Study Findings on the Basis of Literature Regarding Consumer Behavior:

I. Consumers show different attitudes to issues like: a) Food quality is shoppers most important concern. Price is also very important for those on lower incomes.

b) Whether health, environmental and social issues are very important in relation to the food they buy. c) Concerns for health, environmental and social issues vary with household income or not. d) Concern for health, environmental and social issues increase with age or not. e) Women do most of the shopping, and they are more concerned about health, environmental and social issues than men. f) Attitudes vary regionally, and there is particularly strong concern in the South West.

II.

Familiarity with labels for different consumers is different: How familiar are you with each of the following types of information on product packets on the basis of: a) Most people are at least somewhat familiar with most forms of product information. b) Familiarity with the product information is much higher among people who think the issues are very important.

III.

Use of labels had different perceptions for different consumers: use of the following types of information when making decisions about what consumers buy is different for every consumer on the basis of: a) Product information is used by many consumers. b) There is a clear link between concern about health, environmental and social issues and use of relevant product information.

c) The gap between attitudes and behavior is wider in relation to environmental and social issues that in it is with the mainstream health. d) There is little variation with income, except organic labels are used more by people with higher incomes. e) Product labeling is generally used more by older people. f) Women use nutrition information more, but broadly similar numbers of men and women use organic and Fair trade information. g) Different patterns of use in different regions.

IV.

Use of other sources of information is different on the basis of: a) Product packaging information is used often by many more people than most other sources of information.

V.

Barriers to greater integration into shopping behavior on the basis of changing patterns of consumption mean that increasingly consumers are considering the social, environmental and health issues associated with production and consumption: a) Products too expensive is the number one barrier. b) Takes too much time is the second biggest barrier to choosing healthy food. c) I dont know enough about it is the second biggest barrier to choosing environmentally friendly and socially responsible food. d) Other barriers are significant or not, like: Unavailability of products (either altogether, or of sufficient quality). Lack of understanding about the issues in general.

 Difficulty in understanding the product information. Concerns about the reliability of the product information.

Limitations towards Positive Consumer Perception

The three main barriers to consumers taking health, social and environmental issues like carbon labeling into greater account are price, time and lack of knowledge. 1. The Limits of Consumer Understanding: Despite the very extensive coverage of issues such as climate change, relatively few consumers are making the link between these big issues and their day-to-day behavior. For those wishing to change consumer behavior there is clearly a need to increase public understanding. If public understanding of these linkages can be increased then the findings of their survey would suggest that the behavior of large number of consumers could be changed substantially quite quickly.

2. The Limits of Consumer Power: Changing consumer behavior is seen as a key element in driving systematic change, particularly around sustainability and tackling poverty and inequality. This research will also reflect some of the barriers through which further changes in consumer behavior can be overcome. The real test is now for action that will make a difference for all consumers, particularly those from lower income households and it is everyones responsibility to make this happen.

Attributes of the Green Consumers

To take the advantage of the emerging green market, it is important to understand who green customers are and the factors influencing their purchasing decisions and behavior. Attributes of Environmentally Conscious Consumers Target products to women who generally buy on behalf of men and families. Will most likely be well educated, young adult Use the influence of children to encourage women who have more money to spend. parents to try green products. The green consumers of the future are generally Implication for Green Marketers

knowledgeable about environmental issues. They should be offered samples and

increments to try products. Will expect green products to function as non- Effectively communicate assurance of qualitygreen products and wont pay much extra or for example quality of performances, look, sacrifice quality for greener products. feel, fit, comfort, durability.

Will not buy green products on the basis of Like environmental attributes such as energy environmental benefits alone. Products choice efficiency or toxic substance reduction with is still based on whether it meets their basic other benefits such as lower price,

want or need. Environmental features are convenience, or quality of life improvements. added selling points. Will be more likely to respond to product Emphasize personal benefits by using terms

attribute that will personally benefit them.

such as safe, non-toxic, cost effective rather than more generalized green messages such as biodegradable or ozone friendly.

Will tolerate only minimal inconvenience in Making the use of product simple- e.g. using green products and dont want to go out minimize or eliminate refilling bottles. Select of their way to buy them. mainstream distributors wherever possible. Offer one-stop shopping and eye appealing displays. Will be analytical, eager to learn, and can be Reinforce product benefits with evidence of cynical about corporate claims for green corporate performance and improvements. product unless they have independent Educate consumers about environmental issues and your efforts through a variety of means. Provide credible environmental endorsements. Use labels in compliance with government labeling guidelines, to convey precise, detailed information about your product and its packaging. Will not expect companies to have perfect Communicate your steps towards sustainability green credentials, but will look for a and commitments to improvement. Seek

verification.

commitment to improve and evidence backed feedback and promote your efforts to respond by facts. to customer concerns.

Green Marketing Strategies versus Conventional Marketing CONVENTIONAL MARKETING

Consumers Products Consumers with lifestyles

GREEN MARKETING
Human beings with lives Cradle flexible

Cradle-to-gave one size fits for all Cradle-to products services

Marketing

and Selling oriented and benefits

Educational Values

Communication Corporate Receptive, Independent, competitive, Proactive, Interdependent, Holistic, long

Departmentalized, Short term oriented profit cooperative, maximizing. term

Environmentally Conscious Consumer Behavior

Environmentally Conscious Behavior (ECCB) is consumer behavior based on some awareness of the environmental impacts associated with a product or service, and a desire to reduce those impacts. Many researchers in the field of consumers psychology and market research have demonstrated a substantial growth in ECCB across a range of markets. It has been demonstrated through case studies that how product developers and marketers have capitalized on this positive attitude and effectively differentiated their product in terms of their environmentally friendly character. The term environmental consciousness does not have a standardized definition in the body of academic literature; the reason can be due to arousal of the term out of political and everyday

language. Environmental consciousness is the desire to protect flora and fauna, a willingness to scrutinize the consequences of economic activity and a willingness to combine long-term with short-term planning.

What drives Environmentally Conscious Consumer Behavior

It has been proved through research across a wide range of academic disciplines including economics, psychology and sociology, that there are many different motivations and influences that drive consumer behavior. For every individual, the ultimate purchasing decisions and rationale to reinforce what is environmentally correct will vary. While individuals have deferring levels of need, values and knowledge related to various resources and their uses, no single answer on what is better will satisfy the value and beliefs of all people. Purchasing habits fluctuate over time with every generation, but because of increased access to new technology and uncertainty due to world events and insecure futures, the consumer trends of generations have changed. In order for businesses to appeal to these Environmentally Conscious Consumers, it is important to understand Who are environmentally conscious consumers. What are the factors influencing their purchasing decisions and behavior. What are the buying habits and how they have changed.

The proposed framework presents Environmentally Consciousness Consumer Behavior (ECCB) as a process involving consumer environment, constructs, mediators and outcomes. The underlying influencers of ECCB are complex and different approaches to consumer motivation account for them in various ways.

CONSUMER ENVIRONMENT INPUT

Social Stimuli, Marketers Efforts

INFORMATION PROCESSING
Exposure, Attention, Comprehension, New Knowledge and Belief, Integration

CONSTRUCTS
Values and Beliefs, Motivation, Attitude, Knowledge

MEDIATORS
Product Knowledge, Involvement, Habit, Cost, Opportunity, Availability, Convenience

OUTCOME
Attention, Product Comprehension, Purchase Avoidance

EXTERNAL FACTORS
Cultural Norms, Group Influence, Family Influence, Unexpected Circumstances

CONSUMER ENVIRONMENT CONSUMER ENVIRONMENT CONSUMER ENVIRONMENT Green Buyers and Green Consumers CONSUMER ENVIRONMENT
Research about the identity and nature of green consumer has been the central character in the development of green marketing, as business attempt to understand and respond to external pressures to improve their environmental performance. Marketing practitioners and academics

are attempting to identify and understand green consumers and their needs, and to develop market offerings that meet these needs.

SEGMENTATION OF GREEN CONSUMERS True-Blue Greens- The most environmentally active segment of the society. Greenback Greens- Those most willing to pay the highest premium for green products. Spouts- Fence-sitters who have embraced environmentalism more slowly. Grousers- Uninvolved or disinterested in environmental issues, who feel the issues are too big for them to solve. Apathetic- The least engaged group who believe that the environmental indifference is main stream.

Apart from this Natural Marketing Institute(NMI) divides the market into following categories: Lohas- Very progressive on environment and society, looking for ways to do more; not too concerned about price. Naturalites- Primarily concerned about personal health and wellness, and use many natural products; would like to do more to protect the environment. Conventional- Practical, like to see the results of what they do; interested in green products that make sense in the long run.

Drifters- Not too concerned about the environment, figuring weve got time to fix the environmental problems; dont necessarily buy a lot of green products.

Unconcerned- Have other priorities, not really sure what green products are available and probably wouldnt be interested anyway; they buy products strictly on price, value, quality and convenience.

Consumer Information and Education

If managers believe that consumers view greenness as a motivating variable, they should invest in conveying information through advertising, direct mailing, brand labels, in-store displays and pamphlets. The important points to be noted here are: a) Firms willing to provide clear, comprehensive and credible information must ensure that consumers have low cost to access it. b) Governmental policies and stakeholder initiatives can be important in reducing consumers search, information or transaction costs. c) Regulators can publish and disseminate it to the media by press releases and post it on the internet. d) Stakeholders can use the media as well as use their organization-specific vehicles such as newsletters.

Green marketing can be successfully implemented by use of ICT in cost effective way: By developing compelling, concise messages, plan innovative ways to repeatedly deliver, identify appropriate links within network of political, legislative, nonprofit organization and media, develop concept based programs and events.

Utilize extensive relationship with local and national media to get a clients message to the right media targets.

Identify venues, plan tours, identify audiences, and organize meals, speakers and press.

Strategies and plan joint PR initiatives as well as joint advertising campaigns and events to cross-promote companies and organization campaigns.

Help develop identify and branding for print, broadcast and digital mediums. Consulting and creation of a corporate design, brochures, leaflets, info materials. Develop web sites, e-mail campaigns, and banner advertising. Develop creative print, broadcast and digital advertising, identify advertising targets and purchase appropriate media slots.

Towards a Green Marketing Partnership ICT and cost Management is the Key
Worldwide evidence indicates people are concerned about the environment and are changing their behavior accordingly. As a result there is a growing market for sustainable and socially responsible products and services. The types of businesses that exist, the products that they produce and their approaches to marketing are changing. Successful green marketers will reap the rewards of healthy profits and improved shareholder value and help in making the world a better place for future generations.

Identify and Close the Green Gap

Right now, gaps exist on both sides of the market, between where customers are today and the preferences that will help sustain a future market. There is also a gap, between todays products and green designs of tomorrow. Greening the market means closing the gaps. A process must be established that progressively closes these gaps, so that the market can evolve into one that meets all customer needs while delivering vastly superior environmental performance. Here Environmental Values would mean care about health, air quality, toxics and concerns for future generations. The focus on the market oriented mechanisms is also required along with R&D to close the gaps. These gaps cab be closed by innovatively addressing the following area: a) Green product: This includes identifying customers environmental needs, developing environmentally responsible green products like-products made from recycled goods, products which save water, energy, gasoline, money, etc. b) Green Value and lesser Price: It has been analyzed that most customers will only be prepared to pay a premium if there is a perception of additional product value. Environmentally responsible products are often less expensive when product life cycle costs are taken into consideration even though their purchase cost is high. For example fuel efficient vehicles, water efficient printing and non-hazardous products decrease overall costs. Over a period of time due to research and advancement in technologies the companies will manage to produce environment friendly product at low costs and will even sell at low price.

c) Customer Information: Idea of Green needs to be communicated to the customers through campaigns and advertisements. d) Special and Green Place: the location must differentiate green marketers from competitors. This can be achieved by in-store promotions and visually appealing displays or using recycled materials to emphasize the environmental and other benefits. e) Green promotion Aided by ICT: smart green marketers will be able to reinforce environmental credibility by using sustainable marketing and communication tools and practices. E-marketing is rapidly replacing more traditional marketing methods. For example, many companies are providing electronic statements by e-mail.

Greening the Market Means Closing the Gaps

Demand
Consumer Preference

Supply
Product Plans

Future Market

Environmental Values

Green Design

f) Partnership: The companies should recognize the value of alliances with other companies, environmental groups and research organizations when promoting their environment commitment. g) Trust: Corporate should never overstate environmental claims or establish unrealistic expectations, and communicate simply and through sources that people trust. h) Publicize Stories of the Companys and Employees Green Initiatives: This can be done through networks to promote green credentials and achievements.

i) Compete for Environmental Awards: The companies should try to enter into environmental award programs to enhance their environmental profile/credentials before customers and stakeholders.

Identify and Target the Green Consumer

According to David Wheeler, the green consumers are distributed somehow like this: Green Consumer, who no matter what will only buy the green product. Green Activists that may not be able or willing to pay more, or to travel the distance to the specialist store where the offered product is, but try to promote the product and try to buy it any time they can, when the budget and the opportunity allow them. Latent Greens, who are willing to pay more for the product if the properties of the product, are same as of the others. Inactive, who only would buy a green or social product if the price and properties are the same that the non-denominational ones.

Green Activists 10%

Green Consumers 27%

Inactive 23%

Latent Green 40%

Fig: Types of Green Consumers

Thus to take the advantage of the emerging green market,

a) It is important to understand who green consumers are and the factors influencing their purchasing decisions and behavior. b) Target products to women who generally buy on behalf of men and families. c) Use the influence of children (green consumers of the future) to encourage parents to try green products. d) Offer samples and incentives to try products, effectively communicate assurance of quality-for example quality of performance, look, feel, fit, comfort, durability, etc. e) Linking environmental attributes (energy efficiency or toxic substance reduction) with other benefits such as lower price, convenience or quality of life improvements, emphasis on personal benefits by using terms such as safe, non-toxic, cost effective, rather than biodegradable or ozone friendly, making use of the product simple- for example, minimize or eliminate refilling bottles, select mainstream distributors where possible, offer one-stop shopping and eye-appealing displays, reinforce product benefits with evidence of corporate environmental performance and improvements.

For green marketing to be effective, you have to do three things; be genuine, educate your customers, and give them the opportunity to participate.

1)Being genuine means that: a) that you are actually doing what you claim to be doing in your green marketing campaign and b) that the rest of your business policies are consistent with whatever you are doing that's environmentally friendly. Both these conditions have to be met for your business to establish the kind of environmental credentials that will allow a green marketing campaign to succeed.

2) Educating your customers isn't just a matter of letting people know you're doing whatever you're doing to protect the environment, but also a matter of letting them know why it matters. Otherwise, for a significant portion of your target market, it's a case of "So what?" and your green marketing campaign goes nowhere.

3) Giving your customers an opportunity to participate means personalizing the benefits of your environmentally friendly actions, normally through letting the customer take part in positive environmental action.

Let's put the three essential elements of a successful green marketing campaign together by looking at an example.

Suppose that you have decided that your business will no longer use plastic bags to wrap customer purchases. You know that the traditional plastic bag takes about one thousand years to decompose (cbc.ca) and want to do your part to stop the proliferation of plastic bags in landfills. You feel that this is the kind of environmental action that will be popular with potential customers and a good opportunity to do some green marketing.

To be genuine, you have to ensure that none of your business practices contradict your decision not to use plastic bags. What if customers who happen to walk behind your store see an overflowing trash bin filled with paper, cardboard and plastic bottles? Obviously, he or she will decide that you don't care as much about recycling as you say you do in your green marketing.

Not using plastic bags appears to be environmental no-brainer, but you will still need to educate your target market. Did you know that a single use plastic bag takes about one thousand years to

decompose? I didnt until I researched this article and probably a fair number of otherwise environmentally conscious people don't either. This one little factoid about plastic bags could be used as part of your green marketing campaign - all by itself it lets the public know why single use plastic bags are environmentally disastrous and that you and your business care about the environment.

And the third element? By shopping at your store, the customer is taking action to protect the environment by preventing at least one single use plastic bag from going into a landfill. It doesn't sound like much, but he or she gets the satisfaction of physically doing something that fulfills their beliefs. You can also reinforce your customers green decisions and increase their participation by offering them additional related actions, such as buying cloth bags to use for future purchases.

Sometimes the best thing to do with a bandwagon is jump on it. You have to walk the talk and actually implement green policies and act in environmentally friendly ways for green marketing to work, but if you do, you've got a powerful selling point with those who are environmentally conscious and want to act to make the world a greener place - a market that's growing exponentially right now.