Green Marketing: Opportunities &

Challenges
Introduction
Yes, green marketing is a golden goose. As per Mr. J. Polonsky, green marketing can be defined
as, "All activities designed to generate and facilitate any exchange intended to satisfy human
needs or wants such that satisfying of these needs and wants occur with minimal detrimental
input on the national environment."

Green marketing involves developing and promoting products and services that satisfy
customer's want and need for Quality, Performance, Affordable Pricing and Convenience
without having a detrimental input on the environment.

Evolution of Green Marketing

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.

Why Green Marketing?

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.

Benefits of Green Marketing

Companies that develop new and improved products and services with environment inputs in
mind give themselves access to new markets, increase their profit sustainability, and enjoy a
competitive advantage over the companies which are not concerned for the environment.
Adoption of Green Marketing
There are basically five reasons for which a marketer should go for the adoption of green
marketing. They are -
Opportunities or competitive advantage
Corporate social responsibilities (CSR)
Government pressure
Competitive pressure
Cost or profit issues
Green Marketing Mix

Green marketing
From Wikipedia, the free encyclopedia

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

products that are presumed to be environmentally safe.[1] 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.[1]
Other similar terms used are Environmental Marketing and Ecological Marketing.

The legal implications of marketing claims call for caution. Misleading or overstated claims can
lead to regulatory or civil challenges. In the USA, the Federal Trade Commission provides some
guidance on environmental marketing claims.

History

The term Green Marketing came into prominence in the late 1980s and early 1990s.[3] The
American Marketing Association (AMA) held the first workshop on "Ecological Marketing" in
1975.[4] The proceedings of this workshop resulted in one of the first books on green marketing
entitled "Ecological Marketing".[5]

The first wave of Green Marketing occurred in the 1980s. Corporate Social Responsibility (CSR)
Reports started with the ice cream seller Ben & Jerry's where the financial report was
supplemented by a greater view on the company's environmental impact. In 1987 a document
prepared by the World Commission on Environment and Development defined sustainable
development as meeting “the needs of the present without compromising the ability of future
generations to meet their own need”, this became known as the Brundtland Report and was
another step towards widespread thinking on sustainability in everyday activity. Two tangible
milestones for wave 1 of green marketing came in the form of published books, both of which
were called Green Marketing. They were by Ken Peattie (1992) in the United Kingdom and by
Jacquelyn Ottman (1993) in the United States of America.[citation needed]

According to Jacquelyn Ottman, (author of Green Marketing: Opportunity for Innovation) from
an organizational standpoint, environmental considerations should be integrated into all aspects
of marketing — new product development and communications and all points in between.[6] 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.[citation needed]

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.[7] 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.[1] 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.[citation needed] 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.[citation needed]

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[8][9].

[edit] Greenhouse gas reduction market

The emerging greenhouse gas reduction market can potentially catalyze projects with important
local environmental, economic, and quality-of-life benefits. The Kyoto Protocol’s Clean
Development Mechanism (CDM), for example, enables trading between industrial and
developing nations, providing a framework that can result in capital flows to environmentally
beneficial development activities. Although the United States is not participating in the Kyoto
Protocol, several US programs enable similar transactions on a voluntary and regulatory basis.[1]

While international trade in greenhouse gas[10] reductions holds substantial promise as a source of
new funding for sustainable development, this market can be largely inaccessible to many
smaller-scale projects, remote communities, and least developed localities. To facilitate
participation and broaden the benefits, several barriers must be overcome, including: a lack of
market awareness among stakeholders and prospective participants; specialized, somewhat
complicated participation rules; and the need for simplified participation mechanisms for small
projects, without which transaction costs can overwhelm the financial benefits of participation. If
the barriers are adequately addressed, greenhouse gas trading can play an important role
supporting activities that benefit people’s lives and the environment.[1]

[edit] Popularity and effectiveness

[edit] 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'[11] 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%)[12] 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.[13]

[edit] 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.")[13] Marketers sometimes take advantage of this confusion, and purposely make
false or exaggerated "green" claims. Critics refer to this practice as "green washing".[citation needed]

[edit] 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%[13][14] 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."[13]
[edit] Green marketing cases
[edit] Philips Light's "Marathon"

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.[15] The product had difficulty
climbing out of its deep green niche.[15] 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.[16] 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.[16]

[edit] 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.[citation needed] 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)[17], Flex Car (Washington
State),[18] and Hour Car (Twin Cities).[19]

[edit] 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.[20] 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.

[edit] 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.
The Future
of Green Marketing
Clearly, there are many lessons to be learned to avoid green marketing myopia
(see the box on this page)—the short version of all this is that effective green
marketing requires applying good marketing principles to make green products
desirable for consumers. The question that remains, however, is, what is green
marketing’s future? Historically, green marketing has been a misunderstood concept.
Business scholars have viewed it as a “fringe” topic, given that environmentalism’s
acceptance of limits and conservation does not mesh well with marketing’s
traditional axioms of “give customers what they want” and “sell as much as you
can.” In practice, green marketing myopia has led to ineffective products and
consumer reluctance. Sustainability, however, is destined to dominate twenty-first
century commerce. Rising energy prices growing pollution and resource consumption

in Asia, and political pressures to address climate change are driving innovation
toward healthier, more-efficient, high-performance products. In short, all
marketing will incorporate elements of green marketing.
As the authors of Natural Capitalism argue, a more sustainable business
model requires “product dematerialization”— that is, commerce will shift from
the “sale of goods” to the “sale of services” (for example, providing illumination
rather than selling light bulbs). 79 This model is illustrated, if unintentionally, by
arguably the twenty-first century’s hottest product—Apple’s iPod. The iPod gives
consumers the convenience to download, store, and play tens of thousands of
songs without the environmental impact of manufacturing and distributing CDs,
plastic jewel cases, and packaging. Innovations that transform material
goods into efficient streams of services could proliferate if consumers see
them as desirable. To encourage energy and water efficiency, Electrolux piloted
a “pay-per-wash” service in Sweden in 1999 where consumers were given
new efficient washing machines for a small home installation fee and then were
charged 10 Swedish kronor (about $1) per use. The machines were connected
via the Internet to a central database to monitor use, and Electrolux maintained
ownership and servicing of the washers. When the machines had served their duty,
Electrolux took them back for remanufacturing.
Pay-per-wash failed, however, because consumers were not convinced of
its benefits over traditional ownership of washing machines.80 Had Electrolux better
marketed pay-per-wash’s convenience (for example, virtually no upfront costs
for obtaining a top-of-the-line washer, free servicing, and easy trade-ins for
upgrades) or bundled pay-per-wash with more desirable features, consumers might
have accepted the green service. To avoid green marketing myopia, the future success
of product dematerialization and more sustainable services
will depend on credibly communicating and delivering
consumer-desired value in the marketplace. Only
then will product dematerialization steer business onto
a more sustainable path.