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Designing for Green Environment: Focusing the Green Marketing activities

adopted by Large Scale Manufacturing (LSM) Organizations in the North Central
Province (NCP) in Sri Lanka

Conference Paper · February 2012

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 Proceedings ICME 2012

Designing for Green Environment: Focusing the Green Marketing activities

adopted by Large Scale Manufacturing (LSM) Organizations in the North Central
Province (NCP) in Sri Lanka

MGS Pathmini 1 a, and WMPGR Pushpakumara 2b,

1
Dept. of Accountancy and Finance, Faculty of Management Studies, Rajarata University of Sri Lanka.
Mihintale,Sri Lanka
2
Dept. of Business Management, Faculty of Management Studies, Rajarata University of Sri Lanka.
Mihintale,Sri Lanka
a
mgsp@rjt.ac.lk , bhmnamaratunga@yahoo.com

Key words: Green Marketing, Designing for Environment, Marketing Mix, LSM Organizations.

Abstract
Today’s most of the organizations are becoming more committed to environmental issues, due
to environmental legislation, economic influences and increasing concern about the
environment among the general public. Therefore, environmentally responsible companies are
becoming a more successful because; competitive advantage can be achieved by environment
related activities. As a result, companies need to understand the caring for the environment as
part of their operations. In this direction, this study aims to investigate the extent of the
practice level of the marketing mix elements in an ecological manner of LSM organizations in
NCP and to give recommendations to uplift the level of designing for a green environment. The
level of designing for the environment was measured by using four marketing mix variables.
The population of this study was all LSM organizations in the NCP. The judgmental sampling
methods were used to select organizations for the sample and it was 20 LSM organizations.
Questionnaire method with the interview was used to investigate the companies’ ways and
how they deal with green issues and ecological responsibility. By analyzing the results with the
literature review, the study reveals that environmental responsibility and ecological orientation
need to be based upon the entire marketing mix strategy of a company. According to the facts
given, the level of marketing mix elements; product and price are poorly practiced while place
and promotion shown an average are contribution towards the designing for the environment.
Therefore, this study recommended motivating companies to go green to promote ecologically
sustainable practices with all 4 Ps specially incorporating ecological features into the product
and manufacturing process.

Introduction
Green marketing is in general a much broader concept, one that can be applied to their
manufacturing process. Not surprisingly, socially and environmentally responsible companies in
the world are performing well in the markets with green strategies. Therefore, more companies

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are switching from general corporate philanthropy to supporting social and environmental
causes that directly align with their overall mission. In today’s businesses, enterprises and
organizations are becoming more and more committed to environmental issues due to tougher
environmental legislation, economic and other influences as well as an increasing concern
about the environment among the general public. In a competitive and global setting,
companies need to understand the caring for the environment as part of their operations
(Brorson et al., 2006)1. During the past 30 years, the society’s concern about the environment,
increased focus on ecological awareness, such as warnings of natural resource scarcity and loss
of biodiversity. The issues have changed from local problems to more global questions, due to
an imbalance in the ecological system caused by excessive human consumption and behavior
(Tjärnemo, 2001, pp. 30-31)2. So most of the companies changed their attitudes towards the
environment and considerations for it have gained importance in recent years, thus, carrying
out their business according to environmental principles (Landuwa, 1998)3. 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
integrated environmental issues into all organizational activities. (Polonsky, M. J,2008).4 Many
governments around the world have become so concerned about this issue. But one of the
biggest problems with this issue is that they have been little attempt to academically
examination on environment marketing especially in Sri Lanka. Therefore, this study attempts
to examine the practices of green marketing consideration focusing specially the designing for
green environment by the large scale manufacturing organizations in the NCP in Sri Lanka.

Donald, in 19995 has identified designing for the environment as one of the major strategies of
green marketing. Designing for environment works to minimize the waste by designing and
building positive ecological attributes into the marketing mix elements. Green marketing
involves developing and promoting products and services that satisfy customers’ needs and
wants with quality, high performance, affordable pricing, correct and reasonable promotion
and convenience access without having a detrimental impact on the natural environment.
As (Kotler P. and Keller K.L.,, 2009)6 reveal the deterioration of the natural environment is a
major global concern. In many cities in the world air and water pollution have reached
dangerous levels and there is a greater concern about the depletion of the ozone layer. The
problem has aggravated seriously day by day with the activities of the manufacturing sector. As
a result, there is a growing market for socially responsible and environmentally friendly
products. Accordingly, marketers have increasingly recognized that the many competitive
advantages and business opportunities can be gained from eco- sustainability and green
marketing. Therefore, it is timely important to do a study on this problem in Sri Lanka.

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Green Marketing and Strategies

The beginning of environmentalism can be referred to the 1960s and early 1970s with
increasing concern about the impact of consumption and production patterns on the
environment due to debates about health effects and the impact of economic and population
growth (Cohen, 2001, pp. 21-37).7 According to Grundey D. and Zahariar.m., in 20088 Green
Marketing consists of all activities designed to generate and facilitate any exchanges intended
to satisfy human needs or wants, such that the satisfaction of these needs and wants occurs,
with minimal harmful impact on the natural environment. Green marketing, explains the
relevance and importance of environment in business activities since most of the business
activities damaging the earth’s ecosystem. It is examined; How marketing decisions affect the
ecosystems that sustain our lives? And how marketing mix decisions do influence
environmental outcomes? Therefore, it helps the businesses to aim their activities on 3 major
issues; what it takes? (Material and energy resources), what it makes? (Products derived from
those resources through transformation process), what it waste? (Eco cost, garbage, waste,
pollution and ongoing destruction of natural resources which consequence of taking and
making process). It challenges the marketers to cope with a relentless issues- eco- system
degradation caused by consumption. It explains the marketers to reinvent strategy- “win-win-
win” outcomes. The 1st win – Customer wins (obtain genuine benefits), the 2nd win –
Organization wins (achieve financial and other benefits), the 3rd win – Eco system wins
(functioning to preserve or enhance the environment). The following figure explains the linkage
of marketing with the Eco system.

Figure 1 - Linkage of marketing with the Eco system

Eco system provides resources;

 Water
 Air
Eco system pollution/  Land
Degradation

Marketing

Consumption and Waste

Consumers

(Source; Donald.A.F., 1999, Sustainable marketing)5

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In addition, green marketing offers different benefits to different parties such as;
Environmental benefits to customers, Satisfying customers with protect and enhancing the
environment (waste reduction, reduction of air/water pollutions and improving energy
efficiency ...Etc), build brand loyalty among customers, charge premium price for such eco
responsible products, exploit opportunities and enhance the overall marketability of products,
Open up rooms for innovations and organizations that adopt green marketing are perceived as
more socially responsible…etc. Donald A.F.,(1999)5, explained green strategies under 2 basic
levels (a) Integrated waste management and (b) Designing for a green environment. This study
is emphasis the second strategic level of green marketing, namely designing for a green
environment.

What is Designing for Green Environment?

It is described the designing process on building sell of positive ecological attributes into
products. The marketing mix strategy involves interrelated marketing mix decisions that
collectively influence resources use and waste outcomes as consumption needs are met.
According to American Marketing Association in 2008 cited in Polonsky M.J., 2008 4., a model of
a green marketing-mix should, of course, contain all 4P’s with 4Cs:

Product: Ecological products which not only must not contaminate the environment, but should
protect it and even liquidate existing environmental damages (Customer solutions: These
solutions go beyond selling physical products and present solutions to customer's problems.
They imply knowing customers and their needs well and offering products that satisfy customer
needs and take into account social and environmental aspects.

Price: Prices for such products may be a little higher than conventional alternatives. But target
groups willing to pay extra for green products (Customer Cost: Cost does not only include the
financial price a buyer has to pay for a product, it also considers the psychological, social and
environmental costs of obtaining, using and disposing of a product)

Place: A distribution logistics is of crucial importance; main focus is on ecological packaging.

Marketing local and seasonal products, e.g. vegetables from regional farms is easier to be
marketed “green” than products imported (Convenience: Means those customers want to use
products that meet their needs and that are easy and convenient to access and use)

Promotion: A communication with the market should put stress on environmental aspects, for
example, that the company possesses ISO 14000 certified. This may be publicized to improve a
firm’s image. Furthermore, the fact that a company spends expenditures on environmental
protection should be advertised. Third, sponsoring the natural environment is also very
important. And last but not least, ecological products will probably require special sales
promotions (Communication: “Green” communication goes beyond promotion, which is a form
of persuasion and a one-way communication from seller to buyer. Communication is a process
of interactive dialogue within which it is essential to build trust and credibility)
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Objectives of the Study

In this direction, this study aims to investigate the extent of the practice level of the marketing
mix elements of LSM organizations in NCP in an ecological manner and to give
recommendations to uplift the level of designing for green environment by focusing the green
marketing activities.

Figure 2- Conceptual Model

Designing For
Green Product decisions
Green
 Pricing decisions
Environment
 Distribution decisions
Green Pricing decisions
 Communication decisions
 Pricing decisions  HIGH
 Distribution decisions  AVERAGE
 Communication
Green Distribution decisions
decisions  LOW
 Pricing decisions
 Distribution decisions
 Communication decisions
Green
 Pricing decisions
 Distribution
Working Definitions decisions
 Communication decisions
Green marketing
“Polonskey (1996)9 defined, ecological marketing consists of all activities designed to generate
and facilitate any exchange intended to satisfy human needs and wants with minimal
detrimental impact on the natural environment”

Designing for the environment

“Designing process on building positive ecological attributes into products and other marketing
mix variables that collectively influences, resources use and waste outcomes as consumption
needs are met”

Green product
“Green product should not endanger the environment at any stage of its life, including
manufacturing, use or disposal. Cause unnecessary waste, either as a result of excessive
packaging or a short useful life.” (Kotler, Roberto and Lee, 2002)10.

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Green prices
Price of a social marketing product is the cost that target market associate with adopting new
behavior. This may be monetary or non monetary in nature.

Green Distribution
“Development of strategies that make it as convenient and pleasant as possible for the target
audience to perform the behavior, acquire any tangible object and receive any services with
environmentally friendly”.

Green marketing promotion

“Communication of the products to the target market with real information focusing the
marketing cost and their impact to the natural environment”.

The LSM organizations

Selected based on the definition given by the Department of Senses and Statistics
“Establishments with more than 25 employees engaged”.

Variable Indicator
Level of Green Consideration about green practices at Product planning and designing.
Product Pollution prevention with input level
Consideration about pollution prevention in production process
Consideration about pollution prevention at output level.
Efficient Usage of energy and other resources.

Level of Green Value offered for Money

Pricing Consideration of social and environmental cost.
Reduction of Manufacturing and Marketing cost.
Level of Green Waste at performing logistics
Distribution Designing and planning Ecological sales outlets
(place) Awareness and knowledge of channel members about the green concept
Marketing local and seasonal products
Ecological packaging
Level of Green Consumers’ knowledge and awareness towards the green concept
Promotion Advertising and Sales promotion with ecological aspects.
Table 1 - Variables and Indicators

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Methodology

The study approach was deductive and it was conducted in a contrived setting in nature and
also a cross sectional one. In this study the level of designing for the environment is described
as the dependent variable and it was measured by using four marketing mix variables. The
population of this study was all LSM organizations in the NCP and that is 45 according to the
Dept. of Senses and Statistics in year 2007 (Including 21 organizations from Anuradhapura
District and 24 organizations from Polonnaruwa District). Among 15 manufacturing categories
defined by the Senses and Statistic Department in Sri Lanka - year 2007 for the NCP, researcher
used only 5 manufacturing categories as explained in the table 2 below. The judgmental
sampling methods were used to select the sample organizations. Hence, the sample size was
20 LSM organizations, including same percentage from each district in the NCP. The LSM
organizations were selected based on the definitions given by the Department of Senses and
Statistics – Sri Lanka (“Establishments with more than 25 employees engaged”) and Industrial
Development Board (Invested Capital more than Rs.04 Million). Both primary and secondary
data were collected for this study. Primary data were collected by interviewing respondents
using structured questionnaire which consists of 2 parts. The first part included background
information and the second part was consisted the information on the green marketing
approach of the organizations towards the designing for the environment. The 5 year period of
time was considered at data collection. Questionnaire was directed to marketing managers,
production manager or any other relevant officer/s in these organizations. Most of the
questions in the questionnaire were prepared using Likert scale, taking point values: 1 (poor), 3
(average) and 5 (good). Descriptive statistical techniques, especially mean, standard deviation
and percentage values were used to describe the data. The 3 range continuum based on mean
value was used to determine the degree of the different variables. Range: (1.00-2.33; Low, 2.34
– 3.66; Average, 3.66-5.00; High)

Manufacturing category No of org. Anuradhapura Polonnaruwa

Food & Beverage 05 03 02
Chemical, Rubber and Plastic products 05 02 03
Machinery & Equipments 04 02 02
Stone, Clay, Glass and Concrete Products 03 02 01
Furniture , Wood Works 03 01 02
Total Sample 20 10 10
Table 2 –Sample Selection

(Source: Ministry of Industrial Development NCP, 2007, Sri Lanka)11

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Results and Discussions

Sample profile

Though this study aimed to collect data from 20 LSM organizations in NCP, only 17
organizations were responded. That is 85 % from the total sample and 38% from the total
population (90% from Anuradhapura District while 80% from Polonnaruwa district). At the
same time 17 organizations were consisted from all 5 manufacturing categories including
29.5%, 17.6%, 29.45, 11.8%, 11.8% from foods/beverage, constructions, /rubber, machinery
and furniture respectively.

District Sample Responded %

Anuradhapura 10 09 90
Polonnaruwa 10 08 80
Total no of organizations 20 17 85
Table 3- Response Rate
(Source: sample survey, 2009)

Practice level of green product

The level of green product practice was calculated by using 04 determinants such as Product
planning, production process, level of output, usage of energy. Mean values calculated for
these variables are described in the following table 4. According to the values indicated, the
level of green product is not in a favorable position (poor). Anyhow, production planning is
better than other variables. These data further shows that majority of organizations (76%) are
having low degree of practice while around 6% have shown high degree.

Determinants Attribute Mean S.D. Mean S.D.

Product planning 2.28 0.77
Production process 1.79 0.62 1.71 0.51
Level of output 1.52 0.42
Usage of energy 1.66 0.80

Table -4 (a) statistic relating to level of green product

(Survey Data, 2009)

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Degree No. of organizations %

Low 13 76.5
Average 03 17.6
High 01 05.9
Total 17 100.0

Table-4(b)-Degree of green product

(Survey Data, 2009)
Practice level of green pricing

The level of green pricing was measured by using 3 determinants; value offering for the money,
reduction of manufacturing cost, and reduction of marketing cost. In accordance with the table
5, findings indicate that the mean value of the level of green pricing is 1.76 which falls into the
category of poor. Accordingly, 6% of respondents were falling to the high degree while
majority 71% falling to low and the rest (23%) falls to the degree of moderate. The data shows
that the level of green price is not in a favorable position

Determinants Attribute Mean Mean S .D . S. D.

Value offering for the money 1.96 1.76 1.00 0.49

Reduction of manufacturing cost 1.56 0.66

Reduction of marketing cost 2.31 0.65

Table 5 (a) - Statistics relating to the green price

(Survey Data, 2009)

Degree No. of org. %

Low 12 70.6
Moderate 04 23.5
High 01 05.9
Total 17 100.0
Table 5 (b) – Degree of green pricing

(Survey Data, 2009)

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Practice level of green distribution

This was measured by using 3 determinants; knowledge /awareness of channel members,

ecological sales outlets and waste at performing logistics. According to the tables 6, practice of
this variable is moderate. Majority of respondents (53%) were mediocre with green
distribution. These data reveal that ecological sales outlets and waste at performing logistics
were practiced in a good manner. It is a better trend towards the implementation of green
marketing successfully in due course. Anyhow, improving knowledge of sales peoples on green
marketing is not practiced in a favorable level.

Determinants Attribute Mean S.D. Mean S.D.

Knowledge/awareness of 2.20 1.17

channel members 2.59 0.72
Performing logistics 2.53 0.97
Ecological sales outlets 3.60 1.22

Table 6 (a)- Statistics relating to green distribution

(Survey Data, 2009)

Degree No of organizations %

Low 5 29.41
Moderate 9 52.90
High 3 17.64
Total 17 100.0
Table6(b)-Degree of green distribution
(Survey Data, 2009)

Practice level of green promotion

This was measured using 2 criteria; consumers’ knowledge/ awareness about green concept
and marketing promotion was done considering the green marketing concept. Statistical
analysis stated in table 7 reveals the level of green promotion as moderate. Accordingly,
majority of LSM organizations are moderate (41%) in regards to the green communication.
Hence, these data shows that the level of green promotion is in a moderate position. Anyhow,
both variables are practiced simultaneously towards the improvement of green promotion .

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Determinants Attribute Mean S.D. Mean S.D.

Consumer/knowledge/awaren 2.50 1.52
ess on green concept
Green advertising/promotion 2.45 0.63 2.48 0.97

Table 7(a) - Statistics relating to green promotion

(Survey Data, 2009)

Degree No. of organizations %

Low 06 35.3
Moderate 07 41.2
High 04 23.5
Total 17 100.
Table 7(b) – degree of green promotion
(Survey Data, 2009)

The level of practicing the designing for green environment

This was measured using four determinants as stated in the conceptual model, namely; green
product, green pricing, green distribution, and green promotion. According to the information
reveals by the table the designing for environmental practices by the LSM organizations in NCP
is poor.

Variables Attribute Mean Overall Mean

Level of green product 1.71
Level of green price 1.76 2.28
Level of green distribution 2.59
Level of green marketing promotion 2.48
Table 8- Descriptive statistics relating to Designing for the Environment
(Survey Data, 2009)

Conclusion and Recommendations

According to the facts given, the level of marketing mix variables are averagely practices
excluding product and price, by LSM organizations in the area. Hence, variables place and
marketing promotion are contributed averagely to enhance the designing for environment
while other two variables product and price were not contributed sufficiently towards the
enhancement of green marketing of LSM organizations in the NCP. Therefore the study
recommended making priority attention to introduce green attributes to product and price
elements in the marketing mix rather than place and promotion elements by manufacturer in

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the NCP in Sri Lanka. At this juncture it is required to give importance attention towards;
production process, improving energy efficiency and level of output including packaging and
labeling which are come under green product. Further, value offering for money and reduction
of manufacturing cost to be incorporated to the element of green pricing by these
manufacturers in the NCP in Sri Lanka. Therefore, it cannot be considered that there is a
sufficient level of strategies adopted for the preparation of needs of the environment, focusing
the green marketing by the LSM organizations in the area

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