GREEN MARKETING

A PROJECT ON MARKETING AUDIT

GROUP MEMBERS: SNEHA MASELKAR 2010210 RISHIKANT ANCHAN 2010184 RAHUL KENKARE 2010206 LAXMI KANWAR 2010205 ISHA PASE 2010222 SONALI SURI 2010171 ANUJ MUTTHA 2010216 AFRAN HUDA 2010197 MANISH JARANI 2010202

Green Marketing
Introduction
According to the American Marketing Association, 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.[1] Other similar terms used are Environmental Marketing and Ecological Marketing. Green, environmental and eco-marketing are part of the new marketing approaches which do not just refocus, adjust or enhance existing marketing thinking and practice, but seek to challenge those approaches and provide a substantially different perspective. In more detail green, environmental and eco-marketing belong to the group of approaches which seek to address the lack of fit between marketing as it is currently practiced and the ecological and social realities of the wider marketing environment. 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. This Commission is expected to do an overall review of this guidance, and the legal standards it contains, in 2011.

Definition of Green Marketing

Green marketing definitions can be a little confusing, since green marketing can refer to anything from greening product development to the actual advertising campaign itself. Going by alternative names such as sustainable marketing, environmental marketing, green advertising, eco marketing, organic marketing, all of which point to similar concepts though perhaps in a more specific fashion, green marketing is essentially a way to brand your marketing message in order to capture more of the market by appealing to peoples desire to choose products and services that are better for the environment.

There are many environmental issues impacted by the production of goods and rendering of services, and therefore there are also many ways a company can market their eco-friendly offerings. Green marketing can appeal to a wide variety of these issues: an item can save water, reduce greenhouse gas emissions, cut toxic pollution, clean indoor air, and/or be easily recyclable. When put side by side with the competition, the more environmental marketing claims your product or service can make, the more likely it is the consumer will select it, provided the price point is too much higher than the alternative.

History
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 socalled "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 consensusby consumers, marketers, activists, regulators, and influential peoplehas 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.

What Makes Marketing Green?

But you cant really market your business or your product as green without managing how your company functions with respect to the environment. Green marketing can take many forms. For instance, you may market eco-friendly aspects such as:

Operational sustainability: Service companies and manufacturers can improve operational sustainability by reducing everyday energy and water consumption, minimizing pollution, using greener materials and processes, and properly managing waste. Green products: Companies producing products can do many things to improve the green factor of their offerings, including choosing sustainable materials, designing products to save energy and water, and making products that are less toxic and more natural than competitors goods. Greener products will also be

packaged in an eco-friendly manner and will be made to be easily recycled or composted. Sustainable marketing: Youll also want to ensure that the actual marketing systems you use are green, which is really distinct from your operational sustainability which focuses on manufacturing and production. For instance, when printing marketing materials, use 100% post-consumer recycled paper made without chlorine (called processed chlorine free) and printed using plant-based dyes (like soy inks). You could also investigate tools like green web hosting, carbon offsets for any marketing emissions you may cause, recycling any unused materials from billboards and signage, ecological packaging, and so on. Environmental causes: Any organization can choose to promote environmental causes. Nonprofits and NGOs will engage in green marketing to get the word out about their activities, but for-profits can also suppose environmental causes by making donations and advertising for these environmental do-gooders as part of a green marketing campaign.

Importance of 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

Targeting Green Consumers

Knowing your audience is certainly a necessity if you want to have an effective environmental marketing campaign. In general, there will be at least three levels of green consumers in any industry. Deep green consumers are serious about their choices and will be looking for hard proof of the eco-friendliness of your claims. This group requires verifiable proof that youre providing products and services that will truly benefit the environment. The second group includes people genuinely interested in helping the planet, but not as current on the biggest environmental issues. This group may also be less willing to pay a premium for your green offerings. The third group includes people who are either apathetic or antagonistic toward green marketing efforts. Regardless of your target market, an eco marketing campaign should have several important factors in order to ensure long-term sustainability in the green space: Your green claims should be genuine and verifiable. Above all, be transparent and explicit about any environmental claims you make. Informed consumers are loyal consumers, so educate your consumers about the benefits of your product or service for the environment. Make it possible for your customers to give back to the environment by choosing your service or product.

How to Appeal to Green Consumers

Thankfully, organizations such as the Federal Trade Commission (FTC) regulate some of the more popular green marketing claims in order to provide some way for consumers to compare apples to apples when considering one product against another. The FTC exists to prevent greenwashing and will ensure that claims of environmental benefits are not overstated or misrepresented. In addition to the FTC regulations, there are numerous third-party organizations and government bodies that serve to test and structure

green marketing claims, including such things as the US National Organic Program, the Canadian EcoLogo certification program, and the certified Vegan standard.

5 Rules of Green Marketing

Protect your company from these common pitfalls and start taking advantage of new opportunities by heeding my Rules of Green Marketing: 1. Know your customer: If you want to sell a greener product to consumers, you first need to make sure that the consumer is aware of and concerned about the issues that your product attempts to address. (Whirlpool learned the hard way that consumers wouldnt pay a premium for a CFC-free refrigerator because consumers didnt know what CFCs were!). 2. Empower consumers: Make sure that consumers feel, by themselves or in concert with all the other users of your product, that they can make a difference. This is called empowerment and its the main reason why consumers buy greener products. 3. Be transparent. Consumers must believe in the legitimacy of your product and the specific claims you are making. Caution: Theres a lot of skepticism out there that is fueled by the raft of spurious claims made in the go-go era of green marketing that occurred during the late 80s early90s one brand of household cleaner claimed to have been environmentally friendly since 1884! 4. Reassure the buyer. Consumers need to believe that your product performs the job its supposed to do they won't forego product quality in the name of the environment. (Besides, products that dont work will likely wind up in the trash bin, and thats not very kind to the environment.) 5. Consider your pricing. If you're charging a premium for your product and many environmentally preferable products cost more due to economies of scale and use of higher-quality ingredients make sure that consumers can afford the premium and feel its worth it. Many consumers, of course, cannot afford premiums for any type of product these days, much less greener ones, so keep this in mind as you develop your target audience and product specifications.

The Green Marketing Mix

A model of a green marketing-mix should, of course, contain all 4Ps:

Product: A producer should offer ecological products which not only must not contaminate the environment but should protect it and even liquidate existing environmental damages. Price: Prices for such products may be a little higher than conventional alternatives. But target groups like for example LOHAS are willing to pay extra for green products. 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 more easy to be market green than products imported. Promotion: A communication with the market should put stress on environmental aspects, for example that the company possesses a CP certificate or is ISO 14000 certified. This may be publicized to improve a firms 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.

In their book of Sustainability Marketing Belz and Peattie go one step further in terms of not just marketing but operating green. They transformed the 4 P's into the 4 C's. The four C's customer solutions, customer cost, communication and convenience are taking the point of view of the customer (not the producer).

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 and services that satisfy customer needs and that take into account social as well as environmental aspects. Customer Cost:Customer Cost does not only include the financial price a buyer has to pay for a product or a service, it also considers the psychological, social and environmental costs of obtaining, using and disposing of a product. 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.

Convenience: Means that customers want to use products and services that meet their needs and that are easy and convenient to access and use.

The level of greening-strategic, quasi-strategic, or tactical dictates exactly what activities should be under-taken by a company. Strategic greening in one area may or may not be leveraged effectively in others. A firm could make substantial changes in production processes but opt not to leverage them by positioning itself as an environmental leader. So although strategic greening is not necessarily strategically integrated into all marketing activities, it is nevertheless strategic in the product area. The marketing strategies for green marketing include: 1)Marketing Audit (including internal and external situation analysis) 2) Develop a marketing plan outlining strategies with regard to 4 P's 3) Implement marketing strategies 4) Plan results evaluation 5) Challenges Ahead 6) Green products require renewable and recyclable material, which is costly 7) Requires a technology, which requires huge investment in R & D) Water treatment technology, which is too costly 8) Majority of the people are not aware of green products and their uses 9) Majority of the consumers are not willing to pay a premium for green products.

Green marketing activities

Great Examples of Green Marketing Campaigns

To give you a sense for some good green marketing campaigns, here are three exceptional examples of how eco-friendly messages can draw customers and profitability to your company:

Method: With a whole line of cleaning and personal care products, Methods straightforward yet clearly green message has been hugely successful in gaining ground in these mainstream markets. US Green Building Council: This organization which invented the Leadership in Energy and Environmental Design building program for energy-efficient construction and renovations is now the leading standard for green buildings. Theyve effectively cornered the market as a green standard against which all buildings are now measured. Toyota Prius: Their brilliant marketing campaign has brought them great acclaim and a huge boost in sales theyre currently the leader in gas-electric hybrid vehicles. That said, their recent highway florascape ad campaign to celebrate their 2010 model which will require daytime watering during drought season in California while creative and beautiful is perhaps less ecofriendly than their vehicles.

Regardless of your companys offerings, there are ways you can use green marketing to increase your profitability and enjoy greater business success if youre willing to truly address environmental issues.

Green marketing cases Worldwide

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. 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),Flex Car (Washington State), and Hour Car (Twin Cities). 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.

Conclusion
Green marketing should not neglect the economic aspect of marketing. Marketers need to understand the implications of green marketing.

If you think customers are not concerned about environmental issues or will not pay a premium for products that are more eco-responsible, think again. You must find an opportunity to enhance you product's performance and strengthen your customer's loyalty and command a higher price.

Green marketing is still in its infancy and a lot of research is to be done on green marketing to fully explore its potential.

Bibliography
Chopra, S. Lakshmi (2007), "Turning Over a New Leaf", Indian Management, Vol-64, April-2007 Ottman, J.A. et al, "Avoiding Green Marketing Myopia", Environment, Vol-48, June-2006 www.greenmarketing.com www.greenmarketing.net/stratergic.html www.epa.qld.gov.au/sustainable_ industries www.wmin.ac.uk/marketing research/marketing/greenmix.html