GREEN MARKETING

An assignment
On

“Green marketing”

Submitted to :
Submitted by :

Dr. Manisha Panwala

Raval Chandrashekhar R

11- Section - B

DEPARTMENT OF BUSINESS & INDUSTRIAL MANAGEMENT

VEER NARMAD SOUTH GUJARAT UNIVERSITY, SURAT
2008-10
 GREEN MARKETING

INDEX

Topic Pag
Sr. No. e
no.
1 INTRODUCTION 1

2 ADOPTION OF GREEN MARKETING 5

3 CURRENT TREND 6

4 COMPANY’S GREEN INITIATIVES 8

5 GREEN MARKETING CASES 14

7 CONCLUSION 15
8 BIBLIOGRAPHY 16
 GREEN MARKETING

 INTRODUCTION

According to the Indian 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. 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.

So, in simple terms Green marketing refers to the process of selling products and/or
services based on their environmental benefits. Such a product or service may be
environmentally friendly in itself or produced and/or packaged in an environmentally
friendly way.

The obvious assumption of green marketing is that potential consumers will view a
product or service's "greenness" as a benefit and base their buying decision accordingly.
The not-so-obvious assumption of green marketing is that consumers will be willing to
pay more for green products than they would for a less-green comparable alternative
product - an assumption that has not been proven conclusively, specially the mild effect
which it had had on consumers has washed away by the present recession (2008-09) only.

Green marketers though argue that it is a way to use the environmental benefits of a
product or service to promote sales. Many consumers will choose products that do not
damage the environment over less environmentally friendly products, even if they cost
more. With green marketing, advertisers focus on environmental benefits to sell products
 GREEN MARKETING

such as biodegradable diapers, energy-efficient light bulbs, and environmentally safe

detergents.

People buy billions of dollars worth of goods and services every year—many which harm
the environment in how they are harvested, made, or used. Environmentalists support
green marketing to encourage people to use environmentally preferable alternatives, and
to offer incentives to manufacturers that develop more environmentally beneficial
products.

THE BIRTH OF GREEN MARKETING

The concept of green marketing has been around at least since the first Earth Day in
1970. But the idea did not catch on until the 1980s, when rising public interest in the
environment led to a demand for more green products and services. Manufacturers
responded to public interest by labeling hundreds of new products "environmentally
friendly"—making claims that products were biodegradable, compostable, energy
efficient, or the like.

The term Green Marketing came into prominence in the late 1980s and early 1990s. The
Indian 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 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 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.
In the years after 2000 a second wave of Green marketing emerged. By now CSR and the
Triple Bottom Line (TBL) were widespread. Such publications as a 2005 United Nations
Report, then in 2006 a book by Al Gore and the UK Stern Report brought scientific-
environmental arguments to a wide public in an easy to understand way.
 GREEN MARKETING

GREEN WASHING

In spite of its growing popularity, the green marketing movement faced serious setbacks
in the late 1980s because many industries made false claims about their products and
services. For instance, the environmental organization Corp Watch , which issues
annually a list of the top ten "green washing" companies, included BP Amoco for
advertising its "Plug in the Sun" program, in which the company installed solar panels in
two hundred gas stations, while continuing to aggressively lobby to drill for oil in the
Arctic National Wildlife Refuge. Green marketing can be a very powerful marketing
strategy though when it's done right. In a similar kind of case Chad’s green marketing
campaign bombed because he made the mistake of packaging his environmentally
friendly product in Styrofoam, emitting CFC’s.

Without environmental labeling standards, consumers could not tell which products and
services were truly beneficial. Consumers ended up paying extra for misrepresented
products. The media came up with the term "green washing" to describe cases where
organizations misrepresented themselves as environmentally responsible.

So, While green marketing was growing greatly as increasing numbers of consumers
were willing to back their environmental consciousnesses with their dollars, it can be
dangerous. The public tends to be skeptical of green claims to begin with and companies
can seriously damage their brands and their sales if a green claim is discovered to be false
or contradicted by a company's other products or practices. Thus, in other words
presenting a product or service as green when it's not is called green washing.

In 1992, the Indian Trade Commission stepped in to prevent further deception. The ITC
created guidelines for the use of environmental marketing claims such as "recyclable,"
"biodegradable," "compost-able," and the like. The ITC and the Indian Environmental
Protection Agency defined "environmentally preferable products" as products and
services that have a lesser or reduced effect on human health and the environment when
compared to other products and services that serve the same purpose.

The label "environmentally preferable" considers how raw materials are acquired,
produced, manufactured, packaged, distributed, reused, operated, maintained, or how the
product or service is disposed.

Today, special labels help the public identify legitimate environmentally preferable
products and services. Several environmental groups evaluate and certify products and
services that meet standards—or their own tougher standards.
 GREEN MARKETING

One popular product that has received certification is shade-grown coffee, an alternative
to coffee beans that are grown on deforested land in the tropics.

THE NEXT BOOST

Examples of environmentally-beneficial products and services:

Paper containing post-consumer wastepaper

Cereals sold without excess packaging

Shade-grown coffee beans

Cleaning supplies that do not harm humans or environment

Wood harvested from sustainable forests

Energy-efficient light-bulbs

Energy-efficient cars

Energy from renewable sources of energy such as windmills and solar

power

IMPORTANCE OF GREEN MARKETING

Human beings have limited resources on the earth, with which they
must attempt to provide for the worlds' unlimited wants. There is
extensive debate as to whether the earth is a resource at man's
disposal. In market societies where there is "freedom of choice", it has
generally been accepted that individuals and organizations have the
right to attempt to have their wants satisfied. As firms face limited
natural resources, they must develop alternative ways of satisfying
these unlimited wants.

Ultimately green marketing looks at how marketing activities utilize

these limited resources, while satisfying consumers wants, both of
individuals and industry, as well as achieving the objectives of
organizations. There are several reasons for increased use of Green
 GREEN MARKETING

Marketing. Some possible reasons are as follows-

 Organizations perceive environmental marketing to be an

opportunity that can be used to achieve its objectives.
 Organizations believe they have a moral obligation to be more
socially responsible.
 Governmental bodies are forcing firms to become more
responsible towards the environment.
 Competitors' environmental activities pressure firms to change
their environmental marketing activities.

 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 MARKETIN MIX

Every company has its own favorite marketing mix. Some have 4 P's and some have 7
P's of marketing mix. The 4 P's of green marketing are that of a conventional marketing
but the challenge before marketers is to use 4 P's in an innovative manner.

Product : The ecological objectives in planning products are to reduce resource

consumption and pollution and to increase conservation of scarce resources (Keller
man, 1978).

Price : Price is a critical and important factor of green marketing mix. Most consumers
will only be prepared to pay additional value if there is a perception of extra product
value. This value may be improved performance, function, design, visual appeal, or
taste. Green marketing should take all these facts into consideration while charging a
 GREEN MARKETING

premium price.

Promotion : There are three types of green advertising: -

* Advertisements that address a relationship between a product/service and the

biophysical environment
* Those that promote a green lifestyle by highlighting a product or service
* Advertisements that present a corporate image of environmental responsibility

Place : The choice of where and when to make a product available will have
significant impact on the customers. Very few customers will go out of their way to buy
green products.

 CURRENT TREND

Country Per capita co2(carbon Ratio of per capita

dioxide ) equivalent emissions wrt Indian
emission in 2009 emission
(tonnes/capita)

USA 23 15.3
Germany 12 8.3
United 11 7.3
Kingdom
Japan 10 6.7
India 1.5 1
Brazil 1.9 1.3
China 3.3 2.2
Global 3.9 2.6

Source: National inventory report

 GREEN MARKETING

CHALLENGES AHEAD

* Green products require renewable and recyclable material, which is costly

* requires a technology, which requires huge investment in R & D
* Water treatment technology, which is too costly
* Majority of the people are not aware of green products and their uses
* Majority of the consumers are not willing to pay a premium for green products

Popularity and effectiveness

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' models in 38
product categories, from washing machines and light bulbs to skyscrapers and homes.
The difference is, however, that green—rightfully so—is on the wane as the primary
sales pitch for products. On the other hand, Roper’s Green Gauge shows that a high
percentage of consumers (42%) 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
 GREEN MARKETING

"Happy Planet" any day, including Earth Day. New reports, however show a growing
trend towards green products.

CONSUMER’S CONFUSION

One challenge green marketers -- old and new -- are likely to face as green products and a
message 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.") Marketers sometimes take advantage of this confusion, and
purposely make false or exaggerated "green" claims. Critics refer to this practice as
"green washing".

According to market researcher Mintel, about 12% of the Indian population can be
identified as True Greens, consumers who seek out and regularly buy so-called green
products. Another 68% 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."

 COMPANY’S GREEN INITIATIVES

• Xerox introduced a "high quality" recycled photocopier paper in

an attempt to satisfy the demands of firms for less environmentally
harmful products.
1) SOCIAL RESPONSIBILITY Many firms are beginning to realize that they
are members of the wider community and therefore must behave in an
environmentally responsible fashion thus resulting in environmental
issues being integrated into the firm's corporate culture. An example of
a firm that does not promote its environmental initiatives is Coca-
Cola which invested large sums of money in various recycling
activities, as well as having modified their packaging to minimize its
 GREEN MARKETING

environmental impact. Another firm who is very environmentally

responsible but does not promote this fact, at least outside the
organization, is Walt Disney World (WDW) with an extensive waste
management program and infrastructure.

2) GOVERNMENTAL PRESSURE Governmental regulations relating to

environmental marketing are designed to protect consumers through
regulations designed to control the amount of hazardous wastes
produced by firms by issuing of various environmental licenses,
thus modifying organizational behavior. In some cases governments
try to "induce" final consumers to become more responsible by taxing
individuals who act in an irresponsible fashion. For example in Australia
there is a higher gas tax associated with leaded petrol.

3) COMPETITIVE PRESSURE Another major force in the environmental

marketing area has been firms' desire to maintain their competitive
position. In many cases firms observe competitors promoting their
environmental behaviors and attempt to emulate this behavior. In some
instances this detrimental environmental behavior. For example, it could
be argued that Xerox's "Revive 100% Recycled paper" was introduced
a few years ago in an attempt to address the introduction of
recycled photocopier paper by other manufacturers. In another example
when one tuna manufacture stopped using driftnets the others followed
suit.

4) COST OR PROFIT ISSUES Disposing of environmentally harmful by-

products, such as polychlorinated biphenyl (PCB) contaminated oil are
becoming increasingly costly and in some cases difficult. In minimizing
wastes firms often develop more effective production processes that
reduces the need for some raw materials thus serving as a double
cost savings. In other cases firms attempt to find end-of-pipe solutions,
 GREEN MARKETING

instead of minimizing waste by trying to find markets or uses for their

waste materials, where one firm's waste becomes another firm's input of
production.

MARUTI: GREENING THE SUPPLY CHAIN

The Company has remained ahead of regulatory requirements in pursuit of environment

protection and energy conservation at its manufacturing facilities, and in development of
products that use fewer natural resources and are environment friendly.

The company credited the 'Just-in-Time' philosophy adopted and internalized by the
employees as the prime reason that helped to excel in this direction.

The company has been promoting 3R since its inception. As a result the company has not
only been able to recycle 100% of treated waste water but also reduced fresh water
consumption. The company has implemented rain water harvesting to recharge the
aquifers. Also, recyclable packing for bought out components is being actively
promoted.

The company has been facilitating implementation of Environment Management System

(EMS) at its suppliers' end. Regular training programs are conducted for all the suppliers
on EMS. Surveys are conducted to assess the vendors who need more guidance. The
systems and the environmental performance of suppliers are audited.

The green co-efficient of this system is much better than the conventional system

HCL's Environment Management And Ecosafe Policy

In building a system to identify, develop and sustain the maintenance of an environment

management system at corporate level we have formulated a program that we proudly
refer as HCL's ecosafe. The aim is to encapsulate knowledge, awareness, and key
developments on all environmental issues faced by today's world and to incorporate these
in HCL's operations assuring our commitment in delivering quality products, solutions
and services

The key objective under HCL ecoSafe is targeted at integrating environmental

management procedures into its business processes thereby protecting the environment,
health, and safety of all its stakeholders. HCL commits to manufacture products that are
environment friendly in all respects and are free from hazardous chemicals.
 GREEN MARKETING

HCL ecoSafe focuses on product lifecycle management to ensure that our products right
from when they are manufactured, bought by customers, recovered at their end-of-life
and recycled after useful life is done in an environmentally responsible manner.

ITC

* ITC has been 'Carbon Positive' three years in a row (sequestering/storing twice the
amount of CO2 than the Company emits).

* 'Water Positive' six years in a row (creating three times more Rainwater Harvesting
potential than ITC's net consumption).

* Close to 100% solid waste recycling.

* All Environment, Health and Safety Management Systems in ITC conform to the best
international standards.

* ITC's businesses generate livelihoods for over 5 million people.

* ITC's globally recognised e-Choupal initiative is the world's largest rural digital
infrastructure benefiting over 4 million farming families.

* ITC's Social and Farm Forestry initiative has greened over 80,000 hectares creating an
estimated 35 million person days of employment among the disadvantaged.

* ITC's Watershed Development Initiative brings precious water to nearly 35,000

hectares of drylands and moisture-stressed areas.

* ITC's Sustainable Community Development initiatives include women empowerment,

supplementary education, integrated animal husbandry programmes.

MORE EXAMPLES

* McDonald's restaurant's napkins, bags are made of recycled paper.

* Coca-Cola pumped syrup directly from tank instead of plastic which saved 68 million
pound/year.
 GREEN MARKETING

* Badarpur Thermal Power station of NTPC in Delhi is devising ways to utilize coal-ash
that has been a major source of air and water pollution.

* Barauni refinery of IOC is taken steps for restricting air and water pollutants.

THE NEW TRENDS REVEALED BY DELOITTE

Shoppers are thinking green, but not always buying that way, according to a new study
released by the Grocery Manufacturers Association (GMA) and Deloitte. The study
found that while 54 percent of shoppers indicate that environmental sustainability in a
factor in their purchasing decisions, they actually bought green products on just 22
percent of their shopping trips. The survey is the basis of the GMA-Deloitte report titled
Finding the Green in Today's Shoppers: Sustainability Trends and New Shopper Insights
and was based on interviews with over 6,400 shoppers.

Now eco packaging is poised to become the next low-hanging fruit of the clean tech
world. Investors and entrepreneurs this week at Europe's most important annual clean
tech conference reported unprecedented interest in reducing the use of raw materials
while finding superior protection for food and other products.

Consumers are increasingly putting plastic shopping bags and non-green wrapping items
on their naughty list, according to Deloitte's 2008 Annual Holiday Survey. Nearly half of
the 13,000 consumers polled said they'd be willing to pay more for green gifts. This was
up from 17 percent last year.

Consumers perceive themselves as being environmentally responsible. Successful green

marketing requires matching a company's brand attributes with its customers' identity as
"green." An article suggested examining green marketing from the perspective of the 4
P's of marketing -- product, price, placement and promotion -- plus a 5th P, "prove it."

Indians are quick to identify polluting companies as "socially irresponsible" and make
their purchasing decisions accordingly, says a new survey. The poll also found that
Indian consumers between the ages of 18-29 are more likely to spend more on organic,
environmentally preferable or fair trade products than other age groups.

The survey, by the research firm Global Market Insite, quizzed more than 15,000 online
consumers in the India and 16 other countries about their socially conscious business
practices. Indians placed the highest value on corporate community involvement; when
 GREEN MARKETING

asked what factor was the most important in determining if a business is socially
responsible, "contributing to the community" (e.g. sponsorship, grants, employee
volunteer programs) came in highest with 47%. On the other hand, all of the other
countries surveyed (India, Canada, Australia, Germany, China, and Japan) selected
environmentally preferable practices (recycling, using biodegradable products) as the top
factor.

"In the high-tech era where employees are expected to work 24/7, it's significant that
Indians rate giving back to the community as their top priority in recognizing socially
responsible companies," said Marjorie Thompson, co-author of Brand Spirit: How Cause
Related Marketing Builds Brands. "It shows that people want to feel connected to each
other and that they are willing to reward businesses who tap into this sense of mutual
support and belonging. Companies will need to start thinking of their community
programs as core to their businesses and brands, and central to how they market
themselves."

Not surprising, the India, along with other countries such as India and China, which have
experienced environmental disasters caused by corporations (e.g. Love Canal, Bhopal,
Exxon Valdez) or have had to deal with major polluting issues (e.g. coal plants,
manufacturing), believe that damaging the environment is associated with acting socially
irresponsible. Other countries, including France (60%), Denmark (52%) and Italy (45%)
selected the use of child labor as the main factor in making them think a corporation is
socially irresponsible.

Juxtaposing Indians' negative opinions on damaging the environment, the GM Poll found
that only 42% of all Indians are willing to spend more for products branded as organic,
environmentally friendly, or fair trade, except for the Y Generation. While only 14% of
18-29 year olds label themselves as socially responsible consumers, half of this age group
(50%) responded that they will spend more on these types of products (organic,
environmentally friendly or fair trade) compared to their older and wealthier counterparts,
with only 37% of 45-64 years olds saying they would spend more on green products.

Thompson advertisements: "Based on the findings, Generation Y is obviously more

environmentally conscious and socially savvy, which is expected given that many are
aware of the issues surrounding globalization and trade and how this can negatively
affect the environment, labor pool and the local communities."

GREEN HOUSE AS REDUCTION MARKET

 GREEN MARKETING

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.

While international trade in greenhouse gas 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.

There are active trading programs in several air pollutants. For greenhouse gases the
largest is the European Union Emission Trading Scheme. In the United States there is a
national market to reduce acid rain and several regional markets in nitrogen oxides.
Markets for other pollutants tend to be smaller and more localized.

 GREEN MARKETING CASES

Philips Light's CFL

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 INDIA EPA's Energy Star
 GREEN MARKETING

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), 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.

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 is still in its infancy and a lot of research is to be done on green
marketing to fully explore its potential .Think of a refrigerator for example. While we
may have had to be convinced in the 1950s to buy a refrigerator, we would have wanted
the great white box to have attractive looks till the 1970s, but in today's uncertain world,
 GREEN MARKETING

we might ask ourselves about the impact of the chlorofluorocarbons (CFCs) that our
refrigerator is emitting and demand a more environmentally friendly refrigerator.

So, if today's successful marketing is about appealing to personal values and delivering
consumer empowerment, then surely the time is right to inject sustainable development
into the marketing mix to help address some of the gritty issues presently faced by our
planet .Green marketing methods may produce highly effective results if used cautiously
and with integrity.

BIBLIOGRAPHY

• http://www.oecd.org/dataoecd/22/16/1934784.pdf
• http://povertyworlddevelopment.suite101.com/article.cfm/climate_change_and_th
e_developing_world
 GREEN MARKETING

• http://www.bcca.org/ief/conf10/conf10_02.pdf
• www.economist.com/displaystory.cfm?story_id=14447171
• http://www.pedz.uni-mannheim.de/daten/edz-ma/ep/07/EST18331.pdf
• http://www.eurekalert.org/pub_releases/2009-08/pu-ccc081909.php
• http://www.ifpri.org/publication/climate-change-impact-agriculture-and-costs-
adaptation