Green Marketing

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    1. TITLE-Adopting Green Marketing Strategy and its relation to Production Cost in Industries

Marketing can be defined as a business philosophy or management techniques aimed towards providing better service to a customer, organisation or a society. Marketing field has more scope for development as compared to any other fields of management like sales, advertising etc. According to the Chartered Institute of Marketing, ?Marketing is the management process for identifying, anticipating and satisfying customer requirement profitably?. On the other hand, management consultants like Peter Drucker would like to believe that ?Marketing is the whole business seen from its final result that is from the customer?s point of view.? Customer is the main focus of this field.
Green Marketing is defined as ?A holistic and responsible management process that identifies, anticipates, satisfies and fulfils stakeholder requirements, for a reasonable reward, that does not adversely affect human or natural environment wellbeing. Modifying the previous definition, Peattie went ahead to redefine green marketing in 1995 as ?the holistic management process responsible for satisfying the requirements of customer and society, in a profitable and sustainable way?.
Green Marketing aims to address the environmental issues related with marketing. Going green not only makes a firm ?good? but also pays rich dividends. It is the job of the stakeholders and the institution to enforce green marketing.?
Lai and Wen, in 2006, found that green marketing and process innovations have a positive impact on corporate competitive advantage.
We will now discuss eco labelleling as a tool for green marketing and to what extent it impacts green marketing.
It establishes a means for customers to make a choice which has less environmental consequences and thus bring about a change in the the process of manufacturing of these products. The problem associated is to advertise the environmental qualities of products and make the people aware by spreading information regarding via eco labelling schemes. A body of research has already been set up to study the use and effectiveness of ecolabels.
Green Marketing is seen world over as an important ingredient for sustainable development and an advanced model for manufacturing enterprises. This concept takes into account principles of environmental protection and conservation in the production and service sector by minimising waste and pollution to the environment, saving energy and other resources while establishing a production economy. There are two types of measures responsible for green sustainable development: a) conservation of resources such as energy, natural gas, oil, fossil fuels, water, electricity etc. b)pollution and environmental emissions. An improvement in these two aspects enhances ?entire production and distribution process, including product design, process planning, material supply, production planning, manufacturing, distribution and post scale technical support.? With alarming rise in global warming, there will be a subsequent increase in awareness created amongst society and new stricter laws enforced by the government in order to encourage GREEN PRODUCTION and relatively higher taxes imposed to improve the situation. For example, Department of Environment, Food and Rural Affairs discusses about industrial manufacturing and pollution issues associated with it. Also it informs about plans of government in increasing taxes related to such issues as land filling, air and water pollution.

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-To study in detail about history of green marketing and the factors that lead to less attention received from the industrial aspect towards green production.
-Whether or not to view adapting green marketing as a competitive edge in future or to be influenced by its past experiences towards low market share of such practices.
-To discuss in what way green marketing , which is a necessary tool, should be adapted in order to mould with the rising changes in the production industry which may increase manufacturing cost and in return lower the profitability of the business. These factors influence? corporate? competitive advantage .?
-The major issue with green marketing is spreading awareness among customers about green products for example by using ecolabels. Once the customers are well informed , they will keep in mind green qualities during their purchasing decisions. This will in turn lead companies to focus on green manufacturing and operation to build strong green environmental friendly brands.


To satisfy our objectives, the study has developed some research questions-
1) Is the company aware of its responsibilities towards environment?
2) Will adapting green marketing strategy save money for the company over a period of time and in what ways?
3) What are the benefits obtained by the company?s brand image by adopting green marketing?
4) What strategy has the company prepared for the future, if new stricter laws are implemented by the government to be environmental friendly?
The concept of green marketing first came into being in the 1970?s, but it wasn?t until 1990?s that this topic was discussed academically. It was understood, that more research needs to be done on consumer needs and promotion of the ?green products?.
Various surveys were conducted which showed that 93% adults consider a product?s environmental impact while purchasing a product, 75 % of the population used environmental criteria regularly in some purchase decision ,42% of UK consumers chose products on the basis of their environmental performance and 27% of British adults were ready to pay 25% extra for environmental friendly products. Such statistics proved that green marketing had a huge scope of development in the future.
Generally, younger generation, people who are educated and the high income group indulge in green consumer behaviour. Perceived consumer effectiveness was seen as a major determinant in consumers getting involved in green marketing. People, who believed that their efforts will make a difference to the environmental situation, supported this idea to a greater extent. Individuals discontent with current environmental problems like changing weather conditions due to global warming were more likely to go for greener products.
The actual sales of green products didn?t match up the consumer surveys and were much smaller than what was expected. Recent data on actual sales are available, though there has been little change in the market for such products.
Governmental and Non-Governmental Organisations, trade associations, engineering and policy researchers are trying to sort out the information problem by using correct environmental terms and emblems for various products. These terms and emblems should be standardised and should clearly inform the customer about the environmental quality of the product.
It was analysed that customer response should be understood by taking into account customer needs and demands. This area received very little attention from the academia until psychologists and sociologists digged into the fact why there was a difference in the survey results and the actual sales of green products.
Ajzen?s ?Theory of Planned Behaviour? tried to explain the reported difference in behaviour between the survey attitudes and the actual buying behaviour. According to his theory,? intentions towards an act are determined by attitudes, subjective norms and perceived control?. Intentions result in behaviour of consumers, and many factors control an individual?s intent and thereby leading to unpredictable actual buying behaviour. Factors such as the cost of the product, the product associability with earlier consumer attitude and behaviour, availability of alternative products and trust of consumer on the environmental labels and emblems determines the actual buying.

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Ecolabels can be either voluntary or mandatory. For example, EU has come up with mandatory energy labels from A to F where A refers to least energy consumption and F to maximum energy usage. Also various voluntary labels, classified based on ISO standards, are available which can be categorised into three major classes namely TYPE I,TYPE II and TYPE III.TYPE I basically belongs to the category of ecolabels and is a well researched category. TYPE II is self claimed environmental labels while TYPE III is quantified environmental data provided in a standardised way.
The major issues with these environmental labels and emblems is that consumers firstly need to understand the meanings of the various standard labels in order to make a judgement and also have trust on the label specifications.
Also another major concern is that these labels will influence the buying behaviour of consumers only if they are interested in environmental friendly products. Thus, although labels may satisfy all required criteria it may not directly influence the green purchasing decisions.
We have looked into various statistics to understand whether green marketing is a success or failure. Improvements have been seen in specific product segments as a result of use of ecolabels. For example, the Food retail Coop Sweden, in 2004, declared that due to the consumers involving more and more in ecological food products there was a downfall in the use of pesticides by 14,000 kg and artificial fertilizers by 1,000,000 kg. In Sweden, consumers going for alternative detergents that had ecolabels have lead to a 15% decrease in chemical products and thus use of more biodegradable surfactants.
Conclusion can be drawn that use of ecolabelled products does affect sales but it is altered by parameters such as country and the type of product. For example, the market share of ecolabelled printing paper in Nordic countries is 70% while the market share of ecolabelled laundry products is around 90% in Sweden. Other examples include ecological food products like organic products which has very low percentage sales as compared to total food sales varying from almost 4% in Denmark to less that 1% in England. Such statistics cannot be considered as a success for green products and for that matter this sector has seen a further decrease in sales.
The big question that still needs to be answered is whether the market for green products is over saturated or is it not existent at all. Awareness about green products is a pre-condition for green product sales. Also the fact that the number of truly interested consumers in green products is not rising leads to the small market share. Statistics show that only 10-15% of the consumers are true green product loyal.
Another hindrance in the success of green products is the unavailability of green alternatives for all kinds of products and hence it is impractical to achieve high market share until and unless there is an expansion in the green product line. Since there are very limited options for the consumer, he/she rarely compares environmental qualities of products before making purchase decisions and therefore marketers don?t show keen interest in launching such substitutes. Most marketers, who got into manufacturing green product in 1990, did so as a reflex to the media hype about the degrading environment.
We cannot identify a consumer as green since the decision of a consumer changes according to the situation. The same green product consumer may choose to go for a non-green one in case of a different situation or type of product. Thus we cannot consider green behaviour to be a fixed attitude.
It is very important to lay emphasis on consumer awareness and understanding and trust on ecolabels. Improved consumer tools that are transparent and non misleading need to be introduced. It has been proved that consumers that are environmentally inclined are appealed more to such ecolabels while those individuals who are less interested tend to look for negatives in these ecological friendly products.
The main strategy to be employed is to make the environmentally inclined consumers aware of the environmental qualities of the green products. Though ecolablelling is successful in providing competitive edge, it has now become a policy tool.
It is the responsibility of the marketers and market researchers to understand the reasons behind the poor performance of the ecolabelled products.
It is important to have a comprehensive understanding of the green market for us to improve its market status and to adopt various aspects of conventional marketing for the same.
?Demand Analysis? is not the study of identifying the number of green consumer at present but also takes into account the current and future opportunities for the product. The market of these products is not only restricted to the existing consumers. We can increase the size of green product consumers by attracting individuals who are currently unaware of the benefits or are resistant to the use of these green products by communicating to them the advantages of these and stimulating increased use.
Various types of changes in system and operation may be required to move over to the manufacture of green products, some of which are discussed below-

  1. Change of Process Input-change in raw materials and parts will be required to manufacture eco-friendly substitutes.
  2. Change of Process Parameters-There might be a need to change parameters like voltage, coolant rate, feeding speed to bring down energy consumption and waste.
  3. Change of Processing Method (Single Operation)-A change in equipments or process logic will be required in order to lower energy consumption and waste.
  4. Change of entire Processing method involving Multiple Operations-There might arise a need to change the entire manufacturing set-up and introduce a green tech based manufacturing paradigm.

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