Green marketing: Promoting environmentally friendly products

Abstract

Green marketing is marketing of products that are environmental safe. Companies market­ing their green achievements were once a small segment of forward-thinking organisations, but since grown into a group of unlikely advocates that includes an oil company and the world’s largest retailer.

Environmental friendly production is vital in running future economies. By nature, plants take carbon dioxide from the air and give oxygen in respiration process. By doing this, they make ecology sensible and sustainable. Companies should stop polluting the environment and make their existence sensible and sustainable. They should go green.

This paper discusses what is green marketing, and to what extent are companies inte­grating its principles into their communications i.e. positioning green and green thinking into their operations? Paper also focuses on ‘what is the effect of green marketing in the satisfaction of the needs and wants of consumers’.

The challenges in an effort of going green are also put in the paper. Positioning strategies for Green i. e environment-friendly products are suggested in the paper.

Keywords: Green marketing, positioning green, environment

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. Other similar terms used are Environmental Marketing and Ecological Marketing

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, in my opinion, has not been proven conclusively.

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While green marketing is growing greatly as increasing numbers of consumers are willing to back their environmental consciousnesses with their dollars, it can be dangerous. The public tends to be sceptical 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. Presenting a product or service as green when it’s not is called greenwashing.

Green marketing can be a very powerful marketing strategy though when it’s done right.

Also Known as: Environmental Marketing, Ecological Marketing, Eco-Marketing.

Common Misspellings: Geen marketing, gren marketing.

Example:

• Chad’s green marketing campaign bombed bec

Environmental Product Strategies

• There are a large number of environmental issues impacting on the production of goods and products. For example:
• What is the impact of production, sourcing of materials and packaging on the environment?
• Can minimum levels of packaging and/or environmentally friendly packaging be achieved without compromising product quality or appeal?
• Supplier practices i.e. are they at least as environmentally friendly as the organisation they are supplying?

Environmentally friendly products can increase and decrease production costs; environmentally friendly production may increase costs for organisations and their suppliers but this may be offset by lower fuel bills through energy efficiency measures or an increase in sales caused by a positive product image. An organisation may able to pass increases in production costs (caused by EFS) to consumers. However, this will depend on the level of increase, type of consumer, competitor prices for the same type of product and the strength of the economy. For example during times of recession consumers will place price above many if not all of the factors making up the marketing mix.

Environmental Place Strategies

All organisations will need to “carefully” time when their product reaches consumers; exact time of distribution will depend on the product or service being distributed. Such timing may have an environmental implication.

Some products will need to reach the consumer shortly after production for example fresh food in order to retain freshness, taste or nutritional value. The fastest method of distribution may damage the environment. Conversely a more environmentally friendly method e.g. via canals may impact on speed of distribution and consequently quality of the product. A method of distribution that combines speed with “environmentally friendliness” may increase distribution costs as some of these processes are still under development e.g. electric vehicles.

In addition to the type of transport used for distribution, an organisation will need to review distribution techniques; For example timing deliveries so that they occur during off peak hours and do not contribute to congestion. Some organisations attempt to make fewer deliveries, whilst others promote concentrated products (e.g. fabric conditioner) as they increase the number of products that can carried in each delivery vehicle.

Even if “environmentally friendly distribution” is not at the top of an organisation’s list of priorities, government policies may elevate it to the top. Congestion charging and low emission zones have been introduced in the London. Apart from the obvious increase in costs emanating from observance of such policies, a failure to observe environmentally friendly rules and regulations will lead to fines and sanctions and consequently negative publicity.

After reviewing internal distribution methods an organisation will need to review supplier and subcontractor distribution as consumers and the media expect organisations claiming environmental credentials to only liaise with other environmentally friendly organisations.. For example do the subcontractors use Bio-fuel? Are the subcontractors actively managing their “carbon footprint” or energy use?

Environmental Promotion Strategies

Due to the consumer, celebrity and government appetite for protecting the “environment” environmentally friendly practices are used as promotional tools. For example the award of ISO 14001 (which certifies that an organisation has certain environmental standards, as certified by an independent external auditing organisation) is often quoted in marketing literature.

Product packaging that can be recycled will have a message on the packaging clearly stating the recycling properties for the packaging. Similarly organic products will be labelled, not only on the packaging but also around the shelving displaying the organic produce.

Some organisations have sought to reduce costs through the promotion of environmentally friendly strategies. The use of carrier bags has changed dramatically in the UK over the last 2-3 years. Retailers actively promote the benefit of reusable bags as they have many benefits

• Lower costs for the retailer
• Consumers “feel good” as they believe that the use of a reusable bag is helping the environment
• Fewer carrier bags go to landfill

Another example is hotels offering guests the opportunity to engage in fewer linen and towel changes. Such strategy is environmentally friendly as it reduces the use of detergents and energy but it also reduces costs for the hotel and improves corporate image.

Some organisations providing products and services which may harm the environment have added “off setting” methods to their portfolios and marketing literature. The idea behind “off setting” is that the consumer is offered the opportunity to indirectly engage in an activity (such as tree planting) that benefits the environment and therefore balances/evens out the damage they caused for example through flying. Such schemes attempt to ease the consumer’s conscience and retain a positive image for the organisation providing the environmentally unfriendly product or service.

Environmental Pricing Strategies

Throughout this article we have discussed how environmentally friendly strategies can either increase or decrease organisational costs. The ideal marketing mix is a reduction in costs and/or an increased in costs which is exceeded by an increase in profits.

Pricing must reflect the demand for the product an incorrectly priced product will reduce demand; this is now further complicated by the impact environmental issues have on pricing. If an organisation is paying more for raw materials because the supplier is “environmentally friendly” it may decide to “pass on” this price increase to the consumer, the amount the ideal amount will be dictated by the target consumer.

On the other hand companies cutting costs and increasing profits at the expense of the environment may be risking negative publicity, fines, sanctions or may simply lose out to organisations actively promoting their environmentally friendly practices even if such competitors offer more expensive products and services.

Summary

The environmental marketing mix is becoming extremely important in today’s business world. Firms will have to carefully manage this mix if they are to successfully operate in a world which is becoming increasingly aware of climatic changes.

Where’s the beef?” may not be the most accurate phrase, but it’s the first that comes to mind.

Seriously, that’s the only thought I could come up with in the face of this news: McDonald’s is swapping out the red in its logo for “a deep hunter green” to tout its environmental credentials in Europe.

From an Associated Press article by Mary MacPherson Lane:

About 100 German McDonald’s restaurants will make the change by the end of 2009, the company said in a statement Monday. Some franchises in Great Britain and France have already started using the new color scheme behind their Golden Arches.

“This is not only a German initiative but a Europe-wide initiative,” Martin Nowicki, McDonald’s Germany spokesman, told The Associated Press. […]

The company has warmed to “greener” practices, including environmentally friendly refrigeration and converting used oil into biodiesel fuel.

“With this new appearance we want to clarify our responsibility for the preservation of natural resources. In the future we will put an even larger focus on that,” Hoger Beek, vice chairman of McDonald’s Germany, said in the statement.

Leaving aside the fundamental unsustainability of the fast food industry as a whole, this is not to say that there is nothing behind McDonald’s claims of environmental action — the company is working on green buildings, electric vehicles and published a report earlier this year highlighting its best green efforts.

Who are the green consumers?

Understanding the demographics of green consumerism can help entrepreneurs explore the environmental market, and home in on likely prospects. Research has shown that green consumers:

• are sincere in their intentions, with a growing commitment to greener lifestyles;
• almost always judge their environmental practices as inadequate;
• do not expect companies to be perfect in order to be considered ‘green’. Rather, they look for companies that are taking substantive steps and have made a commitment to improve.

However, they also:

• tend to overstate their green behaviour, including the number of green products they actually use;
• want environmental protection to be easy, and not to entail major sacrifices;
• tend to distrust companies’ environmental claims, unless they have been independently verified;
• lack knowledge about environmental issues, and tend not to trust themselves to evaluate scientific information about environmental impacts. However, at the same time they are eager to learn, and this means that consumer education is one of the most effective strategies that entrepreneurs can use.

The most responsive age group tends to be young adults, many of whom are influenced by their children. In addition, women are a key target for greener products, and often make purchases on behalf of men.

The best ‘green’ customers are people with more money to spend. As a result, the most promising products for ‘greening’ tend to be at the higher end of the market. The most promising outlets for green products are retail stores frequented by better-off shoppers.

In general, green consumers have the education and intellectual orientation to appreciate value; they will understand evidence that is presented in support of environmental claims.

In the US, children and teens are generally more concerned than adults about the environment, and are more knowledgeable about green alternatives. Increasingly, they influence their parents’ purchasing decisions. Equally importantly, millions of them will reach adulthood in the next decade, and gain purchasing power of their own.

At the opposite end of the age spectrum, US consumers born before the 1950s are the least ‘green’. As their numbers diminish, their share of consumer purchases will dwindle.

In Canada, children and parents alike tend to have strong environmental concerns. Older people, too, tend to be active green purchasers.