Customers often link green marketing with terms such as recyclable, refillable, ozone friendly, and environmentally friendly. Whilst these terms are green marketing claims, in general, green marketing is a much broader concept. Green marketing is applicable to consumer goods, industrial goods, and as well as services. Theoretically speaking, green marketing is about designing, developing, and delivering products that are eco-friendly which cause less possible harm to the environment and its stakeholders. The American Marketing Association (AMA) has defined green marketing as the marketing of products that are not harmful to the natural environment.
History of Green Marketing
Although some considerations were given to green marketing in the 1970s, it was actually in the late 1980s that the idea of green marketing came out. All began in Europe in the early 1980s when some manufactured goods were discovered to be harmful to the natural environment. Since that, green marketing has gone through three phases.
The late 1980s marked the first phase of green marketing when the concept of “green marketing” was first discussed. The first phase was termed “Ecological” green marketing. Throughout that stage, all marketing activities were attempting to provide solutions to environmental problems. Marketers began to indulge in different forms of green marketing to satisfy the needs and want of the consumers. It was thought that people would buy green products and this would, in turn, increase the organization’s goodwill. These would help to capture a greater share of the market. Nevertheless, nothing happened as expected. The reason put forward for this repercussion was greenwashing. Businesses were only showing that they were green but the truth is that they were doing nothing. Firms were just adding up environmental claims to their existing products in order to increase sales.
Green marketing entered the second phase when marketers witnessed the backlash. The Second phase was termed “Environmental” green marketing. During that phase, the focal point shifted to clean technology, which was about designing new products which would not harm the natural environment.
At the start of the mid-1990s, people began to be more aware of the protection and preservation of the natural environment. People were becoming more alert about environmental problems. This marked the third phase. The latter was termed “Sustainable” green marketing. As customers were buying products and services that were less detrimental to the natural environment, organizations were forced to change their selling behaviors.
Green Consumers and Green Products/Service
Consumers in the USA and Western Europe had become more concerned about the environment in the past decade. This trend has passed to the Asian regions. Thus, almost all consumers in the world are becoming progressively more concerned about the environment. More and more people are demanding green products and services.
A green product/service is defined as a product/service that will not spoil the environment or deprecate natural resources and can be recycled or conserved.
Businesses are producing more and more green products and services as they realize they are becoming profitable. However, for many businesses, going green does not mean saving the environment but instead helping to save the business. Hence, businesses must seek information to understand and better serve the green consumer.
Types of Green Consumers
There are different types of green consumers. It is vital to understand some of their common uniqueness to help businesses to observe the market for environmental products and services.
There are four types of green consumers namely:
- Behavioral Greens – These types of consumers buy only products/services which have a positive impact on the natural environment. They do not like products/services that pollute the environment. These consumers incorporate green practices into their everyday life.
- Think Greens – These consumers buy green products or services when they can; however, if their budgets restrict them, they will non buy green products or services.
- Potential Greens – These types of consumers do not act green but if influenced or encouraged by family and friends, they can act green.
- True Browns – These consumers ignore environmental issues and may even avoid firms that sell products/services with a heavy environmental focus.
Green Consumer Attitude and Buying Behaviour
With the emergence of green marketing, consumers have changed their buying behavior. They are demanding more green products and services. Consumers are converting their environmental concerns into green buying behavior. Environmentally conscious people were changing their buying behaviors for a better environment. People were feeling a moral responsibility to buy green products. However, people who are environmentally conscious do not always behave in an environmentally friendly manner.
Income is linked with environmental buying behavior. The reason put forward was that people with high income are able to pay an extra sum of money associated with green products. Also, there is a linkage between the level of education and environmental attitudes and behavior. The reason put forward is that higher-educated persons understand much better environmental issues, thus, act in an environmentally responsible way.
Importance of Green Marketing
The importance of green marketing can be found from the basic definition of economics: Economics is the study of how people use their limited resources to try to satisfy unlimited wants. Resources are limited and human wants are unlimited. Therefore, as organizations have fewer resources, they have to find new ways to satisfy these unlimited wants. The emergence of the concept of green marketing has made it possible for organizations to use the resources in an efficient way and at the same time minimizing waste. There is a rising interest among consumers regarding the protection of the natural environment and they are changing their purchasing behavior. People want a clean environment to live in. Consequently, many firms have to indulge in green marketing to minimize waste and at the same time act in response to the increasing demand for eco-friendly products and services.
Nowadays, we are living in an age of recyclable, non-toxic, and environment-friendly goods and services. Green marketing has become a new tool for organizations to satisfy the needs and wants of consumers and earn high profits.
Greening the Organization
There are 3 ways in which organizations can ‘green’ themselves namely value-addition processes, management systems, and products.
The value-addition processes can become ‘green’ by redesigning them, changing the technology, or introducing new technology with an intention to reduce the negative environmental impact caused all over the stages of production.
Secondly, organizations can also adopt management systems that generate circumstances to reduce negative environmental impacts of the value-addition processes. Furthermore, the organizations must have measurable performance indicators to make sure that the adopted management systems are generating positive results.
The third greening strategy is about products. This can take place in the following ways:
- Repair – increase the lifetime of a product by repairing.
- Recondition – increase the lifetime of a product through renovation.
- Remanufacture – produce new products based on the old ones.
- Reuse – design a product so that it can be used again and again.
- Recycle – reprocess and convert used product into raw material to be used in another or the same product.
- Reduce -make use of production technique that uses fewer raw materials and generates less waste, without dropping the level of benefits of the product.
Ginsberg and Bloom (2004) constructed a framework to determine which green strategy a firm is using. There are four types of green strategies a firm can use.
- Lean Green – These firms try to be good corporate citizens; however, they do not publicize or market their green initiatives. On the other, hand, they want to reduce their cost, environmental impact and improve efficiencies through environmental-friendly activities. This strategy helps to increase productivity while decreasing the environmental impact and the costs associated with productivity. Therefore, this strategy can help to make savings. An example of a lean green company is Coca-Cola.
- Defensive Greens – These firms use green marketing as a tool to respond to a catastrophe or to competitors’ actions. They seek to improve their brand image and diminish damage, recognizing that the green market segments are important and money-spinning sectors that they cannot afford to lose.
- Shaded Greens – These firms invest in long-term environmentally friendly processes that involve a considerable financial and non-financial commitment. They can differentiate themselves on greenness, but they do not do so because they work in markets in which they can gain more money by stressing other attributes. Toyota implements this strategy in marketing their Prius.
- Extreme Greens – These firms are contoured by holistic philosophies and values. In these firms, environmental issues and responsibility are fully incorporated into the business and product life-cycle processes. The Body Shop, Patagonia, and Honest Tea are examples of extreme green firms.
The Green Marketing Mix
The decline of precious natural resources has forced marketers to come out with a new marketing mix that preserves the green resources and at the same time, bringing out value-added products and services to the consumers. This facet is considered very important due to global warming, ozone depletion, wearing out of natural resources, and the need for safe and healthy products.
The green marketing mix takes its foundations into the traditional marketing mix itself. The green marketing mix comprises 7 elements namely:
- Price – Price can be defined as the monetary value place on a good or service that is offered for sale. Goods or services must not be heavily priced; they must be within the range of competitors except when they have an extra value such as better performance, design, and appeal or taste so as people are encouraged to buy green goods or services.
- Product/Service – Product refers to any commodity offered for sale in order to satisfy a need or want. Green products can be defined as goods that have a less detrimental impact on the environment. Moreover, green products must be produced in a way that saves resources and generates less harmful by-products. Green products must not only reduce harmful effects on the environment but at the same time be able to satisfy the needs and wants of the consumers.
- Package – Packaging can be defined as activities done to protect goods from damage or help to carry the goods away. The packaging of a product must not be harmful to the environment just like the product itself.
- Distribution – Distribution is the arrangement done to transfer goods or services from the place of production to point of sale. To carry out green marketing well, organizations must ensure that the distribution channel does not have a negative impact on the environment. The distribution channel must bestow a good image of the organization.
- Promotion – Promotion includes all the tools of promotion, such as advertising, websites, videos, and presentations to influence, inform or persuade potential buyers’ purchasing decisions. Promotion must have a friendly approach as regards the use of material, manpower, and other resources. Claims must be honest, truthful, and not misleading. Organizations must choose mediums that are green. Moreover, the chosen advertising agency must also share a philosophy of green marketing.
- People – To become a green company, it is important for the leader to be concerned about the natural environment and environmental problems. Thus, he will spread this concern to the employees. It is essential for employees to have knowledge about eco-friendliness in all aspects of production and consumption so that the goal of green marketing is fulfilled. Therefore, employees must be educated on green issues. For instance, employees must be taught simple rules and gestures such to use less paper, communicate electronically, etc.
- After Sales Service – After-sales service refers to the provision of service to a customer after a purchase is made. When a problem occurs with a product, that product must be repaired and not replace. However, if the product cannot be repaired, then it can be replaced. The broken product must be sent for recycling so as the materials of the broken product can be used to manufacture another or a new product.
Why Organizations are Adopting Green Marketing – Reasons
Many companies have indulged in green marketing over the past years. It is interesting to know why organizations have changed their behavior. There are five possible reasons for companies to venture into green marketing.
- Opportunity – Nowadays, environmental concern is rising rapidly as an essential topic for consumers because of global warming and other environmental issues. Both individuals and industrial are becoming concerned about the environment. Thus, as demands of the customers are changing, organizations are spotting these changes as an opportunity to be exploited. Therefore, it can be presumed that organizations that adopt green initiatives have a competitive advantage over those that are not green.
- Social Responsibility – Many organizations think that they have a moral obligation to behave in an environmentally friendly manner. Organizations have to preserve the limited natural resources to meet the needs of the coming generation. Hence, organizations must achieve their profit-related aims as well as their environmental objectives. Therefore, organizations must incorporate environmental issues into their corporate culture. Companies can behave in two ways in this situation. First, they can use their green initiatives as a marketing tool, or second, they can become responsible without promoting themselves as green companies. An example of a company that adopts both strategies is Body Shop. Body Shop promotes itself as environmentally responsible. This behavior helps the company to gain a competitive advantage. Nevertheless, the firm was established explicitly to sell environmentally friendly products. Therefore, Body Shop’s green actions are linked with its corporate culture; rather merely remains a competitive tool. An example of an organization that does not promote its green initiatives is Coca-Cola. Coca-Cola indulges itself in various recycling activities and it has also modified its packaging to minimize its environmental impact. However, Coca-Cola has not promoted itself as a green company; thus, many customers do not know that Coca-Cola is a very environmentally committed organization.
- Governmental Pressure – Another reason for firms to venture into green marketing is that governments are forcing them to become more responsible. Governments are in charge to protect customers and society and this protection has major green marketing implications. There are numerous governmental regulations relating to environmental marketing which are devised to protect customers: reducing the production of harmful goods, modifying the consumption of harmful goods, and ensuring that all consumers have the ability to assess the environmental composition of good. Furthermore, governments have established policies to control the number of harmful wastes produced by organizations.
- Competitive pressure – The environmental activities of competitors are forcing organizations to change their environmental marketing activities. Very often; companies watch their competitors promoting their environmental behaviors and try to follow this behavior. In some instances, this competitive pressure has forced an entire industry to alter its operation to reduce its harmful impacts. For example, many manufacturers followed Xerox after the introduction of Xerox’s “Revive 100% Recycled paper”.
- Cost or profit issues – Organizations also indulge in green marketing because of cost or profit-related issues. Sometimes, by reducing harmful wastes, organizations can save money in the long run. Organizations need to revise their production processes to minimize waste. Very often, effective and efficient production processes help to reduce waste and also the need for raw materials. Thus, there is double cost savings as both waste and raw material are reduced. Furthermore, organizations can develop new technology to reduce waste and sell them to other organizations.
Benefits of Green Marketing
Nowadays, consumers have become more and more conscious of the environment. They have changed their buying behavior. Therefore, organizations have also started to behave in an environment-friendly manner. They want to gain a first-mover advantage over their competitors. Some advantages of green marketing are as follows:
- There is sustainable long-standing growth together with high profit.
- It helps to gain new markets.
- Employees feel proud and responsible to work in an environmentally responsible organization.
- Organizations can charge a high price for products that are environment-friendly.
- It helps to build brand equity and gain customer loyalty.
- It helps to increase product/ service value.
Problems with Green Marketing
Many organizations want to go green and be associated with green products or services to benefit from the advantages of green marketing. However, there are a number of problems that organizations must overcome when going green. Some problems associated with green marketing are identified below.
Organizations must make sure that their actions are not misleading customers or violate any regulation dealing with environmental marketing. Green marketing claims must clearly state environmental benefits.
Moreover, it is extremely difficult to establish policies that will deal with all environmental issues. For instance, procedures developed to manage environmental marketing deal with a little set of issues, i.e., the truthfulness of environmental marketing claims.
Organizations can face the risk that their current environmentally responsible action can have adverse effects in the future. For example, in the aerosol industry, firms switched from CFCs (chlorofluorocarbons) to HFCs (hydrofluorocarbons). However, afterward, it was found that HFCs are also greenhouse gas. Therefore, with limited scientific knowledge, it is impossible to know what an organization is currently doing is good. This is why some companies like Coca-Cola and Walt Disney World do not promote them as green companies although they are socially responsible.
Furthermore, when organizations modify their products due to the increasing consumer concern about the environment, they must contend that customers are not always right about certain things. For instance, McDonald’s substituted its clamshells with plastic-coated paper to satisfy customers’ wants for environment-friendly packaging. However, through some scientific evidence, researchers showed that polystyrene is not that environmentally friendly that people think.
Moreover, by reacting to competitor’s pressures, firms can make the same mistake as the leader. For instance, Mobil Corporation followed competition and launched “biodegradable” plastic garbage bags. Although these bags were biodegradable, the circumstances under which they were disposed of did not permit biodegradation to occur. Mobil was sued by some US states for misleading advertising claims. Hence, following blindly competition can have lavish consequences.
What organizations do, will always produce a certain percentage of waste. However, some organizations to maintain a level of profit do not address the important issue of environmental degradation. They instead concentrate on short-term solutions than the long term. Organizations must concentrate on long-term solutions such as attempting to minimize waste rather than on short term such as to find “appropriate” uses which will shift the problem around.
However, it should be noted that reviewing the production system is very costly, thus, many organizations do not adopt an environmentally friendly approach.