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Green Marketing: Advantages and Disadvantages

Info: 3646 words (15 pages) Dissertation
Published: 1st Sep 2021

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Tagged: MarketingSustainability

ACKNOWLEDGEMENT

As I sum up draft of my study, I appreciatively reminisce the contribution of all those people without whose support and help, this study would have never taken its present form.

I take this opportunity to express my sincere gratitude towards the pillars of successful completion of Dissertation Report, without whose unflinching assistance & co-operation at all times it would rather have been impossible for me to achieve the desired goal.

I am greatly indebted to my faculty guide & mentor, Mr.Saravana Krishnamurthy, Professor Kohinoor Business School, Khandala for his undying support & encouragement throughout the project.

Lastly I would like to thank my school, Kohinoor Business School, Khandala for giving me this opportunity to put to practice, the theoretical knowledge that I imparted from the program .

Last but not the least I express my thanks to all the respondents who showed a keen interest in my Project, relatives, friends and neighbors to provide me the necessary resources to complete the Project & the help provided to me at every step.

DEDICATION

“Keep your dreams alive. Understand to achieve anything requires faith and belief in yourself, vision,hard work, determination, and dedication. Remember all things are possible for those who believe.”

-Merlin Olsen

I dedicate this report to my parents and friends in recognition of their worth and to my teachers who are the guiding force for me and it is their effort and hard work that showed me the path of success and prosperity which would be there for me for the rest of my life.

I would like to thank and dedicate this report to everyone who knowingly and unknowingly contributed to the completion of my Summer Internship Project.

I hope people find this report useful and the subject matter adds to their knowledge.

ABSTRACT

In today’s business world environmental issues plays an important role in marketing. All most all the governments around the world have concerned about green marketing activities that they have attempted to regulate them. For example, in the United States (US) the Federal Trade Commission and the National Association of Attorneys-General have developed extensive documents examining green marketing. There has been little attempt to academically examine environmental or green marketing. It introduces the terms and concepts of green marketing, briefly discuss why going green is important and also examine some of the reason that organizations are adopting a green marketing philosophy. It also focuses some of the problems with green marketing.

It identifies the key to successful green marketing:

  • Credibility
  • Publicize stories of the company’s and employees’ green initiatives.
  • Enter environmental awards programs to profile environmental credentials to customers and stakeholders.
  • Never overstate environmental claims or establish unrealistic expectations.

It also tells about Why Are Firms Using Green Marketing

  • 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
  • Competitors’ environmental activities pressure firms to change their environmental marketing activities
  • Cost factors associated with waste disposal, or reductions in material usage forces firms to modify their behavior

This report stresses upon the effect of green marketing on the consumers. Green marketing isn’t just a catchphrase; it’s a marketing strategy that can help you get more customers and make more money. But only if you do it right.

OBJECTIVE

  1. To determine whether Indian consumers are ready for Green Marketing
  2. To determine whether Price has effect on purchase of green products
  3. To determine whether environment consciousness has effect on purchase of green products
  4. To determine whether Availability has effect on the purchase of green products
  5. To determine whether Awareness has an effect on Purchase of green products

RESEARCH METHDOLOGY

Research Methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. In it we study the various steps that are generally adopted by a researcher in studying his research problem along with the logic behind them. It is necessary for the researcher to know not only the research methods/techniques but also the methodology. Researchers not only need to know how to develop certain indices or tests, how to calculate the mean, the mode, the median or the standard deviation, how to apply particular research techniques, but they also need to know which of these methods or techniques, are relevant and which are not, and what would they mean and indicate and why. Researchers also need to understand the assumptions underlying various techniques and they need to know the criteria by which they can decide that certain techniques and procedures will be applicable to certain problems and others will not.

Thus, when we talk of research methodology we not only talk of the research methods but also consider the logic behind the methods we use in the context of our research study and explain why we are using a particular method or technique and why we are not using others.

INTRODUCTION

According to the American Marketing Association [1],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.

The term green marketing [2] 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” Thus green marketing incorporates a broad range of activities, including product modification, changes to the production process, packaging changes, as well as modifying advertising.

My definition which encompasses all major components of other definitions is: “Green or Environmental Marketing consists of all activities designed to generate and facilitate any exchanges intended to satisfy human needs or wants, such that the satisfaction of these needs and wants occurs, with minimal detrimental impact on the natural environment.” This definition incorporates much of the traditional components of the marketing definition that is “All activities designed to generate and facilitate any exchanges intended to satisfy human needs or wants”.

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 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 of which harm the environment in the way 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.

IMPORTANCE OF GREEN MARKETING

Man has limited resources on the earth [3], with which she/he 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 new or 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 selling organization’s objectives.

When looking through the literature there are several suggested reasons for firms increased use of Green Marketing. Five possible reasons cited are:

  • 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
  • Competitors’ environmental activities pressure firms to change their environmental marketing activities
  • Cost factors associated with waste disposal, or reductions in material usage forces firms to modify their behavior
  • Opportunities

GOALS OF GREEN MARKETING

  • Eliminate the concept of waste.
  • Reinvent the concept of product.
  • Make prices reflect actual and environmental costs.
  • Make environmentalism profitable.
  • Bringing out product modifications.
  • Changing in production processes.
  • Packaging changes.
  • Modifying advertising.

NEED OF GREEN MARKETING: AN ANTHROPOLOGICAL VIEW

Issues like Global warming [3] and depletion of ozone umbrella are the main for the healthy survival. Every person rich or poor would be interested in quality life with full of health and vigor and so would the corporate class. Financial gain and economic profit is the main aim of any corporate business. But harm to environment cost by sustain business across the globe is realized now though off late. This sense is building corporate citizenship in the business class. So green marketing by the business class is still in the selfish anthological perspective of long term sustainable business and to please the consumer and obtain the sanction license by the governing body. Industries in Asian countries are catching the need of green marketing from the developed countries but still there is a wide gap between their understanding and implementation.

CHALLENGES IN GREEN MARKETING

NEED FOR STANDARDIZATION

It is found that only 5% of the marketing messages from “Green” campaigns are entirely true and there is a lack of standardization to authenticate these claims. There is no standardization to authenticate these claims. There is no standardization currently in place to certify a product as organic. Unless some regulatory bodies are involved in providing the certifications there will not be any verifiable means. A standard quality control board needs to be in place for such labeling and licensing.

NEW CONCEPT

Indian literate and urban consumer is getting more aware about the merits of Green products. But it is still a new concept for the masses. The consumer needs to be educated and made aware of the environmental threats. The new green movements need to reach the masses and that will take a lot of time and effort.

By India’s ayurvedic heritage, Indian consumers do appreciate the importance of using natural and herbal beauty products. Indian consumer is exposed to healthy living lifestyles such as yoga and natural food consumption. In those aspects the consumer is already aware and will be inclined to accept the green products.

PATIENCE AND PERSEVERANCE

The investors and corporate need to view the environment as a major long-term investment opportunity, the marketers need to look at the long-term benefits from this new green movement. It will require a lot of patience and no immediate results. Since it is a new concept and idea, it will have its own acceptance period.

AVOIDING GREEN MYOPIA

The first rule of green marketing is focusing on customer benefits i.e. the primary reason why consumers buy certain products in the first place. Do this right, and motivate consumers to switch brands or even pay a premium for the greener alternative. It is not going to help if product is developed which is absolutely green in various aspects but does not pass the customer satisfaction criteria. This will lead to green myopia. Also if the green products are priced very high then again it will loose its market acceptability.

BENEFITS OF GREEN MARKETING

Today’s consumers are becoming more and more conscious about the environment and are also becoming socially responsible. Therefore, more companies are responsible to consumers aspirations for environmentally less damaging or neutral products. Many companies want to have an early mover advantage as they have to eventually move towards becoming green.

Some of the advantages of green marketing are:

  • It ensures sustained long term growth along with profitability.
  • It saves money in the long run, though initially the cost is more.
  • It helps the companies market their products and services keeping the environment aspects in mind. It helps in accessing the new markets and enjoying the competitive advantage.
  • Most of the employees also feel proud and responsible to be working for an environmentally responsible company.

GREEN MARKETING MIX

PRODUCT

Entrepreneurs [5] wanting to exploit emerging green markets either: Identify customers’ environmental needs and develop products to address these needs or will develop environmentally responsible products to have less impact than competitors.

The increasingly wide variety of products on the market that support sustainable developments are:

  • Products made from recycled goods, such as Quick’ N Tuff housing materials made from recycled broccoli boxes.
  • Products that can be recycled or reused.
  • Efficient products, which save water, energy or gasoline, save money and reduce environmental impact.
  • Products with environmentally responsible packaging, McDonalds, for example, changed their packaging from polystyrene clamshells to paper.
  • Products with green labels, as long as they offer substantiation.
  • Certified products, which meet or exceed environmentally responsible criteria.
  • Organic products-many customers are prepared to pay a premium for organic products, which offer promise of quality. Organic butchers, for example, promote the added qualities such as taste and tenderness.
  • A service that rents or loans products-toy libraries.

Whatever the product or service, it is vital to ensure that products meet or exceed the quality expectation of customers and is thoroughly tested.

PRICE

Pricing is the critical element of the marketing mix. Most customers will only be prepared to pay a premium if there is a perception of additional product value. This value may be improved performance, function, design, visual appeal or taste. Environmental benefits will be often be the deciding factor between products of equal value or quality.

Environmentally responsible products, however are often less expensive when product life cycle coast are taken into consideration, for example fuel-efficient vehicles, water efficient printing and non-hazardous products.

PLACE

The choice of where and when to make products available will have significant impact on the customers you attract. Very few customers go out of their way to buy green products merely for the sake of it. Marketers looking to successfully introduce new green products should position them broadly in the market place so they are not just appealing to a small green niche market.

The location must also be consistent with the image you want to project and allow you to project your own image rather than being dominated or compromised by the image of venue. The location must differentiate you from the competitors. This can be achieved by in-store promotions and visually appealing displays or using recycled materials to emphasize the environmental and other benefits.

PROMOTION

Promoting products and services to target markets include paid advertising, public relations, sales promotions, direct marketing and on-site promotions. Smart green marketers will be able to reinforce environmental credibility by using sustainable marketing and communication tools and practices. For example, many companies in the financial industry are providing electronic statements by email; e-marketing is rapidly replacing more traditional marketing methods and printed materials can be produced using recycled materials and efficient processes such as waterless printing.

Retailers, for example are recognizing the value of alliances with other companies, environmental groups and research organizations. When promoting their environmental commitment to reduce the use of plastic bags and promote their green commitment, some retailers sell shopping bags and promote their green commitments.

Moving Towards Green Marketing

The era of green marketing has begun. It has already been granted wide acceptance by all stakeholders. However, there is a need to lay down the standards and practices, in order to bring in objectivity in the judgment of various national and international agencies. This will not only encourage the activities of green marketing but shall also provide the much needed level playing fields to all.

PRESENT TRENDS IN GREEN MARKETING IN INDIA [6]

Organizations Perceive Environmental marketing to be an Opportunity that can be used to achieve its objectives.

Firms have realized that consumers prefer products that do not harm the natural environment as also the human health. Firms marketing such green products are preferred over the others not doing so and thus develop a competitive advantage, simultaneously meeting their business objectives.

Organizations believe they have a moral obligation to be more socially responsible.

This is in keeping with the philosophy of CSR which has been successfully adopted by many business houses to improve their corporate image.

Firms in this situation can take two approaches:

  1. Use the fact that they are environmentally responsible as a marketing tool.
  2. Become responsible without prompting this fact.

Governmental Bodies are forcing Firms to Become More Responsible. In most cases the government forces the firm to adopt policy which protects the interests of the consumers. It does so in following ways:

  • Reduce production of harmful goods or by -products
  • Modify consumer and industry’s use and /or consumption of harmful goods; or
  • Ensure that all types of consumers have the ability to evaluate the environmental composition of goods

Competitors’ Environmental Activities Pressure Firms to change their Environmental Marketing Activities.

In order to get even with competitors claim to being environmentally friendly, firms change over to green marketing. Result is green marketing percolates entire industry.

Cost Factors Associated With Waste Disposal or Reductions in Material Usage Forces Firms to Modify their Behavior.

With cost cutting becoming part of the strategy of the firms it adopts green marketing in relation to these activities. It may pursue these as follows:

  • A Firm develops a technology for reducing waste and sells it to other firms.
  • A waste recycling or removal industry develops.

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