AN EXPLORATORY STUDY OF THEORIES OF GREEN MARKETING AND ITS PRACTICES

 

Hemantkumar P Bulsara

Sardar Vallabhbhai National Institute of Technology, India

E-mail: hemantbulsara@gmail.com

 

Manita Matharu

Amity school of Business; Amity University, Ukraine

E-mail: manita.mktg@gmail.com

 

Krystyna Tarasova

Odesa National Economic University, Ukraine

E-mail: ckvett@gmail.com

 

Olha Rulinska

Odesa National Economic University, Ukraine

E-mail: rulinskaya86@gmail.com

 

Inna Gogol

State Agrarian and Engineering University in Podilya, Ukraine

E-mail: gogol-inna@meta.ua

 

Submission: 8/25/2021

Revision: 9/29/2021

Accept: 9/30/2021

 

ABSTRACT

One business area where environmental issues have received a great deal of discussion in the popular and professional press is marketing. Terms like "Green Marketing" and "Environmental marketing" appear frequently in the popular press. Many governments around the world have also become so concerned about green marketing activities. Attention was drawn to the subject in late1970’s when the American Marketing Association organized a workshop on Ecological Marketing in 1975. Green Marketing has been an important academic research topic since its inception. But at the same time one of the biggest problems with the green marketing area is that there has been little attempt to academically examine environmental or green marketing. Although environmental issues influence all human activities, few academic disciplines have integrated green issues into their literature.


The aim of the study was to explore research and real-life examples of green marketing that may help in future empirical research. This paper attempts to examine the concept and evolution of green marketing, identify what makes marketing green. An attempt has also been made to discuss some examples of green marketing practices in Indian context and ascertain the ways to improve consumer appeal for environmentally preferable products through different marketing strategies.

Keywords: Environmental marketing; Green marketing; Brand; India

 

 

1.       INTRODUCTION

            Terms like "Green Marketing" and "Environmental Marketing" appear frequently in the popular press. Many governments around the world have become so concerned about green marketing activities that they have attempted to regulate them (Polonsky 1994a).

            Environmental marketing has been defined in terms of customer satisfaction in a sustainable fashion which refers as ‘the holistic management process responsible for identifying, anticipating, and satisfying the requirements of the consumers and society, in profitable and sustainable way’ (Peattie, 1999). 

            Investopedia explains 'Green Marketing' as; Green marketing companies seek to go above and beyond traditional marketing by promoting environmental core values in the hope that consumers will associate these values with their company or brand. Engaging in these sustainable activities can lead to creating a new product line that caters to a new target market.

            Also known as sustainable marketing, environmental marketing or ecological marketing, refers to an organizations effort at designing, promoting, pricing and distributing products that will not harm the environment (Pride & Ferrell, 1993).

            Green marketing has been defined as 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 (Polonsky, 1994).

            Although an agreed upon definition of “Green” does not exist, a focus on “GREEN” is generally considered as a holistic effort to reduce the impact of resource use while making products or delivering services that won’t harm people or the planet.

            According to Kangis (1992), green marketing must be more than either a green way of marketing, or the marketing of so-called green products. Green marketing that has been previously and primarily focused on the ecological context has been shifted to more sustainability issues in the marketing efforts and main focus now is in socio-economic and environmental context.

            Whereas, green market is identified as a part of market segments based on the greenness’ of the consumer (Simintiras et al., 1994).

            The term green marketing refers to the strategies to promote products by employing environmental claims either about their attributes or about the systems, policies and processes of the firms that manufacture or sell them (Prakash, 2002).

            Clearly, green marketing is part and parcel of the overall corporate strategy (Menon & Menon, 1997). Along with manipulating the traditional marketing mix (product, price, place and promotion), it requires an understanding of public policy processes. Green marketing also ties closely with issues of industrial ecology and environmental sustainability such as extended producers, resource flows and eco-efficiency (Prakash, 2002).

            One of the main barriers to the development of green marketing is the lack of proper promotion of the national environmental label, and even the products labeled with it in general. The consumer is often simply unaware of its benefits. Therefore, the support of the state in this matter is extremely necessary, at least at the initial stage of development of this direction in marketing.

            One of the biggest problems with the green marketing area is that there has been little attempt to academically examine environmental or green marketing.

            The aim of the study was to explore research and real-life examples of green marketing that may help in future empirical research.

2.       REVIEW OF LITERATURE

            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 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". Unfortunately, a majority of people believe that green marketing refers solely to the promotion or advertising of products with environmental characteristics. Terms like phosphate free, recyclable, refillable, ozone friendly and environmentally friendly are some of the terms consumers most often associate with green marketing. While these terms are green marketing claims, in general green marketing is a much broader concept.

            In 1992, the Federal Trade Commission (FTC) stepped in to prevent further deception. The FTC created guidelines for the use of environmental marketing claims such as "recyclable," "biodegradable," "compostable," and the like. The FTC and the U.S. 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. 

            Examples of environmentally-beneficial products and services:

·       Paper containing post-consumer wastepaper;

·       Cereals sold without excess packaging;

·       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.

            Today, special labels help the public identify legitimate environmentally preferable products and services. Several environmental groups evaluate and certify products and services that meet FTC standards—or their own tougher standards. 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. Green marketing 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 (Ottoman et al., 1999).

            Though green marketing has in recent years received considerable attention from both marketing practitioners and academicians, it has existed for decades and has been practiced by business firms without having been formally termed and recognized as such (Kuhre, 1997).

            The products those are manufactured through green technology and that caused no environmental hazards are called green products. Promotion of green technology and green products is necessary for conservation of natural resources and sustainable development. The green products can be classification through following measures:

·       Originally grown products;

·       Recycled and reusable;

·       Products without non-toxic chemical;

·       Products that do not harm or pollute the environment;

·       Products that have eco-friendly packaging (Mishra et al, 2010).

            The green awareness began in between of the 1960s and early 1970s with increasing concern about the negative impact of consumption pattern, impact of economic and population growth on the environment (Cohen, 2001). 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. The concept of green marketing is the business practice that considers consumers concerns with regards to preservation and conservation of the natural environment (Coddington, 1993).

            Green marketing practices generally promoted as the genuine concern for the nature of inputs as well as outputs waste reduction and the impact of these upon the environment and society as a whole both in present and future conditions (Walker and Hanson, 1998). It is difficult to find an industry that does not harm the environment 100%. But there are some products that can be called "environment friendly", if these products aim at limiting the environmental negative effects (Hindleetal, Pujari & Wright, 1993, 1996).

            Gura˘u and Ranchhod (2005) compared between six British companies and six Romanian companies with regard to presentation of environment friendly products. They found that the Romanian companies concentrate in presenting their products on asking for help of foreign mediators, in the contrast British companies which their trademarks and concentrate on distribution of their products. This study is concentrated on four green marketing elements (product, pricing, distribution and promotion).

            A study by Teisl, Roe and Hick (2002) provided market-based evidence that consumers can respond positively to eco-labels and consequently contributed to the increased market share of the product concerned.

Figure 1: Green Consumer Values Factors

Source: Concerns about Green Marketing

            Figure 1 defines the green consumer values which are integrated with the combined approaches of symbol and status, health and safety, convenience and efficiency and cost. These values are most important in the marketing perspective as the consumer or the industry as the brand of any product will mark the symbol and the status of an individual or the organization. So, it becomes very important to segment the different organization and consumers in terms of the different value that they possess.

3.       RESULTS

3.1.          Segmentation in Green Marketing

            It has been identified that the segmentation for companies and for consumers.  According to Ginsberg and Bloom (2004), companies can be classified on the basis of utilization of these elements companies can classify in four categories:

a)     Lean Green - These companies adopt the green practices but they do not focus to publicize these initiatives. They implement the environment friendly practices just for the cost reduction & improve the efficiency.

b)    Defensive Green - This kind of marketer use green marketing as a precaution to avoid the crisis situation or to counter the competition. They use green marketing to create the positive brand image. Environment initiatives may be sincere but temporary just to differentiate from the competitors.

c)     Shaded Green - The companies those adopt shaded green strategy invest in long-term, environmentally friendly processes that require a significant financial and nonfinancial dedication. They differentiate their product on the basis of greenness.

d)    Extreme Green - Extreme green adopt green marketing mix in the holistic manner. They integrate environmental concern in overall marketing strategy. The greenness is the main driving force for the companies. Concept of life cycle assessment, total environmental quality management, waste reduction, and environment friendly promotion deeply embedded in the company philosophy.  They serve the niche segment of the market.

            According to a study by Roper (2002), 58% of U.S. consumers try to save electricity at home, 46% recycle newspapers, 45% return bottles or cans and 23% buy products made from, or packaged in, recycled materials. So it is clear that some consumers already demonstrate sporadic green sentiments in their habits and purchasing behavior. Understanding the target consumer will help marketers to know whether "greenness" is an appropriate selling attribute and how it should be incorporated into the marketing mix. To respond to consumers' varying degrees of environmental concern, marketers can segment the market into different shades of green. The Roper survey divides consumers into the following groups:

a)     True Blue Greens (9%): True Blues have strong environmental values and take it upon themselves to try to effect positive change. They are over four times more likely to avoid products made by companies that are not environmentally conscious.

b)    Greenback Greens (6%): Greenbacks differ from True Blues in that they do not take the time to be politically active. But they are more willing than the average consumer to purchase environmentally friendly products.

c)     Sprouts (31%): Sprouts believe in environmental causes in theory but not in practice. Sprouts will rarely buy a green product if it means spending more, but they are capable of going either way and can be persuaded to buy green if appealed to appropriately.

d)    Grousers (19%): Grousers tend to be uneducated about environmental issues and cynical about their ability to effect change. They believe that green products cost too much and do not perform as well as the competition.

e)     Basic Browns (33%): Basic Browns are caught up with day-to- day concerns and do not are about environmental and social issues. (Roper, 2002)

            According to Al-Bakry (2007), the elements identified of the green marketing mix are: 

a)     The green products: Green products are products that respond to environment needs and requirements. As the customer's needs are necessary to improve and develop products, the customer needs in an environment safer and healthier are also important and should be considered.

b)    The green pricing: The green pricing refers to the price specified in the light of company's policies with regard to environmental consideration imposed by rules and company instructions or its initiatives in this regard.

c)     The green distribution: This is related to distribution gates use that deal with green products, which are appropriate for consumers, in terms of facilitating their delivery, and to secure cycling procedures conducting within environmental conditions and requirements.

d)    The green promotion: This refers to providing real information about the products in a way that does not hurt the materialistic and moral consumers' interests. Therefore, it has been analyzed that Green Marketing takes a special effort and a different approach as how to Appeal to Green Consumers. Since 1989, Jacquelyn Ottman, a green marketing pioneer, adviser to the Fortune 500 and acknowledged guru of all things green, has been tracking the transition of the green consumer from fringe to now mainstream. In her new book, which is sure to become the go-to resource guide on the topic, Ottman (2008), reveals what it takes to succeed in this new green marketplace, providing insight into the specific needs of today’s mainstream consumers, and how companies large and small have responded with fresh green marketing strategies.

3.2.          Green Marketing rules:

a)     Know your customer: If you want to sell a greener product to consumers, you first need to make sure that the consumer is aware of and concerned about the issues that your product attempts to address. Whirlpool is the only company even after winning a $30 million "golden Carrot" prize for being first to market with chlorofluorocarbons (CFC) -free fridge, they discovered that consumers wouldn't pay the premium because they didn't know what CFCs were - and there were no other value-added benefits.

b)    Empower consumers: Make sure that consumers feel, by themselves or in concert with all the other users of your product, that they can make a difference. This is called "empowerment" and it's the main reason why consumers buy greener products. This powerful principle underlies so many campaigns laden with tips.

c)     Transparent: Consumers must believe in the legitimacy of your product and the specific claims you are making. Caution: There's a lot of skepticism out there that is fueled by the raft of spurious claims made in the "go-go" era of green marketing that occurred during the late 80s-early90s - one brand of household cleaner claimed to have been "environmentally friendly since 1884"

d)    Reassure the buyer: Consumers need to believe that your product performs the job it's supposed to do. They won't forego product quality in the name of the environment. (Besides, products that don't work well will likely wind up in the trash bin, and that's not very kind to the environment).

e)     Consider your pricing: If you're charging more for your product - and many environmentally preferable products cost more due to economies of scale and use of higher-quality ingredients - make sure that consumers can afford the premium and feel it's worth it. Many consumers, of course, cannot afford premiums for any type of product these days, much less greener ones, so keep this in mind as you develop your target audience and product specifications (Ottman, 2008).

3.3.          Green Brands and Companies across India

            The global green brands study which reveals current consumers’ attitudes and perceptions towards green issues. According to the 2011 Green Brands survey, findings emphasize that brands must not only develop environmental strategies to address their environmental impact, but they must also connect with consumers in a compelling and relevant way on a market-by-market basis. Today, being only eco-friendly is not enough—brands should be both green and consumer-friendly, and only this can help them win big. Amul, Dabur, Infosys, Taj Hotels, Britannia, Suzlon, Hindustan Uniliver, Wipro, Maruti, Godrej Consumer Products are the top Green Brands and Companies in India.

 

Table 1: Top 10 Green Companies in India

Green

Companies

Green Initiatives

Suzlon Energy

The world’s fourth largest wind-turbine maker is among the greenest and best Indian companies in India. Tulsi Tanti, the visionary behind Suzlon, convinced the world that wind is the energy of the future and built his factory in Pondicherry to run entirely on wind power. Suzlon’s corporate building is the most energy-efficient building ever built in India.

ITC

Limited

ITC strengthened their commitment to green technologies by introducing ‘ozone-treated elemental chlorine free’ bleaching technology for the first time in India. The result is an entire new range of top green products and solutions: the environmentally friendly multi-purpose paper that is less polluting than its traditional counterpart.

Tata

Metaliks

Limited

(TML)

Every day is Environment Day at TML, one of the top green firms in India. A practical example that made everyone sit up and take notice is the company’s policy to discourage working on Saturdays at the corporate office. Lights are also switched off during the day with the entire office depending on sunlight.

Tamil Nadu Newsprint and Papers Limited (TNPL)

Adjudged the best performer in the 2009-2010 Green Business Survey, TNPL was awarded the Green Business Leadership Award in the Pulp and Paper Sector.

Wipro Technologies

Wipro which climbed to the top five brand league in Greenpeace's 'Guide to Greener Electronics' ranking. Despite the global financial crisis, Wipro held fast to its commitment towards energy efficiency and was lauded for launching energy star compliant products in the market.

HCL Technologies

- This IT major may be considered as the icon of Indian green initiatives, thanks to the “go green” steps taken in solving the problem of toxics and e-waste in the electronics industry. HCL is committed to phasing out the hazardous vinyl plastic and Brominated Flame Retardants from its products and has called for a Restriction on Hazardous Substances (RoHS) legislation in India.

Oil and Natural Gas Company (ONGC)

- India’s largest oil producer, ONGC, is all set to lead the list of top 10 green Indian companies with energy-efficient, green crematoriums that will soon replace the traditional wooden pyre across the country. ONGC’s Mokshada Green Cremation initiative will save 60 to 70% of wood and a fourth of the burning time per cremation.

IndusInd Bank

Green banking has been catching up as among the top Indian green initiatives ever since IndusInd opened the country’s first solar-powered ATM and pioneered an eco-savvy change in the Indian banking sector. The bank is planning for more such initiatives in addressing the challenges of climate change.

IDEA Cellular

One of the best Indian companies, IDEA, paints India green with its national ‘Use Mobile, Save Paper’ campaign. The company had organized Green Pledge campaigns at Indian cities where thousands came forward and pledged to save paper and trees. IDEA has also set up bus shelters with potted plants and tendril climbers to convey the green message.

Hero Honda Motors

Hero Honda is one of the largest two-wheeler manufacturers in India and an equally responsible top green firm in India. The company’s philosophy of continuous innovation in green products and solutions has played a key role in striking the right balance between business, mankind and nature.

 

           

 

 

 

 

 

 

 

 

 

            Table 2: There are some more interesting cases related to Green Marketing in India:

India's First

Eco-Friendly Green Stadium

 

Thyagaraj Stadium, constructed for the Commonwealth Games in New Delhi has been tagged as India’s first ever energy-efficient stadium. This majestic structure stands in the heart of the very quiet residential colony behind the famous INA market of Delhi. It has been built using the latest green building technology and energy-efficient construction material such as fly-ash bricks.

India’s First Green Railway station

 

Railways have inaugurated India's first green station at Manwal on the Jammu-Udhampur rail route. With the tiny station facing frequent power cuts, it has been a provided a supply of solar power. The lighting and fans are working on solar power. The state electric supply is a standby source, which can be used in case of any failure of solar system.

Eco-friendly

Buildings

 

The Indian Green Building Council (IGBC), one of the only two organizations that certify buildings on green quotient defines it as “one which uses less water, optimizes energy efficiency, conserves natural resources, generates less waste and provides healthier spaces for occupants, as compared to a conventional building.”  The Green Rating for Integrated Habitat Assessment (GRIHA) of The Energy and Resource Institute (TERI), the second of the two organizations, that gives green certification has certified seven buildings in Gurgaon.

Indian

Oil's Green Agenda

 

As an active partner of the Global Compact Programme of the United Nations, Indian Oil is fully Focused on “sustainable development.” As a dominant player, the Corporation recognizes protection of environment as a core commitment of its business. As part of this commitment, all operating units and installations of Indian Oil have a comprehensive safety, health & environment management system in place. The facilities are periodically reviewed and upgraded from time to time for better performance.

Green Fuel

alternatives

 

In the country's pursuit of alternative sources of energy, Indian Oil is focusing on CNG (compressed natural gas), Auto gas (LPG), ethanol blended petrol, bio-diesel, and Hydrogen energy.

Agartala

To be Northeast

India’s First

Solar city

 

Tripura has planned to make all public and private vehicles in Agartala run on compressed natural gas (CNG) by 2013, thus making the capital "India's first green city". Tripura Natural Gas Co (TNGCL) — a joint venture of the Gas Authority of India Ltd (GAIL) and the Tripura and Assam governments—has undertaken a project to supply CNG to all private and government vehicles. CNG will also be available to those now using electricity, petrol and diesel to run various machineries.

Green

rickshaws

 

Power distribution company BYPL has agreed to set up ports for charging eco-friendly rickshaws that will be powered by batteries and will soon be introduced in East and Central Delhi.  The company signed an agreement with the HBL Soleckshaw Pedi Cab, makers of the ecofriendly-rickshaws, offering to set up infrastructure that will be needed for charging the batteries of these rickshaws. According to a BYPL spokesperson, the Pedi Cabs can play at the maximum speed of 30 km per hour, are run on battery, do not emit any smoke or cause noise pollution. These rickshaws have been designed and promoted by Council of Scientific and Industrial Research (CSIR) through one of its national research and development laboratory, the Central Mechanical Engineering Research Institute (CMERI).

4.       CONCLUSIONS

            Green Marketers needs to promote “added value” as green products have begun to rival their “brown” counterparts in quality and ubiquity, savvy marketers have moved beyond targeting “deep green” consumers with a “save the planet” pitch.

            Today’s newly mainstream consumers by promoting the added value their products provide: better health, superior performance, good taste, cost- effectiveness—and even status (Menone, 2011).

The present study opens a lot of scope for future research in the area of green marketing as to how much practice of the concept of ‘green’ is in Indian companies and whether is it incorporating in their corporate social responsibility programs.

The study of consumers’ perception towards such practices would also be enlightening. Good reliability and validity are achieved, but with their limitations, especially in the case of the emotional dimension (Hartmann et al, 2005).

The structured strategy of green marketing can be seen as a solution to the present economy as well as to future growth (Ioannis et al).

This paper would give broad idea in the field of green marketing to the consumers as well as the industry to improve their marketing strategies and also reduce the cost for the effective marketing. It would also develop an effective environmentally friendly approach for the marketing of their products and services through green marketing channel and value-added services.

Through green marketing the organizations can improve the production cycle by implementing the green supply chain management for effective end to end consumer and supplier management. 

To develop a green branding concept in the process of supply chain for effective product utilization, recycle, renewable products category to help the environment to utilize the natural resources to the fullest through green marketing. This study opens the scope of research how companies can create competitive edge through the effective use of the green marketing concepts.

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