Analysis of Green Marketing

Green marketing is in the focus of present marketing strategy due to the pressure that comes from inclined environmental awareness in the global climate change. Different initiatives have been considered to support environmental programme and practices. This study as a whole tries to understand the penetration level of the green marketing initiatives by companies, the customer acceptance of these initiatives as compared to past data, and understand the various factors responsible for such perceptions. A sample of 54 was used to find the acceptance level, and awareness of the green marketing initiatives as compared to the time of inception of such initiatives. Also various statistical tools were utilised with the help of the aforementioned data sample to pinpoint the factors responsible for such change in the acceptance and awareness phenomenon.

1. INTRODUCTION

1.1 About the Research

The study aims to understand the penetration level of the various green marketing initiatives of the various companies and tries it to understand the acceptance and awareness of such ventures. Using data accrued form 54 respondents who are possible targets of such initiatives the main hypothesis of the awareness of the green marketing initiatives was tested. further research was done to understand the variable that were responsible for any more future trends and changes in the green industry and what have happened u till now .The research has found that there is indeed a high acceptance level which has been shown using the chi square test statistic to prove the hypothesis and also factors have been indentified that contribute to the overall phenomenon.

1.2 Genesis of the problem

Being a student of marketing it has always caught my imagination the various attempts of marketers to address consumer needs utilising whatever opportunity that arises in front of them. One such opportunity is the rising trend of the consumer acceptance to pay premium for green marketed products which was evident to me form the research study done by Daniel W. Elfenbein and BrianMcManus  Washington University, Saint Louis – John M. Olin School of Business and University of North Carolina (UNC) at Chapel Hill which was titled as A Greater Price for a Greater Good? Evidence that Consumers Pay More for Charity-Linked Products 

An in-depth review of this literature proved that there is indeed a rising trend in the consumer acceptance of companies green marketing initiatives. This raised my determination to take up a research with motive to understand any such trend in the Indian affluent market and consumers.

1.3 Major concepts

Before, delving straight into the research work, it would be better to know some of the concepts that would be taken up in the later part of this work, the understanding of which is necessary for the user to understand the research more clearly. These are discussed below:

Green marketing: – 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,

• Modifying advertising.

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

Conventional marketing involves selling products that satisfy consumer needs at

affordable prices. Green marketing must also satisfy customer needs at affordable prices, but green marketing has the additional challenge of defining what are green and developing and selling products those consumers will like. Green products balance environmental compatibility with performance, affordability, and convenience. They are typically durable, non-toxic, recyclable, and are often made from recycled materials.

Green products have minimal packaging, and should carry low environmental impact. Green product is a descriptive idiom to distinguish a product that has been designed to have minimal impact on the environment.

Green marketing not only focuses on advertisements and promotion of products with environmental characteristics, but it pervades all the activities of designing, production, packaging and promoting greener products. Green marketing thrives on the underlying philosophy ‘Reduce, Reuse and Recycle.

Unlike the conventional marketing green marketing not only ensures the interests of the manufacturers and consumers but it also ensures environmental friendliness by including the activities related with the protection of natural environment. Thus green marketing should look at minimizing environmental harm, not necessarily eliminating it.

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Need

On our planet sources are limited and human needs (wants) unlimited. Recyclable or renewable goods are needed to fulfil the unlimited needs of a costumer. As industries are having limited resources, they have to search for new and alternative ways to satisfy the consumer needs (wants). Thus green marketing is important for the firms to utilize the

limited resources satisfying the consumer needs as well as achieving the organization’s selling objectives.

Few reasons why firms are adopting Green Marketing:

1. Social responsibility: Organizations believe that to keep the environment clean is there moral as well as social responsibility.

2. Laws: Laws imposed by various authorities.

3. Competition: Competitor’s environmental activities pressure firms to go for green marketing.

4. Cost Reduction: Reduction in cost due to recycling and material usage forces firms to look for green marketing.

The Green Consumer

The green consumers are the driving forces behind the green marketing process. It is they who drive consumer demand, which in turn encourages improvements in the environmental performance of many products and companies. Thus, for a marketer it is important to identify the types of green consumers. Many organizations have found that two out of every three consumer is green in developed country but country like India and its organization has found that one out of every six consumer is green, but their environmental commitments vary because of their different standards, expectation from producers, demand and buying power. It is thus not efficient to say that the green consumer is one who engages in green consumption, specifically, consumes in a more sustainable and socially responsible way. A consumer acquires bundle of wants and needs and this is also true for the green consumer. To satisfy those needs businesses have to break down the market into different groups of consumers that differ in their responses to the firm’s marketing mix program. The segments arrived at should preferably have the following features:

1) Measurable 2) Sizeable 3) Accessible 4) Actionable 5) Competitive intensity 6 ) Growth potential A great deal of market research has been concerned with identifying the green consumer. A clear picture has not yet been established and it differs a lot between markets. But some generalizations about the green consumer can be made on the basis of the research done so far. The green consumer:

Is inconsistent

Is confused

Is generally a woman

Are adults who are likely to be more concerned about the environment

Is sophisticated in wants and need

Green Product

Green product stresses the straight and tangible benefits provided by greener design, such as energy efficiency or recycled content, rather than stressing the environmental attributes them. Reducing the environmental impact of a product improves the product’s overall performance and quality in ways that are important, not just the most dedicated and loyal green consumer, but to all consumers. For example, CNG (Converted Natural Gas) use in the vehicles, super-concentrated laundry detergents not only save energy and packaging, they save end space, money and effort. Organically grown food not only better preserves soil and reduces the amount of toxins in the water supply; they have superior taste and health benefits compared to their counterparts. Therefore green product means any product, which is not hazardous for environment and customer as well, and it also work as a future remedy of negative impact of a product.

Customer Realization Indicators on Green Products

Green product realization by green customer is based on some indicator while they are in buying point. Here the researcher fined some common indicator, which indicates that the particular customer is green.

1. Responsible and careful: when green customer in purchasing point, they always responsible and careful towards environment, hazardous or uncertain future. These customers group introduced as “deep greens”.

2. Powerful consumers: Green Consumers always demands multiple option or alternative products so that they can buy green product, as they like best. For example, CNG and four-stroke vehicle is the almost alternative product and green consumers always intend to get several option.

3. Widespread recycling: Green consumer always thinks for further recycling. For example Paper bags recycled again and again.

4. Consciousness for Recycling: Interest on the recycling benefits is high because consumers can link it to real benefits.

5. Interest in greener products: Realization based on availability of greener products. In India, eco-tourism was very unknown word for local tourist but few eco-park establishment in coastal belt and hilly area had changed the scenario and people start liking this kind of things due to green.

6. Health and Quality Perceptions: Consumers have considered products made from recycled content to be inferior, even unclean. Green consumers always make sure that they are safe and secure in the context of health and quality as well.

7. Reliability: Green consumer wants to make sure that the product, which is green, is a reliable in all aspects. They always search for statistics of green product so that they can judge their beliefs.

Realization problem of Green Product

Still green marketing is a growing realization and concept in customer mind for product and service users. Though green marketing seems to be a popular, well-liked and important term, it has not been very successful in practice by the customer in India either attracting customers or in helping the environment. Some realization problems were found through interviewing with sample respondents and also some problems are adjusted through reviewing secondary materials like foreign journals and other literatures. These are follows: –

A. Consumer Association in India is not playing vital role for building consumer consciousness concerning green product and green consumers.

B. Consumers are relying on industry and government too much. They think, they do not have to do anything; it is someone else’s problem and someone will solve the problem specially Government.

C. Green marketing has been only implemented within the public relation department giving little room for product improvement or enhancement and real environmental benefits.

D. Green Marketing activities with modest or no attempt being made in product development in the context of green product. Greening sometimes led to a decrease in costs. Whilst some products became cheaper, they were sold at best to provide the company with extra profit. In recent time all environment friendly ordinance passed by the national assembly but its implication program is going very slowest way, which cannot help the product to be green and people to be green consumer as well.

E. It is not clear to the general people that what kinds of benefits are involving in environmental friendly products. Neither customers nor producing organization clearly state environmental benefits.

F. Polluting manufacturing e.g. all chemicals, dying, petroleum and other waste outing organizations tried to respond to the misconceptions or fallacy or misleading notions presented by the media and pressure groups by presenting their own version of “facts” through public relation or promotional departments. The government authority and the related authority have taken extremely modest promotional activities

G. The similar products were produced, but some “new” environmental benefits were added in their promotion to take advantage of the increasing interest customers showed in the environment.

H. There has little practice of “Enviropreneur” marketing that refers environmentally committed person, segment or company that seeks to bring to market innovative new green products.

I. There has no legal authority that can make sure comparative differences of no-environment friendly products and environmental products.

J. There is no set of standard environmental characteristics, which can be harmful for the customers or end users.

A survey constituted through field survey within 100 sample respondents for finding out how conscious a consumer regarding green marketing and how they actually measure a green product. Results appear that consumers are not excessively committed to improving their environment and may be looking to place too much responsibility on industry and government. Ultimately green marketing requires that consumers want a cleaner environment and are willing to “pay” for it, possibly through higher priced goods, modified individual lifestyles, or even governmental intervention. Until this occurs it will be difficult for firms alone to lead the green marketing revolution. Most of the people (32%) believe that green product is for minimizing cost, 23% believes that it is for relative economical rather other competitive products like a minimum cost. And rest of the respondents divided into different opinion like it is a alternative, convenience and environment friendly product. But all in all there is (50%) acceptance level at the inception point of the green marketing initiatives.

1.4 Need for the Study

The following points indicate the need of the study:

This study pinpoints towards a new angle which effectively measures the depth of awareness of the green initiatives taken by companies. Though studies regarding the customer realisation have been earlier attempted. They have been qualitative in nature. This attempt at a survey of the possible customer regarding the awareness and acceptance level of green marketing initiatives paves way for further causal studies and also realises the truth of the belief that there is a growing trend in companies and also customer lean towards ecologically sustainable business models and practices.

This study also aims to theoretically explain why companies want to reduce their carbon foot print and how are they doing it by live examples.

This study helps to identify the various factors and variables quantitatively to hold true to the hypothesis that these variables and factors are responsible for the change in trend as seen when compared to inception of green marketing initiatives.

1.5 Some green marketing ventures

Top 10 Companies that Paint India Green

Judging by the number of large, small and mid-size Indian companies that are setting the trend with green initiatives, India is serious about building environmental sustainability into her business practices. The following companies who made it to the list of top 10 green Indian companies prove the statistics right!

Suzlon Energy

Suzlon One Earth Global Headquarters in Pune – India’s greenest building

SuzlonEnergy

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 Papekraft’s premium range of eco-friendly business paper

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.

Tata Metaliks Limited (TML)

“Everybody is motivated to do something about reducing carbon footprints”, says Harsh Jha, Managing Director – TML

 

 

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. The initiatives undertaken by this top green firm in India includes two Clean Development Mechanism projects and a wind farm project that helped generate 2,30,323 Carbon Emission Reductions earning Rs. 17.40 Crore.

Tamil Nadu Newsprint and Papers Limited (TNPL)

Aerial view of TNPL

Wipro Technologies

The list of top 10 green Indian companies is never complete without Wipro which climbed to the top five brand league in Green peace’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.

Wipro Technologies

Wipro broadens its green IT initiative

Through its participation in “The Green Grid”

Oil and Natural Gas Company (ONGC)

ONGC’s green projects contribute to increased environmental awareness among local communities

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

IndusInd’s solar-powered ATM expects to save around 1,980 Kw of energy annually

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.

 

 IDEA Cellular

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.

Hero Honda Motors

Hero Honda Green Ambassadors: winners of the international inter-school environment quiz competition

2. REVIEW OF LITERATURE

2.1 Importance of review of related literature

Literature review has a very special role in forming the research scope and research history which is related to the topic chosen for research. Research is made in order to inform people with new knowledge or discovery. However, it is not to be expected that everybody would willingly believe what we are tackling in our whole research paper. Thus, what we can do to make our research more credible will be to support them with other works which have spoken about the same topic that we have for our research. This is where literature review comes in. This is why literature review involves scanning the pages of any published literature like books, newspaper, magazine, website, webpage, collection, research paper – where we may be able to find any reference to the same topic that we are researching on. There are many reasons why literature review is rendered as a significant part of any research or dissertation paper. Literature review is the part of the paper where the researcher will be given the opportunity to strengthen our paper for we will be citing what other reliable authors have said about our topic. This will prove that we are not just writing about any random subject but that many others have also poured their thoughts on the topic.

2.2 How Literature Review was done?

Firstly, the literature sources to be reviewed were selected. Research Papers (from various research databases such as SSRN, EBSCO, JSTOR etc.), Published papers in various journal of finance of various nations (such as American Journal of Finance, Indian Journal of Finance etc.), Academic papers published in various premier research institutes both within the nation and outside it, books, newspapers, magazines and websites – were taken as the sources for literature review. Book included were also included.

2.3 Literature review main(books and articles)

Cateora Graham, in International Marketing, has drawn a parallel line between green marketing and product development. The author has cited a variety of examples where the importance of green marketing has been laid focus on. Green marketing is a term used to identify concern with the environmental consequences of a variety of marketing activities. It very evident from the author’s research and examples the packaging and solid waste rules are burdensome but there are successful cases of not only meeting local standards but also being able to transfer this approach to other markets. [2]

Philip Kotler and Kevin Lane Keller in Marketing Management has initiated the topic by discussing about the relevance of green marketing in the past few decades and has also discussed the explosion of environmentally friendly products. However, according to the author from the branding perspective green marketing programs have not been very successful. Marketers tried and failed with green sales pitches over the last decade because of certain obstacles which the movement encountered. The consumer behaviour is such that most consumers appear unwillingly to give up the benefits of other alternatives to choose green products.

Along with definitions from different sources, the authors Debraj Dutta and Mahua Dutta, of Marketing Management, have given an explanation of what is green marketing. According to the authors green marketing incorporates a broad range of activities including the modification of product, production process and packaging. The authors have also discussed a few literature sources that have focused on green marketing and its relevance in today’s era. It was evident that the possible reasons because of which organizations engage in green marketing.

K.K.Shrivastava & Sujata Khandai, the author of Consumer Behaviour in Indian Context, has discussed green marketing legislation in association with the multinational corporations. These face a growing variety of legislation designed to address environmental issues. Global concern for the environment extends beyond industrial pollution, hazardous waste disposal and rampant deforestation to include issues that focus directly on consumer products.

Kenneth E. Clow & Donald Baack the authors of Integrated Advertising, Promotion and Marketing Communication. According to the authors the marketers need to be aware of the threats and opportunities associate with four trends in the natural environment namely shortage of raw materials, increased cost of energy, increased pollution levels and the changing roles of government. New regulations hit certain industries very hard and also that consumers often appear conflicted about the natural environment.

Jacquelyn A. Ottman the author of Green Marketing: Opportunity for Innovation, has explained green marketing from an organizational standpoint, environmental considerations should be integrated into all aspects of marketing new product development and communications and all points in between. According to the author environment should be balanced with primary customer needs. The so-called “green consumer” movements in the U.S. and other countries have struggled to reach critical mass and to remain in the forefront of shoppers’ minds. The lack of consensus by consumers, marketers, activists, regulators, and influential people has slowed the growth of green products.

According to the American Marketing Association (Wikipedia), 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. It could be concluded that 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. As we know that the emerging greenhouse gas reduction market can potentially catalyze projects with important local environmental, economic, and quality-of-life benefits. The Kyoto Protocol’s Clean Development Mechanism (CDM), for example, enables trading between industrial and developing nations, providing a framework that can result in capital flows to environmentally beneficial development activities.

Prof. Sanjit Kumar Dash author of Green Marketing: Opportunities & Challenges has mentioned that all activities designed to generate and facilitate any exchange intended to satisfy human needs or wants such that satisfying of these needs and wants occur with minimal detrimental input on the national environment. The evolution of green marketing involves (three phases) from this article. First phase was termed as “Ecological” green marketing, and during this period all marketing activities were concerned to help environment problems and provide remedies for environmental problems. Second phase was “Environmental” green marketing and the focus shifted on clean technology that involved designing of innovative new products, which take care of pollution and waste issues. Third phase was “Sustainable” green marketing. It came into prominence in the late 1990s and early 2000.

In the Strategic Marketing and Green Marketing, the Green Imperative is impossible to ignore, and companies are scrambling to understand how to develop business models that are more sustainable. After an objective analysis of all product, process, and policy issues associated with your company as well as performing an assessment of your current marketing strategy, we can develop a comprehensive sustainability and corporate responsibility strategy to increase ROI. The organization will then become more efficient through environmental and social responsibility, achieve superior competitive advantage and brand differentiation, as well as enhance your brand image in the marketplace.

In accordance with the Strategic Marketing – Brand Development and Green marketing the brand image is derived from marketing strategy. We can develop the brand identity and mold the company’s image within the framework of the strategic marketing plan. This strategy and design teams develop the marketing communications materials around maintaining a positive, distinctive, and consistent brand image in the marketplace.

The American Wind Energy Association has associated green marketing with wind energy. Green marketing can improve the environmental profile of the U.S. electricity supply if marketers sell a power product that includes a substantial fraction of wind, geothermal, biomass (including landfill gas) and/or solar resources. The generation of power from these renewable resource technologies produces few or no air emissions, no carbon. They will be most vulnerable in competitive markets and can most benefit from consumer support. While “green” is difficult to define, and arguments can be made that natural gas and large hydropower are less environmentally harmful than coal, oil, and nuclear power, green-customer demand is unlikely to exceed the supply of large, existing quantities of gas and hydro resources.

Anja Schaefer from the The Open University (BBC) has mentioned that green marketing is there in a sizeable market segment of green consumers who are willing to pay a little more for environmentally friendly products from environmentally friendly companies. Producers and retailers will react to this green demand and environmentally friendly practices will be pushed through the supply chain. Green marketing dates back several decades now, with specialist manufacturers and retailers such as Ben and Jerry’s, the Body Shop and so forth, leading the way.

Green Marketing and Social Networks have discussed the problems related to the idea of greening the world through marketing. The article has discussed that organizations are not running charities and their main objective should be to align their own objectives with that of the protection of the environment. And if it is really delivered the environmental goods will deliver positive results for the organization. The programmer already lists quite a few problems with the various environmental targets and actions described by retailers.

David Wigder the writer of Reframing Global Warming across the Political Spectrum provides a different approach towards green marketing from this article. The author says that the green marketers are challenged to efficiently reach consumers and effectively impact their attitudes and behaviors.   Marketing Green’s mission is to provide industry professionals with practical strategic marketing advice on how to build green brands and motivate mass market adoption of more sustainable products. Today, there is a common perception that Democrats are more pro-environment than Republicans.

Green marketing and biotechnology (Wikipedia) has provided a relationship between. Biotechnology is often used to refer to genetic engineering technology of the 21st century however the term encompasses a wider range and history of procedures for modifying biological organisms according to the needs of humanity, going back to the initial modifications of native plants into improved food crops through artificial selection and hybridization. With the development of new approaches and modern techniques, traditional biotechnology industries are also acquiring new horizons enabling them to improve the quality of their products and increase the productivity of their systems. Biotechnology