Transcript Green Marketing

Specialised & Cause Related
Marketing (SCM812S)
UNIT5 GREEN Marketing
SCM812S - Unit 5 - Efigenia Semente PON, Source (Adkins & Peattie,
Kottler, Lee, COLL Guide, Simataa E., Lamb et. al) 2015
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Unit Objectives
Upon completion of this unit you will be able to:
define green marketing
demonstrate the nature and scope of green marketing
distinguish and explain the difference between green
marketing and societal marketing
apply the marketing mix to green marketing
discuss the misconceptions of green marketing
demonstrate an understanding of competition in green
marketing
analyse and assess the importance of green marketing and
why firms are using green marketing
 explain what carbon footprint is
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Introduction
During the late 1980s the term “Green Marketing” became
one of the great business buzzwords, often spoken but
rarely understood. Recently, and in addition to the
economic and legal push factors, there is a strong pull
towards green marketing from the marketplace. Green
marketing can be said to be a style of marketing which has
arisen in response to the increasing concern about the state
of the global environment and the life it contains (including
human life). Many finite resources are being used at rates
that cannot be sustained indefinitely.
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Defining Green Marketing
Green Marketing (also known as environmental marketing and
ecological 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.
Green Marketing is defined as the management process
responsible for identifying, anticipating and satisfying the
requirements of customers and society, in a profitable and
sustainable way (Peattie, 1992, p. 11)
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Scope and Nature of Green
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 things consumers most often associate with
green marketing. While these terms are green marketing claims, in
general green marketing is a much broader concept, one that can
be applied to consumer goods, industrial goods and even services.
For example, around the world there are resorts that are beginning
to promote themselves as "eco-tourist" facilities, i.e., facilities that
"specialise" in experiencing nature or operating in a fashion that
minimises their environmental impact. Thus green marketing
incorporates a broad range of activities, including product
modification, changes to the production process, packaging
changes, as well as modifying advertising.
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Example of a Green Ads.
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Examples…
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Sustainable Marketing
Sustainable marketing is revolves around the
philosophy of creating “sustainable economic
development” which is defined as a development which
meets the needs of the present without compromising
the ability of future generations to meet their own
needs. This is primarily about limiting the throughput
(use) of resources while making the most efficient use
of the resources available in the environment. For
example to ensure sustainable development in Namibia
issues such as water access, education, finance,
markets, biodiversity, deforestation, etc. need to be
addressed.
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Sustainable Marketing Contd’…
Environmental sustainability attempts to maintain or
prolong the physical environment in the face of
development. Essentially though the use of renewable
rather than finite raw materials as well as the
minimization and eventual elimination of polluting
effluents and toxic or hazardous waste. Sustainable
Marketing contributes to the goal of environmental
sustainability by considering environmental issues and
reducing environmental damage by creating, producing
and delivering sustainable solutions while continuing to
satisfy the needs of customers and other stakeholders.
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Cont’d…
Thus, sustainable marketing is a broader management concept
which focuses on addressing the “triple bottom line” (People –
enriching their social capital; Planet –protect and restore the
environment; Prosperity – generating prosperity or wealth for
the organisation and its stakeholders) by creating, producing,
and delivering sustainable solutions with higher net sustainable
value, at a profit whilst continuously satisfying customers and
other stakeholders.
Sustainable Marketing comprises of several dimensions among
others: Green Marketing and the encouraging Socially
Responsible Consumption Practices by consumers
(Societal/social Marketing).
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Societal Marketing Vs Green
Marketing
According to Ken Peattie, green marketing like societal
marketing considers the needs of society as well as those of
consumers. However, Green Marketing differs from the
conventional style of societal marketing in four key ways:
a. It has an open-ended rather than long-term perspective.
b. It focusses more strongly on the natural environment.
c . It treats the environment as something which has an
intrinsic value and above its usefulness to society
d . It focusses on global concerns rather than those of
particular societies.
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Practices that enhance
Societal/Social Marketing
Set behavioural goals;
Base the intervention on prior consumer research
Use theory to guide the strategy
The strategy needs to be insight-driven-getting a deeper
understanding of what moves and motives the consumer
Apply the principles of segmentation and targeting
Use the whole of the marketing mix
Create attractive motivational exchanges with the target
group
Address the opposition to the desired behaviour
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The E4 Marketing Strategy for green and social marketing In E4 Marketing, we use a combination of Content Marketing,
Organic search, Display Adverts & a well planned Social Media
Strategy
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Green Consumer Segments
The green market comprise a number of different segments:
 True Blue Greens (9 per cent): True blues have strong
environmental values and take it upon themselves to try to
effect positive change. They are over four times more likely than
other market segments to avoid products made by firms that are
not environmentally conscious.
 Greenback Greens (6 per cent); Greenback 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.
 Sprouts (31 per cent): 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.
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Cont’d…
Grousers (19 per cent): 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.
Basic Browns (33 per cent): Basic Browns are caught
up with day-to-day concerns and do not care about
environmental and social issues.
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Key Issues Green/Sustainable
Marketing
In order to be successful in green/ sustainable marketing, an
number of issues need to be considered:
 Population (increase) pressure- the ever increasing population is
placing pressure on the available natural resources (directly or
indirectly)
 Production and consumption –population growth leads to
increased level of production and consumption
 Globalization – may contribute to child labour (exploitation) in
outsourced factories
 Global warming and climate change – a quadrupling of carbon
dioxide (CO2) emissions over the last 50 years has raised
concerns about the potential for global warming and climate
change. To avoid irreversible consequences it has been
internationally agreed that two forms of preventive action are
required, namely the reduction of CO2 emissions and a ban on
the use of chlorofluorocarbons (CFCs).
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Cont’d…
 Ozone depletion – CFCs and greenhouse gases deplete the ozone layer
letting through increased levels of harmful ultraviolet radiation (UV rays),
with potentially devastating health effects. The global response began
in1987 with the Montreal Protocol.
 Acid Rain – Air pollution as a result of Sulphur-dioxide (SO2)
 Genetic Engineering – The use of genetically modified organisms (GMOs)
as a means of increasing crop yield has been suggested as an important
contribution to reducing world hunger. Critics point to the potentially
disastrous effects that any mistake would have, if there were unintended
flows of genes and characteristics between species or unforeseen
impacts on the balance of natural systems.
 Loss of Habitats and species diversity - biological diversity is the wealth
of life – plants, animals, micro-organisms and the genes they contain. All
this is maintained by a range of different habitats. Retaining this diversity
is essential for many reasons. It allows us to adapt crops and livestock to
changing conditions and to retain the yet unknown medical applications
for many plant-based compounds.
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Cont’d..
Political and Legal interest – the quality and
complexity of social and environmental legislation
faced by firms continues to grow. It is expected that
companies and governments alike enforce the right
to safe and healthy environment, while protecting a
justifiable economic and social development through
legislation and sustainable practices.
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Corporate Social Responsibility and
the move towards sustainability
Corporate social Responsibility (CSR) is the actions of the
firm to act in a socially responsible manner to protect and
enhance the various stakeholders that have an interest in
the firm, the community in which it operates, the
environment that surrounds it and society. Although CSR is
perceived as comprising altruistic (or charitable) actions by
the firm without any expectation of an immediate financial
return, sustainability/green practices should often be at the
core of the firm’s business model/operations. For example,
General Motors managed to reduce their costs by over N$12
million annually entering into a reusable container program
with its suppliers.
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Stages in the move towards
sustainable/Green Excellence
Sustainable
excellence
policy
Single
sustainable
product
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Sustainable
product
range
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Sustainable
production
Green Marketing Misconceptions
Like most new concepts, green marketing has been the subject
of a number of doubts and misconceptions which have helped to
confuse both marketers and consumers Peattie, K. (1992).
You have to be green to practice green marketing. It has been
suggested that to be a green marketer, you must be personally
committed to environmentalism. This is not true. A marketer’s
responsibility is to meet the needs of his or her customers. If
customers demand greener products and services, marketers
should provide them.
Green marketing is a fad which will soon go out of fashion.
Environmental and social problems will not go away.
Environmental concerns are unlikely to “go out of fashion”,
and they are rapidly becoming an integral part of the way
companies conduct their
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Cont’d…
 You cannot claim to be green unless your products are totally
sustainable. Companies and their products are relatively green, in the
same way that they are relatively expensive or relatively highperformance.
 Improving environmental performance is always expensive. Going
green always often involves investment and expense, but it can also
produce savings from reducing waste, using energy and raw material
efficiently and utilising by-products
 Greening is for larger companies. Large companies are more usually
cast as the environmental villains, but green issues are still very
relevant to the small company
 Green issues affect manufacturers but not service companies. The
idea that service businesses are: smoke-free” and that the
 Green marketing is only of interest in developing countries, and
during an economic upswing. Concern for the environment is not
relevant to countries struggling to develop, and quickly evaporates in
developed countries during recessions.
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The Green Marketing Mix
A model green marketing mix like conventional
marketing contains four "P's" being product, price,
promotion and place. Additional social marketing Ps
that are also used being publics, partnerships, policy
and purse strings (Kotler & Lee, 2005):
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Cont’d…
Product
A business should offer ecological products which not only
must not contaminate the environment but should protect it
and even liquidate existing environmental damages.
Price
Prices for such products may be a little higher than
conventional alternatives. But target groups are willing to
pay extra for green products.
Place
A distribution logistics is of crucial importance; main focus is
on ecological packaging. Marketing local and seasonal
products e.g. vegetables from regional farms are more easy
to be marketed as green than imported products.
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Cont’d…
Promotion
Communication with the market should put stress on environmental
aspects, for example that the company possesses a CP(certificate policy)
or is ISO 14000 certified. This may be publicised to improve a firm’s image.
Furthermore, the fact that a company spends expenditures on
environmental protection should be advertised. Third, sponsoring the
natural environment is also very important. And last but not least,
ecological products will probably require special sales promotions.
Publics
Effective Social Marketing knows its audience, and can appeal to multiple
groups of people. Public is the external and internal groups involved in
the program. External publics include the target audience, secondary
audiences, policymakers, and gatekeepers, while the internal publics are
those who are involved in some way with either approval or
implementation of the program.
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Cont’d…
Partnership
Most social change issues, including "green" initiatives, are too
complex for one person or group to handle. Associating with
other groups and initiatives to team up strengthens the chance
of efficacy.
Policy
Social marketing programs can do well in motivating individual
behaviour change, but that is difficult to sustain unless the
environment they're in supports that change for the long run.
Often, policy change is needed, and media advocacy programs
can be an effective complement to a social marketing program.
Purse Strings
How much will this strategic effort cost? Who is funding the
effort?
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Competition in Green Marketing
Competition which is a defining characteristic of
business, also has resonance for green marketers.
Competitive analysis can help marketers think more
effectively about their clients’ needs. In many cases
firms observe competitors promoting their
environmental behaviours and attempt to emulate this
behaviour. In some instances this competitive pressure
can cause an entire industry to modify and thus reduce
its detrimental environmental behaviour.
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Why is Green/Sustainable Marketing
Important?
According to Polosky, the question of why green marketing has
increased in importance is quite simple and relies on the basic
definition of Economics. "Economics is the study of how people use
their limited resources to try to satisfy unlimited wants."
Thus mankind has limited resources on the earth, with which she/he
must attempt to provide for the worlds' unlimited wants. In market
societies where there is "freedom of choice", it has generally been
accepted that individuals and organisations 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/sustainable marketing looks at
how marketing activities utilise these limited resources, while
satisfying consumers wants, both of individuals and industry, as well
as achieving the selling organisation's objectives.
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The Role of Marketing in Green or
Sustainability Practices
As with the marketing of any product (or idea), the precise role
of marketing in responding to the sustainability issues will vary
among firms. For example, it is relatively easy to market energy
efficiency (fluorescent) bulbs because their higher price
(compared to conventional bulbs) is offset by lower electricity
costs. Compare this to the marketing of a Toyota Prius (a full
hybrid electric mid-sized hatchback car), where the running
costs of this environmentally friendly vehicle will never be able
to offset the initial purchase costs.
In markets characterised by green pressure from customers,
marketers may lead the move towards more sustainable/green
products, services and strategies. In essence, the marketing of
sustainable/green products should resonate with the values of
the target market.
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Why are Firms using Green
Marketing?
When looking through the literature there are several suggested
reasons for firms increased use of green marketing. Five possible
reasons cited are (Peattie, 1992):
Organisations perceive environmental marketing to be an
opportunity that can be used to achieve its objectives;
 Organisations 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; and
Cost factors associated with waste disposal, or reductions in
material usage forces firms to modify their behaviour.
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Examples of Green Marketing
Practices in different Industries
Hotel
Restaurants
Education
Manufacturing
*Greener
building/
construction
materials, i.e.
easy degradable
materials
*Natural lighting
Recycling food;
Fruits,
Plastic,
Solar heaters
Paperless
offices,
Solar energy;
power saving
computers/print
ers/monitors
Greener
manufacturing
processes and
materials,
reduction of CO2
emissions,
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Carbon Foot-printing
When you drive a car, the engine burns fuel which creates a certain amount
of Carbon dioxide (CO2), depending on its fuel consumption and the driving
distance. When you heat your house with oil, gas or coal, then you also
generate CO2. Even if you heat your house with electricity, the generation
of the electrical power may also have emitted a certain amount of CO2.
When you buy food and goods, the production of the food and goods also
emitted some quantities of CO2. Carbon footprint describes the
environmental impact of carbon emissions by a particular individual or
organisation's lifestyle or operation, measured in units of carbon dioxide.
Carbon footprint is therefore a measure of the amount of carbon dioxide
is released into the atmosphere (greenhouse gases) by a business, society,
or individual through day-to-day activities over a given period. Greenhouse
gases (GHGs) can be emitted through transport, land clearance, and the
production and consumption of food, fuels, manufactured goods,
materials, wood, roads, buildings, and services.
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A carbon footprint is composed of two parts, a primary (direct) and secondary
(indirect) footprint.
The primary footprint is the sum of the direct carbon dioxide emissions of
burning of fossil fuels, like domestic energy consumption by
furnaces/stoves/ovens/heaters and waters heaters, and transportation, like
automobiles and airplane travel.
The secondary footprint is the sum of indirect emissions associated with the
manufacturing and product breakdown structures production (e.g. motorcycle
product breakdown = engine, frame, suspension , transmission, handlebar,
wheels, head , seats, brakes, battery, headlights, shocks, etc.) , services and
food an individual or business consumes. Most of the carbon footprint
emissions for the average household come from "indirect" sources, i.e. fuel
burned to produce goods far away from the final consumer. These are
distinguished from emissions which come from burning fuel directly in one's
car or stove, commonly referred to as "direct" sources of the consumer's
carbon footprint.
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Activity
Distinguish the different sources of carbon foot-printing
from the following examples:
 factory smoke
 car smoke
 cigarette smoke
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Namibian Framework/Policy on Emerging
Renewable Resources Management
The Namibian government is concerned with the effect of
carbon footprint as well as the sustainable use and
management of the environment. To this end several policies
have been formulated and one of them is the policy on
renewable resources management. The policy document on
Renewable Resources Management states that the promotion
of the use of renewable energy will be driven through the
establishment of adequate institutional and planning
framework, the development of human resources, public
awareness and suitable financing systems.
In an effort to meet these goals, a number of projects and
programmes were initiated, implemented and facilitated by
the Government and through partnerships with developmental
organisations and the private sector.
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Disadvantages of a Sustainable/Green
Marketing Approach
Although sustainable/Green marketing practices can be a source of
sustainable competitive advantage for firms when consumers
associate these actions as being socially responsible, the outcome of
these actions on the perception of the firm is uncertain. One study
found that, the fact that a firm follows ethically sound business
principles does not mean that the consumers will buy that firm’s
products if the products do not meet the consumer’s minimum
standards in terms of quality.
The extent to which green and socially-responsible marketing
practices impact consumer behaviour will depend on the nature of
the business. For example, a firm manufacturing chemicals and
discharging toxic effluents into a recreational river, will be under a lot
more pressure to embrace environmentally-friendly manufacturing
principles than Eskom/Nampower which is said to releases toxic coal
fumes into the environment in its production of electricity
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Cont’d…
In 1993, the Ministry of Mines and Energy launched a
programme for the “Promotion of the Use of Renewable
Energy Sources in Namibia”, which was supported by the
Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ)
GmbH. In 1996 the Government launched the first solar
revolving fund under the Home Power Project with support
from Renewable Energy for African Development (REFAD) a
US-based development organisation. Under this project,
loans were granted to interested rural households for the
purchase of photovoltaic solar home systems (SHS) in order
to ensure the systems affordability for the entire nation and
over 600 units were sold through the programme. This was a
first step to address the financing barriers associated with
renewable energy technologies.
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Cont’d…
Subsequent programmes followed and these include the giant
Namibia Renewable Energy Programme (NAMREP) supported by
the Global
Environment Facility (GEF) through the United Nations
Development Programme (UNDP) and the Danish Government
funded Renewable Energy and Energy Efficiency Capacity Building
Programme (REEECAP). The Renewable Energy and Energy
Efficiency Institute (REEEI) was established to facilitate and
conduct research into and promote renewable energy (RE) and
energy efficiency (EE).
All these and other developments have seen a big surge in both
demand and installations of renewable energy technologies,
especially solar home systems for solar electricity. Other
technologies such as solar water pumping and solar water heating
have equally benefited.
Despite all these efforts, the contribution of renewable energy to
national energy mix is still negligible.
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Activity
In your opinion, why do you think that despite all the
above-mentioned efforts, the contribution of
renewable energy to national energy mix is still
negligible?
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Case Study
O&L Group of Companies Observes Earth Hour
Windhoek, 27 March 2014 - The Ohlthaver & List (O&L)
Group of Companies will take the lead when it observes
‘Earth Hour’ this Saturday, 29 March 2014 by switching-off
all its non-essential lights. O&L Group Manager: External
Relations, Roux-ché Locke said: “In support of ‘Earth
Hour’, our aim is to promote the event, create awareness
and challenge our employees to observe the event in
their individual capacity by sharing their ‘earth hour
observations’ with the rest of the world via social media
as well as at our internal forums and publications.”
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Earth Hour is scheduled to take place this Saturday, 29 March 2014 from 20h3021h30 with the aim to ‘go green’ for an hour in order to raise awareness about
global warming. Locke advised that the O&L Group is in the process to kick-off
an O&L Environmental Campaign that would run from April through to
December 2014. “As part of our vision - which is ‘to be the most progressive
and inspiring company’ and purpose ‘Creating a future, enhancing life’ - we aim
to have a positive carbon footprint by 2017 and as such we pay particular focus
on Energy Saving within the O&L Group. A great example of that is the recent
launch of Africa’s Largest Solar Rooftop through our sister companies, Namibia
Breweries Limited and O&L Energy. For us here at O&L, it is much more than
just the 1 Hour commemoration as we are driven and inspired by our long-term
vision, purpose and values like ‘We do the right things right’ and ‘Naturally
today for tomorrow”, concluded Locke. For more information, visit
Required:
Analyse the above article to determine how O&L is carrying out green
marketing. What are the possible lessons with regards green marketing can you
learn from the above?
SCM812S - Unit 5 - Efigenia Semente PON, Source (Adkins & Peattie,
Kottler, Lee, COLL Guide, Simataa E., Lamb et. al) 2015
41
END OF UNIT 5
SCM812S - Unit 5 - Efigenia Semente PON, Source (Adkins & Peattie,
Kottler, Lee, COLL Guide, Simataa E., Lamb et. al) 2015
42