Professional Documents
Culture Documents
on
Submitted to:
Mrs. Megha Bhatia
Project Supervisor
by
Shobhit Agrawal
Roll No.0989143
BBA- VI Sem.
April 2011
to
by
SHOBHIT AGRAWAL
BBA VI SEMESTER
SUBMITTED TO DEPARTMENT OF MANAGEMENT STUDIES IN THE PARTIAL
FULFILLMENT OF THE REQUIREMENT FOR THE DEGREE OF
The author hereby grants I.F.T.M. permission to reproduce and to distribute publicably, paper and
electronic copies of the project report in whole or in part.
Signature of student
Department of Management studies
March 2011
Certified by
Mrs.Megha Bhatia
Project Supervisor
Accepted by
Heartiest thanks to Dr. (Mrs.) Manjula Jain (H.O.D Management Department) and
other faculty members, librarian and all other staffs of my esteemed institute for their
I would like to thanks all the customers whom I met and they gave their valuable time to
answer my queries.
I express my heartfelt gratitude Mrs. Megha Bhatia (Project Supervisor) for giving me
the opportunity to do the Project Work and for providing me this learning experience in
Lastly I would express my sincere thanks to all respondents for their cooperation. I am
extremely obliged and highly thankful all those who have contributed to completion of
this project.
Shobhit Agrawal
BBA- VI Sem.
PREFACE
ACKNOWLEDGEMNET
PREFACE
OBJECTIVE
The first wave of Green Marketing occurred in the 1980s. Corporate Social
Responsibility (CSR) Reports started with the ice cream seller Ben & Jerry's where the
financial report was supplemented by a greater view on the company's environmental
impact. In 1987 a document prepared by the World Commission on Environment and
Development defined sustainable development as meeting “the needs of the present
without compromising the ability of future generations to meet their own need”, this
became known as the Brundtland Report and was another step towards widespread
thinking on sustainability in everyday activity. Two tangible milestones for wave 1 of
green marketing came in the form of published books, both of which were called Green
Marketing. They were by Ken Peattie (1992) in the United Kingdom and by Jacquelyn
Ottman (1993) in the United States of America.
In the years after 2000 a second wave of Green marketing emerged. By now CSR and the
Triple Bottom Line (TBL) were widespread. Such publications as a 2005 United Nations
Report, then in 2006 a book by Al Gore and the UK Stern Report brought scientific-
environmental arguments to a wide public in an easy to understand way. This knowledge
assessed the implications of moving to a low-carbon global economy and the potential of
different approaches. This new wave of Green Marketing differed from the first wave in
many respects. It is curious to note that Green Marketing Wave 1 followed an economic
recession, whereas Green Marketing Wave 2 came before the global recessions that come
to be known as the “Credit Crunch”. This difference may be significant in that it may
suggest that Green Marketing is here to stay. The green marketing concept dictates,
amongst other things, less use, recycling and avoiding waste, just some of the ways
society reacts at times of recession. (see Bradley 2003 for 6 green marketing strategies).
The past decade has shown that harnessing consumer power to effect positive
environmental change is far easier said than done. 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. While public opinion polls taken since the late
1980s have shown consistently that a significant percentage of consumers in the U.S. and
elsewhere profess a strong willingness to favor environmentally conscious products and
companies, consumers' efforts to do so in real life have remained sketchy at best. One of
green marketing's challenges is the lack of standards or public consensus about what
constitutes "green," according to Joel Makower, a writer on green marketing. In essence,
there is no definition of "how good is good enough" when it comes to a product or
company making green marketing claims. This lack of consensus -- by consumers,
marketers, activists, regulators, and influential people -- has slowed the growth of green
products, says Makower, because companies are often reluctant to promote their green
attributes, and consumers are often skeptical about claims.
Despite these challenges, green marketing has continued to gain adherents, particularly
in light of growing global concern about climate change. This concern has led more
companies to advertise their commitment to reduce their climate impacts, and the effect
this is having on their products and services
A GREEN MARKET IN NEWCASTLE
ONE OF THE MOST COMMONLY USED GREEN PRODUCTS – THE PHILIPS CFL
WHY IS GREEN MARKETING IMPORTANT?
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 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.
OPPORTUNITIES
It appears that all types of consumers, both individual and industrial are becoming
more concerned and aware about the natural environment. In a 1992 study of 16
countries, more than 50% of consumers in each country, other than Singapore, indicated
they were concerned about the environment. A 1994 study in Australia found that 84.6%
of the sample believed all individuals had a responsibility to care for the environment. A
further 80% of this sample indicated that they had modified their behavior, including
their purchasing behavior, due to environmental reasons. As demands change, many
firms see these changes as an opportunity to be exploited.
Given these figures, it can be assumed that firms marketing goods with
environmental characteristics will have a competitive advantage over firms marketing
non-environmentally responsible alternatives. There are numerous example of firms who
have strived to become more environmentally responsible, in an attempt to better satisfy
their consumer needs.
• McDonald's replaced its clam shell packaging with waxed paper because of
increased consumer concern relating to polystyrene production and Ozone
depletion.
• Tuna manufacturers modified their fishing techniques because of the increased
concern over driftnet fishing, and the resulting death of dolphins.
• Xerox introduced a "high quality" recycled photocopier paper in an attempt to
satisfy the demands of firms for less environmentally harmful products.
This is not to imply that all firms who have undertaken environmental marketing
activities actually improve their behavior. In some cases firms have misled consumers in
an attempt to gain market share. In other cases firms have jumped on the green
bandwagon without considering the accuracy of their behavior, their claims, or the
effectiveness of their products. This lack of consideration of the true "greenness" of
activities may result in firms making false or misleading green marketing claims.
SOCIAL RESPONSIBILITY
Many firms are beginning to realize that they are members of the wider
community and therefore must behave in an environmentally responsible fashion. This
translates into firms that believe they must achieve environmental objectives as well as
profit related objectives. This results in environmental issues being integrated into the
firm's corporate culture. Firms in this situation can take two perspectives;
1) They can use the fact that they are environmentally responsible as a marketing
tool; or
2) They can become responsible without promoting this fact.
There are examples of firms adopting both strategies. Organizations like the Body
Shop heavily promote the fact that they are environmentally responsible. While this
behavior is a competitive advantage, the firm was established specifically to offer
consumers environmentally responsible alternatives to conventional cosmetic products.
This philosophy is directly tied to the overall corporate culture, rather than simply being a
competitive tool.
An example of a firm that does not promote its environmental initiatives is Coca-
Cola. They have invested large sums of money in various recycling activities, as well as
having modified their packaging to minimize its environmental impact. While being
concerned about the environment, Coke has not used this concern as a marketing tool.
Thus many consumers may not realize that Coke is a very environmentally committed
organization.
Another firm who is very environmentally responsible but does not promote this
fact, at least outside the organization, is Walt Disney World (WDW). WDW has an
extensive waste management program and infrastructure in place, yet these facilities are
not highlighted in their general tourist promotional activities.
COMPETITIVE PRESSURE
Another major force in the environmental marketing area has been firms' desire to
maintain their competitive position. In many cases firms observe competitors promoting
their environmental behaviors and attempt to emulate this behavior. In some instances
this competitive pressure has caused an entire industry to modify and thus reduce its
detrimental environmental behavior. For example, it could be argued that Xerox's
"Revive 100% Recycled paper" was introduced a few years ago in an attempt to address
the introduction of recycled photocopier paper by other manufacturers. In another
example when one tuna manufacture stopped using driftnets the others followed suit.
Firms may also use green marketing in an attempt to address cost or profit related
issues. Disposing of environmentally harmful by-products, such as polychlorinated
biphenyl (PCB) contaminated oil are becoming increasingly costly and in some cases
difficult. Therefore firms that can reduce harmful wastes may incur substantial cost
savings. When attempting to minimize waste, firms are often forced to re-examine their
production processes. In these cases they often develop more effective production
processes that not only reduce waste, but reduce the need for some raw materials. This
serves as a double cost savings, since both waste and raw material are reduced.
The last way in which cost or profit issues may affect firms' environmental
marketing activities is that new industries may be developed. This can occur in two ways:
1) A firm develops a technology for reducing waste and sells it to other firms; or
For example, firms that clean the oil in large industrial condensers increase the
life of those condensers, removing the need for replacing the oil, as well as the need to
dispose of the waste oil. This reduces operating costs for those owning the condensers
and generates revenue for those firms cleaning the oil.
SOME PROBLEMS WITH GOING GREEN
No matter why a firm uses green marketing there are a number of potential
problems that they must overcome. One of the main problems is that firms using green
marketing must ensure that their activities are not misleading to consumers or industry,
and do not breach any of the regulations or laws dealing with environmental marketing.
For example marketers in the US must ensure their green marketing claims can meet the
following set of criteria, in order to comply with the FTC's guidelines. Green marketing
claims must;
When firms attempt to become socially responsible, they may face the risk that
the environmentally responsible action of today will be found to be harmful in the future.
Take for example the aerosol industry which has switched from CFCs
(chlorofluorocarbons) to HFCs (hydrofluorocarbons) only to be told HFCs are also a
greenhouse gas. Some firms now use DME (dimethyl ether) as an aerosol propellant,
which may also harm the ozone layer. Given the limited scientific knowledge at any point
in time, it may be impossible for a firm to be certain they have made the correct
environmental decision. This may explain why some firms, like Coca-Cola and Walt
Disney World, are becoming socially responsible without publicizing the point. They
may be protecting themselves from potential future negative backlash; if it is determined
they made the wrong decision in the past.
Reacting to competitive pressures can cause all "followers" to make the same
mistake as the "leader." A costly example of this was the Mobil Corporation who
followed the competition and introduced "biodegradable" plastic garbage bags. While
technically these bags were biodegradable, the conditions under which they were
disposed did not allow biodegradation to occur. Mobil was sued by several US states for
using misleading advertising claims. Thus blindly following the competition can have
costly ramifications.
The push to reduce costs or increase profits may not force firms to address the
important issue of environmental degradation. End-of-pipe solutions may not actually
reduce the waste but rather shift it around. While this may be beneficial, it does not
necessarily address the larger environmental problem, though it may minimize its short
term affects. Ultimately most waste produced will enter the waste stream, therefore to be
environmentally responsible organizations should attempt to minimize their waste, rather
than find "appropriate" uses for it.
GREEN HOUSE GASES AND THEIR SOURCES
CHAPTER - 2
Thus we see how green marketing myopia was faced by the Philips while trying
to bring into market the environment friendly light bulbs.
WHAT IS GREEN MARKETING MYOPIA
Green marketing must satisfy two objectives: improved environmental quality and
customer satisfaction. Misjudging either or overemphasizing the former at the expense of
the latter can be termed “green marketing myopia”. In 1960, Harvard business
professor Theodore Levitt introduced the concept of “marketing myopia” in a now-
famous and influential article in the Harvard Business Review. In it, he characterized the
common pitfall of companies’ tunnel vision, which focused on “managing products” (that
is, product features, functions, and efficient production) instead of “meeting customers’
needs” (that is, adapting to consumer expectations and anticipation of future desires).
General Motors (GM) and Ford encountered similar problems when they
launched their highly publicized EV-1 and Think Mobility electric vehicles, respectively,
in the late 1990s to early 2000s in response to the 1990 zero emission vehicle (ZEV)
regulations adopted in California. Both automakers believed their novel two-seater cars
would be market successes (GM offered the EV-1 in a lease program, and Ford offered
Think Mobility vehicles as rentals via the Hertz car-rental chain). Consumers, however,
found electric vehicles’ need for constant recharging with few recharging locations too
inconvenient. Critics charged that the automakers made only token efforts to make
electric cars a success, but a GM spokesperson recently explained, “We spent more than
$1 billion to produce and market the vehicle, [but] fewer than 800 were leased.” Most
drivers were not willing to drastically change their driving habits and expectations to
accommodate electric cars, and the products ultimately were taken off the market.
Other environmental products have also scored market successes by either serving
profitable niche markets or offering mainstream appeal.
Example – TOYOTA PRIUS
Consider the Toyota Prius, the gas-electric hybrid vehicle that achieves about 44
miles per gallon of gasoline. In recent years, Toyota’s production has hardly kept pace
with the growing demand, with buyers enduring long waits and paying thousands above
the car’s sticker price. Consequently, other carmakers have scrambled to launch their own
hybrids. However, despite higher gas prices, analysts assert that it can take 5 to 20 years
for lower gas expenses to offset many hybrid cars’ higher prices. Thus, economics alone
cannot explain their growing popularity.
Analysts offer several reasons for the Prius’ market demand. Initially, the buzz
over the Prius got a boost at the 2003 Academy Awards when celebrities such as
Cameron Diaz, Harrison Ford, Susan Sarandon, and Robin Williams abandoned stretch
limousines and oversized sport utility vehicles, arriving in Priuses to symbolize support
for reducing America’s dependence on foreign oil. Since then, the quirky-looking Prius’
badge of “conspicuous conservation” has satisfied many drivers’ desires to turn heads
and make a statement about their social responsibility, among them Google founders
Larry Page and Sergey Brin, columnist Arianna Huffington, comic Bill Maher, and
Charles, Prince of Wales. The Prius ultimately was named Motor Trend’s Car of the Year
in 2004. The trendy appeal of the Prius illustrates that some green products can leverage
consumer desires for being distinctive. Others say the Prius is just fun to drive—the
dazzling digital dashboard that offers continuous feedback on fuel efficiency and other
car operations provides an entertaining driving experience. More recently, however, the
Prius has garnered fans for more practical reasons. A 2006 Maritz Poll finds that owners
purchased hybrids because of the convenience of fewer fill-ups, better performance, and
the enjoyment of driving the latest technology. In some states, the Prius and other high-
mileage hybrid vehicles, such as Honda’s Insight, are granted free parking and solo-
occupancy access to high occupancy vehicle (HOV) lanes. In sum, hybrid vehicles offer
consumers several desirable benefits that are not necessarily “green” benefits.
TOYOTA PRIUS
Super energy-efficient appliances and fixtures are also becoming popular. Chic,
front-loading washing machines, for example, accounted for 25 percent of the market in
2004, up from 9 percent in 2001. EPA’s Energy Star label, which certifies that products
consume up to 30 percent less energy than comparable alternatives, is found on products
ranging from major appliances to light fixtures to entire buildings (minimum efficiency
standards vary from product to product). The construction industry is becoming
increasingly green as government and industry demand office buildings that are “high
performance” (for example, super energy- and resource-efficient and cost effective) and
“healthy” for occupants (for example, well-ventilated; constructed with materials with
low or no volatile organic compounds [VOC]). The U.S. Green Building Council’s
“Leadership in Energy and Environmental Design” (LEED) provides a rigorous rating
system and green building checklist that are rapidly becoming the standard for
environmentally sensitive construction.
Home buyers are recognizing the practical long-term cost savings and comfort of
natural lighting, passive solar heating, and heat-reflective windows, and a 2006 study
sponsored by home improvement retailer Lowe’s found nine out of ten builders surveyed
are incorporating energy-saving features into new homes. Additionally, a proliferation of
“green” building materials to serve the growing demand has emerged. Lowe’s competitor
The Home Depot is testing an ‘EcoOptions’ product line featuring natural fertilizers and
mold resistant drywall in its Canadian stores that may filter into the U.S. market. In short,
energy efficiency and green construction has become main stream.
The diversity and availability of green products indicate that consumers are not
indifferent to the value offered by environmental benefits. Consumers are buying green
—but not necessarily for environmental reasons. The market growth of organic foods
and energy-efficient appliances is because consumers desire their perceived safety and
money savings, respectively. Thus, the apparent paradox between what consumers
say and their purchases may be explained, in part, by green marketing myopia—a
narrow focus on the greenness of products that blinds companies from considering
the broader consumer and societal desires. A fixation on products’ environmental
merits has resulted frequently in inferior green products (for example, the original
EarthLight and GM’s EV-1 electric car) and unsatisfying consumer experiences.
CHAPTER - 3
The analysis of past research and marketing strategies finds that successful green
products have avoided green marketing myopia by following three important principles:
“The Three Cs” of consumer value positioning, calibration of consumer knowledge,
and credibility of product claims.
Additionally, when these five consumer value propositions are not inherent in the
green product, successful green marketing programs bundle (that is, add to the product
design or market offering) desirable consumer value to broaden the green product’s
appeal. In practice, the implication is that product designers and marketers need to align
environmental products’ consumer value (such as money savings) to relevant consumer
market segments (for example, cost conscious consumers).
The common inherent benefit of many green products is their potential energy and
resource efficiency. Given sky-rocketing energy prices and tax incentives for fuel-
efficient cars and energy saving home improvements and appliances, long-term savings
have convinced cost-conscious consumers to buy green.
Recently, the home appliance industry made great strides in developing energy
efficient products to achieve EPA’s Energy Star rating. For example, Energy Star
refrigerators use at least 15 percent less energy and dishwashers use at least percent less
energy than do traditional models. Consequently, an Energy Star product often
commands a price premium. Whirlpool’s popular Duet frontloading washer and dryer, for
example, cost more than $2,000, about double the price of conventional units; however,
the washers can save up to 12,000 gallons of water and $110 on electricity annually
compared to standard models (Energy Star does not rate dryers).
Laundry detergents are also touting energy savings. Procter & Gamble’s (P&G)
newest market entry, Tide Coldwater, is designed to clean clothes effectively in cold
water. About 80 to 85 percent of the energy used to wash clothes comes from heating
water. Working with utility companies, P&G found that consumers could save an average
of $63 per year by using cold rather than warm water. Adopting Tide Coldwater gives
added confidence to consumers already washing in cold water. As energy and resource
prices continue to soar, opportunities for products offering efficiency and savings are
destined for market growth.
Indoor air quality is also a growing concern. Fumes from paints, carpets,
furniture, and other décor in poorly ventilated “sick buildings” have been linked to
headaches, eye, nose, and throat irritation, dizziness, and fatigue among occupants.
Consequently, many manufacturers have launched green products to reduce indoor air
pollution. Sherwin Williams, for example, offers “Harmony,” a line of interior paints that
is low-odor, zero- VOC, and silica-free. Aside from energy efficiency, health and safety
have been key motivators driving the green building movement.
1.3 Performance
The conventional wisdom is that green products don’t work as well as “non-
green” ones. This is a legacy from the first generation of environmentally sensitive
products that clearly were inferior. Consumer perception of green cleaning agents
introduced in health food stores in the 1960s and 1970s, for example, was that “they cost
twice as much to remove half the grime.” Today, however, many green products are
designed to perform better than conventional ones and can command a price premium.
For example, in addition to energy efficiency, front-loading washers clean better and are
gentler on clothes compared to conventional top-loading machines because they spin
clothes in a motion similar to clothes driers and use centrifugal force to pull dirt and
water away from clothes. By contrast, most top-loading washers use agitators to pull
clothes through tanks of water, reducing cleaning and increasing wear on clothes.
Consequently, the efficiency and high performance benefits of top-loading washers
justify their premium prices.
Solar power was once used only for supplying electricity in remote areas (for
example, while camping in the wilderness or boating or in homes situated off the power
grid). That convenience, however, is being exploited for other applications. In
landscaping, for example, self-contained solar-powered outdoor evening lights that
recharge automatically during the day eliminate the need for electrical hookups and offer
flexibility for reconfiguration. With society’s increasing mobility and reliance on
electronics, solar power’s convenience is also manifest in solar-powered calculators,
wrist watches, and other gadgets, eliminating worries over dying batteries.
1.6 Bundling
Some green products do not offer any of the inherent five consumer desired
benefits noted above. This was the case when energy-efficient and CFC-free
refrigerators were introduced in China in the 1990s. While Chinese consumers preferred
and were willing to pay about 15 percent more for refrigerators that were “energy
efficient,” they did not connect the environmental advantage of “CFC-free” with either
energy efficiency or savings. Consequently, the “CFC-free” feature had little impact on
purchase decisions. To encourage demand, the CFC-free feature was bundled with
attributes desired by Chinese consumers, which included energy efficiency, savings,
brand/quality, and outstanding after-sales service. Given consumer demand for
convenience, incorporating time-saving or ease-of- use features into green products can
further expand their mainstream acceptance. Ford’s hybrid Escape SUV comes with an
optional 110-volt AC power outlet suitable for work, tailgating, or camping. Convenience
has also enhanced the appeal of Interface’s recyclable FLOR carpeting, which is
marketed as “practical, goof-proof, and versatile.” FLOR comes in modular square tiles
with four peel-and-stick dots on the back for easy installation (and pull up for altering,
recycling, or washing with water in the sink). Modularity offers versatility to assemble
tiles for a custom look. Interface promotes the idea that its carpet tiles can be changed
and reconfigured in minutes to dress up a room for any occasion. The tiles come in pizza-
style boxes for storage, and ease of use is FLOR’s primary consumer appeal.
Austin (Texas) Energy’s “Green Choice” program has led the US in renewable
energy sales for the past three years. In 2006, demand for wind energy outpaced supply
so that the utility resorted to selecting new “Green Choice” subscribers by lottery. While
most utilities find it challenging to sell green electricity at a premium price on its
environmental merit, Austin Energy’s success comes from bundling three benefits
that appeal to commercial power users: First, Green Choice customers are recognized
in broadcast media for their corporate responsibility; second, the green power is
marketed as “home grown,” appealing to Texan loyalties; and third, the program offers a
fixed price that is locked in for 10 years. Because wind power’s cost is derived primarily
from the construction of wind farms and is not subject to volatile fossil fuel costs, Austin
Energy passes its inherent price stability onto its Green Choice customers. Thus,
companies participating in Green Choice enjoy the predictability of their future energy
costs in an otherwise volatile energy market.
The analysis suggests that successful green marketing programs have broadened
the consumer appeal of green products by convincing consumers of their “non-green”
consumer value. The lesson for crafting effective green marketing strategies is that
planners need to identify the inherent consumer value of green product attributes
(for example, energy efficiency’s inherent long-term money savings) or bundle desired
consumer value into green products (such as fixed pricing of wind power) and to
draw marketing attention to this consumer value.
Many of the successful green products in the analysis described here employ
compelling, educational marketing messages and slogans that connect green product
attributes with desired consumer value. That is, the marketing programs successfully
calibrated consumer knowledge to recognize the green product’s consumer benefits. In
many instances, the environmental benefit was positioned as secondary, if mentioned at
all. Changes made in EPA’s Energy Star logo provide an example, illustrating the
program’s improved message calibration over the years. One of Energy Star’s early
marketing messages, “EPA Pollution Preventer,” was not only ambiguous but myopically
focused on pollution rather than a more mainstream consumer benefit. A later
promotional message, “Saving The Earth. Saving Your Money.” better associated energy
efficiency with consumer value, and one of its more recent slogans, “Money Isn’t All
You’re Saving,” touts economic savings as the chief benefit. This newest slogan also
encourages consumers to think implicitly about what else they are “saving”—the logo’s
illustration of the Earth suggests the answer, educating consumers that “saving the Earth”
can also meet consumer self-interest.
The connection between environmental benefit and consumer value is evident in
Earthbound Farm Organic’s slogan, “Delicious produce is our business, but health is our
bottom line,” which communicates that pesticide-free produce is flavorful and healthy.
Likewise, Tide Coldwater’s “Deep Clean. Save Green.” slogan not only assures
consumers of the detergent’s cleaning performance, but the term “green” offers a double
meaning, connecting Tide’s cost saving with its environmental benefit. Citizen’s solar-
powered Eco-Drive watch’s slogan, “Unstoppable Caliber,” communicates the product’s
convenience and performance (that is, the battery will not die) as well as prestige.
Some compelling marketing communications educate consumers to recognize
green products as “solutions” for their personal needs and the environment. When
introducing its Renewal brand, Rayovac positioned the reusable alkaline batteries as a
solution for heavy battery users and the environment with concurrent ads touting “How to
save $150 on a CD player that costs $100” and “How to save 147 batteries from going to
landfills.” Complementing the money savings and landfill angles, another ad in the
campaign featured sports star Michael Jordan proclaiming, “More Power. More Music.
And More Game Time.” to connect Renewal batteries’ performance to convenience. In
practice, the analysis conducted here suggests that advertising that draws attention to how
the environmental product benefit can deliver desired personal value can broaden
consumer acceptance of green products.
We can derive from past research that green claims should be specific and
meaningful. Toyota recognizes the ambiguity of the term “green” and discourages its use
in its marketing of its gas-electric hybrid cars. One proposed slogan, “Drive green,
breathe blue” was dismissed in favor of specific claims about fuel efficiency, such as
“Less gas in. Less gasses out.” Further, environmental claims must be humble and not
over-promise. When Ford Motor Company publicized in National Geographic and other
magazines its new eco-designed Rouge River Plant that incorporated the world’s largest
living roof of plants, critics questioned the authenticity of Ford’s environmental
commitment given the poor fuel economy of the automaker’s best-selling SUVs. Even
the Prius has garnered some criticism for achieving considerably less mileage
(approximately 26 percent less according to Consumer Reports) than its government
sticker rating claims, although the actual reduced mileage does not appear to be
hampering sales. Nonetheless, green product attributes need to be communicated honestly
and qualified for believability (in other words, consumer benefits and environmental
effectiveness claims need to be compared with comparable alternatives or likely usage
scenarios). For example, Toyota includes an “actual mileage may vary” disclaimer in
Prius advertising. When Ford’s hybrid Escape SUV owners complained that they were
not achieving expected mileage ratings, Ford launched the “Fuel-Economy School”
campaign to educate drivers about ways to maximize fuel efficiency. Further, EPA is
reconsidering how it estimates hybrid mileage ratings to better reflect realistic driving
conditions (such as heavy acceleration and air conditioner usage).
3.1. Third Party Endorsements and Eco-Certifications
Expert third parties with respected standards for environmental testing (such as
independent laboratories, government agencies, private consultants, or nonprofit
advocacy organizations) can provide green product endorsements and/ or “seals of
approval” to help clarify and bolster the believability of product claims. The “Energy
Star” label, discussed earlier, is a common certification that distinguishes certain
electronic products as consuming up to 30 percent less energy than comparable
alternatives. The U.S. Department of Agriculture’s “USDA Organic” certifies the
production and handling of organic produce and dairy products.
Green Seal and Scientific Certification Systems emblems certify a broad spectrum
of green products. Green Seal sets specific criteria for various categories of products,
ranging from paints to cleaning agents to hotel properties, and for a fee, companies can
have their products evaluated and monitored annually for certification. Green Seal has
certified the Hyatt Regency in Washington, DC, for the hotel’s comprehensive energy
and water conservation, recycling programs, and environmental practices. By contrast,
Scientific Certification Systems (SCS) certifies specific product claims or provides a
detailed “eco-profile” for a product’s environmental impact for display on product labels
for a broad array of products, from agricultural products to fisheries to construction.
In 2005, Proctor & Gamble partnered with the non-profit organization, the
Alliance to Save Energy (ASE), in a “viral marketing” campaign to spread news about
the money-saving benefits of laundering clothes in cold water with specially formulated
Tide Coldwater. ASE provided credibility for the detergent by auditing and backing
P&G’s claims that consumers could save an average of $63 a year if they switched from
warm to cold water washes. ASE sent e-mail promotions encouraging consumers to visit
Tide.com, an interactive Web site and take the “Coldwater Challenge” by registering to
receive a free sample. Visitors could calculate how much money they would save by
using the detergent, learn other energy-saving laundry tips, and refer email addresses of
their friends to take the challenge as well. Tide.com offered an engaging map of the
United States where, over time, visitors could track and watch their personal networks
grow across the country when their friends logged onto the site to request a free sample.
Given the immediacy of e-mail and the Internet, word-of-mouth is fast becoming
an important vehicle for spreading credible news about new products. According to the
Pew Internet & American Life Project, 44 percent of online U.S. adults (about 50 million
Americans) are “content creators,” meaning that they contribute to the Internet via blogs,
product recommendations, and reviews. To facilitate buzz, however, marketers need to
create credible messages, stories, and Web sites about their products that are so
compelling, interesting, and/or entertaining that consumers will seek the information out
and forward it to their friends and family. The fact that P&G was able to achieve this for
a low-involvement product is quite remarkable.
The prospect of rapidly depleting stocks of natural resources and the resulting
reality of price increases create opportunities for alternative technologies and new
efficiency with product design. For example, paper doesn’t have to come from trees; in
fact, alternative sources may be preferable. Promising new sources include kenaf, a fast-
growing bamboo grown in the southern US, and hemp, which is naturally pest resistant,
can be bleached with peroxide instead of chlorine, and produces a fiber more versatile
than fiber from trees.
In the Pollution Prevention Act of 1990, the United States Congress declared
"that pollution should be prevented or reduced at its source whenever feasible."
Since the cost savings associated with source reduction are roughly parallel to the amount
of packaging eliminated, the tenets of this law are not only good for the environment,
they are good for business. Less packaging also means less energy required for
manufacturing and transportation and less pollution from the production of packaging
itself.
Package in bulk for refilling. Refills used by all-purpose cleaners, to use less
packaging per product and save consumers money. Multi-purpose products such as
shampoo-and-conditioner-in-one also help to cut down on duplication.
With the help of innovative technologies, the use of recycled content in consumer
products has skyrocketed in the last decade. Products that formerly boasted 10 percent
recycled content may now incorporate as much as 100 percent post-consumer content.
Where even as recently as five years ago, recycled content was limited mostly to paper,
glass, metals, and some plastic laundry bottles, now an entire array of high quality
products including clothing, garden furniture, paint, and motor oil are closing the loop.
Individuals directly consume about 40 percent of the energy used in the U.S. for
such things as powering cars, lighting, heating and cooling homes, and running
appliances. In the process, they contribute about 40,000 pounds of carbon dioxide
emissions a year. However, many thousands of pounds can be eliminated by simple
actions. In fact, the California Energy Commission estimates that cost-effective
investments could reduce total U.S. electricity demand by 40 percent to 75 percent.
Scientific data and empirical evidence continue to link various illnesses with
consumer products made from synthetic chemicals. According to the EPA, formaldehyde
in wood paneling causes wheezing, organic gases in carpeting cause liver damage,
perchloroethylene used to dry-clean clothing causes headaches, and VOCs (volatile
organic compounds) in cleaning products cause nausea. Many illnesses can be traced to
indoor pollution, which has been proven to be ten times more toxic than its outdoor
counterpart.
As demonstrated by historical sales pitches for Maytag Washers and Volvo Cars,
consumers value durable appliances and automobiles. Thanks to environmental concerns,
long product life will increasingly become a source of added value and an indicator of
quality and convenience in many other industries as well.
The throwaway convenience culture is making way for reuse and refilling as
alternatives to land-filling, incineration, and even recycling.
Landfill disposal bans are in force across the nation for such highly toxic items as lead-
acid batteries, tires, used motor oil, paints, and refrigerators. Due to such legislative
pressures as well as extended producer responsibility laws in Europe, a growing number
of manufacturers now design their products for remanufacture, recycling, and repair, and
help set up the infrastructures for doing so. Smart marketers are turning these imperatives
into opportunities to save money, enhance quality and get closer to their customer.
In nature, everything is recycled. Waste for one organism becomes food for
another. According to EPA, 40 percent of our solid wastes are biodegradable materials
that can be effectively composted into humus, an organic matter that can enrich gardens
and agricultural soils. This has important implications for businesses, and a number of
innovative designers are developing products with this idea in mind.
RESULTS OF A SURVEY CONDUCTED IN THE USA
THE SEVEN STRATEGIES OF GREEN MARKETING
SUCCESS
The currency of the green business world is innovation, flexibility, change and
heart. New rules have emerged from the cloud of green marketing dust kicked up in the
late 1980s and early 1990s. We know better what works - and what does not. Seven
strategies that work are listed in Exhibit 1.
MORE PROFITS –
Many companies, and especially those in such highly polluting industries as
chemicals, oil, and electrical power generation, now have management systems in place
to make sure corporate environmental profiles and products exceed consumers’
expectations. Today, major U.S. corporations conduct environmental audits and recycle
their waste. Countless others upgrade their facilities with energy-efficient technologies.
Such steps reduce operating costs and liability while boosting profits.
Producing eco-efficient products creates less waste, uses fewer raw materials and
saves energy, too. Thanks to innovative manufacturing processes suggested by highly
motivated and environmentally trained employees, Interface, the world's largest producer
of commercial carpeting, projects a savings of more than $35 million by the end of 1997.
The changes required for making and marketing environmentally sensitive
products enhances employee morale and productivity with a payoff in improved customer
relations and overall returns on investment. Enhanced corporate imagery ensues, and this
can help attract investors and top talent.
COMPETITIVE ADVANTAGE –
Many marketers now know that being the first to the shelf with an environmental
innovation brings competitive advantage. Since 1993, Rayovac introduced Renewal
brand reusable alkaline batteries and redefined the market for re-chargeable. With 50
percent of the production capacity for phosphate detergents, German-based Henkel
pioneered the market for zeolites and claimed market leadership when their consumers
shifted to phosphate-free detergents. Philips Lighting, inventors of compact fluorescent
lighting technology, stood ready when businesses and electric power utilities came
calling for replacements for energy-guzzling incandescent. Wellman, Inc., has expanded
its business definition from plastics recycler to pioneers in the market for branded
polyester fiber made from used Coke bottles.
Many of these leaders have been showered with any number of eco-accolades
now offered by industry, media, government or environmental groups. One example is
the Special Edison Award for Environmental Achievement bestowed by the American
Marketing Association. It has been won by Fortune 1000 firms including 3M and Procter
and Gamble as well as by a raft of up-and-coming firms with a deep-green orientation
like Natural Cotton Colours, Patagonia, and Tom’s of Maine.
Young, aggressive competitors adept at capturing the imaginations and winning
the hearts of highly desirable environmentally and socially conscious customers are
introducing some of the most exciting green products. The success of Patagonia
outerwear, Stonyfield Farm Yogurt, and Tom’s of Maine toothpaste suggest that
consumers now have higher expectations for the products they buy and that quality is an
image that no longer stands apart from environmental impact.
Looking to cash in on the potential for future green-oriented sales, well-
established mass marketers now shop for green companies with promising green brands;
recent acquisitions include Earth’s Best Baby Foods (by Heinz), Murphy’s Oil Soap
(Colgate- Palmolive), EarthRite Cleaning Products (Reckitt & Colman). After nearly two
decades of compromising on quality –and languishing on once-dusty health food store
shelves as a result–today’s crop of green products finally embody all that consumers
demand: an opportunity to clean up the mess without having to give up price or quality.
With the deepened consumer confidence in green products that results, the market
becomes legitimized.
BETTER PRODUCTS –
While much brand switching is conducted in the name of altruism, what attracts
many consumers to greener products is quite simply the prospect of higher quality: water-
saving showerheads slash energy bills, concentrated laundry detergents are easier to carry
and store, and nontoxic garden products are safer for children. Except these enhanced
primary benefits–of performance, convenience, price, and safety, for example–that
accompany environmental improvements to continue to propel the market for
environmentally preferable products in the years and decades ahead.
PERSONAL REWARDS –
Green marketing offers a rare opportunity to integrate one’s values into the
workplace. Creating products that are more in sync with nature allows one to personally
contribute to environmental cleanup and help ensure a more secure future for our
children.
A mind once expanded never goes back to where it was. No longer content to
promise consumers that their clothes will become "whiter than white" or breath that is
"fresher than fresh", green marketers–like their bosses who manage for a double bottom
line–cultivate higher levels of satisfaction and reward. They offer their consumers the
prospect of healthier, more fulfilled lives, and the power to make the world a better place.
CHAPTER - 5
RESEARCH METHODOLOGY
RESEARCH METHODOLOGY
The research conducted for this report is based on secondary resource with the help of
officials of five companies. Every company has its own environmental strategy and thus
the efforts made by each company can not be measured on a common scale. Thus the
research is totally based on the interviews conducted which have been mentioned below.
These officials helped me with the research by discussing their environmental policies
and the strategies related to them as to how they reach out with these strategies to their
consumers. This often creates goodwill among the consumers about the products from
these companies. The excerpts from the interviews have been given below. The
companies and the officials who helped in this research were all from different fields
ranging from Information Technology to Telecomm and Manufacturing to FMCG. The
list of the companies and officials is given below:
The interviews focused mainly on one thing i.e. how the consumer has become aware
about the various hazards in the environment. The consumer today cares about the
environment and likes to go for environment healthy products. Also the companies have
to focus on a greener environment within their infrastructure for the well being of their
own employees.
The interview was then analyzed and on the basis of this analysis this report was
structured. The excerpts from this interview are given below.
Mr. Abhishek Sinha, Manager (HR), Suzuki Motorcycles:
“SMIPL manufacturing plant installed in Gurgaon (Haryana) having the annual plant
capacity of 1,75,000 units. We have got total land area of 37 acres and out of which
presently our plant is constructed in 6.5 acres of land and remaining area is left for the
land development and future expansion.”
“To take care of the health of all our employees, we maintain all international parameters
and standards for drinking water, treated water, ambient air shop floor, office and the
outside. We keep updating all these standards of health and welfare of employees through
a team of well qualified personnel in the R & D laboratory.”
Mr. Shantanu Varma, Country Manager, IBM India:
Around the world, there is an increasing awareness that human activity may threaten
delicate ecological systems. From evidence of global warming to concerns about water
and soil toxicity, individuals and groups are asking what they can do to reduce their
environmental impact. We at IBM provide solutions for different organizations facing
ecological problems. The challenges have become clear: the need for clean water and air;
affordable and reliable delivery of energy; the dwindling supply of fossil fuels; the reality
of climate disruption and its implications for future generations.
At IBM, our approach is twofold: we are working to make our existing products and
processes more efficient for both the environment and for business, while also developing
new innovations that can accelerate the adoption of products and services that have lesser
environmental impact.
We have focused a lot on water related issues because IBM’s Institute for Business Value
conducted a survey of more than 100 public and private sector executives. About 77
percent of respondents said they consider water management “extremely important” to
their organizations, and 71 percent expect, over the next five years, for water to create
more business cost and complexity. Thus we came up with some services that would
address the problems related to water.
• Natural Water Resources - Provides sensor data integration, analysis and
visualization to enable the measurement, modeling and management of water
levels, usage and quality in natural water resources.
• Water Utilities - Enables water providers to make rapid decisions regarding
business processes and operational efficiency to maximize their return on
investments as well as foresee and quickly respond to contamination issues and
emergencies.
• Water Infrastructure - Provides sensing systems for managing water
infrastructure, such as levee oversight management and flood control.
• Water Metering - Improves management of water supply and demand by
integrating data between the dozens of stakeholders involved. Provides all
stakeholders with consistent, real-time information to help them work together to
make critical decisions about water supply in a geographic region.
• Green Sigma for Water - A business consulting service that identifies where
water is being used, measures and monitors usage, and creates process
improvements to reduce water use. IBM pilots have achieved reductions in water
usage of 30 percent.
As part of IBM's Big Green 2.0 initiative, we are continually looking at ways to assist
business in running their IT operations with greater efficiency and sustainability. The
project Big Green tackles the problem of the Global Energy Crisis. Here we address the
problem of energy conservation with the efficient use of IT. We have developed various
software solutions which help the organizations in running their systems by using
minimal energy resources.
Ms. Anupama Priyadarshini, General Manager, PepsiCo, India:
PepsiCo India is striding ahead rapidly towards enabling the global vision to be the
world's premier consumer products company focused on convenience foods and
beverages. PepsiCo India seeks to produce healthy financial rewards for investors as it
provide opportunities for growth and enrichment to its employees, business partners and
the communities in which it operates.
On Step taken towards replenishing water as they are more into beverages:
PepsiCo is committed to minimizing the impact of its business on the environment and
recognizes that corporations can play a key role in using scarce resources such as water
with care and responsibility.
While agriculture utilizes the bulk of fresh water in India (83%), industry uses 6% of
which the beverage industry uses but a mere 0.04%. But every drop counts, and PepsiCo
India's primary focus in its beverage and snacks plants has been on conserving water at
each stage of the manufacturing process.
In 2003, PepsiCo India embarked on its quest to achieve positive water balance by
2009. That means PepsiCo India will conserve, recharge, and thus replenish more water
in its plants and in its communities, than the total water it uses to manufacture beverage
products.
PEPSICO’S WATER BALANCE
Despite the creation of a detailed policy on Solid Waste Management and Handling rules
in 2000, very few municipalities in the country were able to completely comply with
these rules. PepsiCo India and EXNORA effectively implemented a model project in
Pammal district in Tamil Nadu that adhered to the Government policy on waste
management. The project created a visible difference in the local environment of the
region.
PepsiCo India’s foods division, Frito Lay, also generates biofuels from waste in its plants
thus reducing methane emission and 875 MT of CO2 emission annually, in addition to
achieving 14% reduction in energy use. New capacity expansion in plants has been
designed to impact further reductions in water, power and fuel.
PepsiCo's involvement in Indian agriculture stems from its vision of creating a cost-
effective, localized agri-base in India by leveraging farmers’ access to world class
agricultural practices. PepsiCo India worked with farmers and State Governments to
improve agri sustainability, crop diversification and raise farmer incomes. PepsiCo
helped transform the lives of thousands of farmers by helping them refine their farming
techniques and raise farm productivity, and customized solutions to suit specific
geographies and locations.
The most ambitious project is a joint programme, launched in 1989, between PepsiCo
India, the Punjab Agriculture University (PAU) in Ludhiana and Punjab Agro Industries
Corporation (PAIC) in Chandigarh. The programme focuses on evolving agricultural
practices to help Punjab farmers produce internationally competitive products. Over the
last five years, PepsiCo has also collaborated with the Thapar Institute of Technology to
develop a high quality potato seed programme.
TERI was established in 1974 with the purpose of tackling and dealing with the immense
and acute problems that mankind is likely to be faced with in the years ahead on account
of the gradual depletion of the earth’s finite energy resources which are largely non-
renewable and on account of the existing methods of their use which are polluting.Over
the years the Institute has developed a wider interpretation of this core purpose and its
application and has created an environment that is enabling for the development of
solutions to global problems in the fields of energy, environment and current patterns of
development, which are largely unsustainable. The Institute has grown substantially over
the years, particularly, since it launched its own research activities and established a base
in New Delhi, its registered headquarters. The central element of TERI’s philosophy has
been its reliance on entrepreneurial skills to create benefits for society through the
development and dissemination of intellectual property. The strength of the Institute lies
in not only identifying and articulating intellectual challenges straddling a number of
disciplines of knowledge but also in mounting research, training and demonstration
projects leading to development of specific problem-based advanced technologies that
help carry benefits to society at large. This association helps us in addressing the
conservation of energy issue.
Mr. Gaurav Tyagi, Manager (Marketing), Bharti Airtel:
We generate e-bills which support the cause “Save Paper”. If a customer doesn’t mind
not receiving bills on paper we send him E-bills on his mail. We try and address as many
customers as possible and try and make them understand that it would be better if they
received e-bills as it would reach them quicker and more importantly save paper and help
the environment. Up till now we have had a great response from the consumers which
show how environment conscious they are.
We are a telecom company and so we do not have a lot of initiatives as we don’t need
them but the Bharti Group has a 50:50 Joint Venture with DE Rothscheld. In addition to
being the world’s second largest producer of fresh fruits & vegetables, India is also
amongst the lowest cost producer of farm products. To capitalize on such inherent
advantages, Field Fresh Foods plans to employ the world’s best practices and technology
to work towards converting India into a preferred “World Food Basket”. As part of its
commitment to the green field project, the company plans to set up a world-class “Agri
Research Center” and a “Model Farm” in Punjab in the first phase. The state of the art
agri research center will primarily carry out research on hybrid seeds and agro farming
techniques. The research center will work towards the identification and adoption of
conventional and emerging technologies and promote their “On Field” usage to further
enhance agricultural productivity in an environmentally sustainable manner.
Mr. P. Rajasekhar, Vice President, Kapoor Light Life Style:
“We don’t have a manufacturing unit. All our products are imported and then assembled
in our assembling unit. The products that we make are outsourced in various parts to
different vendors who after making those parts send them back to us. After this our
assembling unit takes over and assembles the product as a whole.” We have a work force
of 70 people in our assembling unit in Okhla, New Delhi.”
On the priority given to the cleanliness of the environment at Kapoor Light Life
Style:
“We use dies and colours which are non toxic. Also the materials used are all recyclable.
We also have proper waste disposal facility in our assembly unit and we take it as our
endeavour to keep the environment clean and green.”
“We are the oldest and most trusted lighting company in India. We understand that our
customer expects us to use the best material and at the same time he is well educated and
thus understands the need of a clean environment. We thus use recyclable and bio
degradable materials only in our products. Our product mainly consists of fabric, metal,
non toxic dies and glass. We DO NOT use plastic in our products. The crystals that we
use are electro statically charged and thus do not allow dust to settle on them.”
CHAPTER - 6
CONCLUSION
AND
RECOMENDATION
CONCLUSION
Green marketing should not neglect the economic aspect of marketing. Marketers
need to understand the implications of green marketing. If you think
customers are not concerned about environmental issues or will not pay a
premium for products that are m o r e e c o - r e s p o n s i b l e , t h i n k a g a i n . Y o u
m u s t f i n d a n o p p o r t u n i t y t o e n h a n c e y o u product’s performance and
strengthen your customer's loyalty and command a higher price. Green
marketing is still in its infancy and a lot of research is to be done on green marketing to
fully explore its potential.
RECOMMENDATION
Books:
1. Green Marketing New Hopes & Challenges- By Dr. Vemuri Laxmi Narayna
2. The New Rules For Green Marketing- By Jacquelyn Ottman (Published by Berett
Koheler)
Websites:
1. http://www.greenmarketing.com/green_marketing_book
2. http://egj.lib.uidaho.edu/egj02/polon01.html
3. http://www.awea.org/policy/greenprins.html
4. http://www.sustainablemarketing.com/
5. http://www.onpoint-marketing.com/green-marketing.htm
6. http://www.ecomall.com/greenshopping/greencorner.htm
7. http://www.tompaine.com/articles/2006/11/03/bright_green_marketing_challenge
.php
8. http://www.plentymag.com/features/2006/11/green_marketing_machine.php
9. http://blog.futurelab.net/2007/02/green_marketing_leverages_soci.html
10. http://www.kidsfirst.org/kidsfirst/html/info/greenm.htm
11. http://marketinggreen.wordpress.com/2007/01/23/green-marketing-through-
behavioral-targeting/
12. http://www.americanchronicle.com/articles/viewArticle.asp?articleID=21141
13. http://www.roncastle.com/green-marketing-ideas.htm