A
Seminar Report
ON
“LIBERALIZATION”
Submitted in partial fulfillment of the requirement for the award of degree of
“MASTER OF BUSINESS ADMINISTRATION”
Session (2011-2013)
Submitted to Submitted By
Mrs Monika Sharma Sahil
(H.O.D MBA Dept.) M.B.A 1ST SEM.
Roll No. – 01211009
DOON VALLEY INSTITUTE OF ENGINEERING AND
TECHNOLOGY, KARNAL
Approved by AICTE, Affiliated to KURUKSHETRA UNIVERSITY, KURUKSHETRA
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PREFACE
The removal of or reduction in the trade practices that thwart free flow of goods and services
from one nation to another. It includes dismantling of tariff (such as duties, surcharges, and
export subsidies) as well as nontariff barriers (such as licensing regulations, quotas, and arbitrary
standards).liberalization refers to a relaxation of previous government restrictions, usually in
areas of social or economic policy.
Liberalization means relaxation of various government restrictions in the areas of social and
economic policies. Liberalizing trade policy by the government that is removal of tariff,
subsidies and other restrictions on the flow of goods and services between countries is also
termed as liberalization. Liberalization is the result of New Industrial Policy which abolished the
"License system".
All industries except six major industries were liberalized. As a result industries grew rapidly
and therefore liberalization also means deregulation and delicensing of industries.
Autonomy at large has resulted because of liberalization. Liberalization means to follow liberal
economic policy, accepted by the world. It has revolutionized the entire business world and has
provided highly competitive opportunities for all countries. Liberalization has opened new
business opportunities abroad and increased foreign direct investment.
Liberalized trade policy resulted in the free flow of goods from and within the country. A
number of multinational company started operating world wide including India. New market for
various goods came into existence and resulted not only in urban but also in rural development.
It became very easy to obtain loans from banks for business expansion. "Foreign Collaboration"
is the latest outcome of liberalization.
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ACKNOWLEDGEMENT
I take this opportunity to express my acknowledgement and a deep sense of attitude for rendering
valuable assistance and guidance to me by the following personalities for successful competition
of my seminar report. A special thanks to respected Director G. S. SHARMA for being a
source of inspiration. My sincere thanks to Mrs. MONIKA SHARMA (H.O.D MBA Deptt.)
for her salient cooperation and help through her sound judgment and without her sound judgment
and without her advice the completion of this report would not have been possible.
A very sincere thanks to Mrs MONIKA SHARMA (Lect. Of MBA) for suggesting me
the topic of my report. She has been a source of encouragement, guidance and advice throughout
the source of my report preparation, I am also thankful to all faculty members of MBA Deptt.
For their valuable entire guidance. Again I would like to acknowledge my sincere thanks to Mrs
Monika for providing me an opportunity to work under their valuable time.
(SAHIL GANDHI)
TABLE OF CONTENTS
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Serial No. Name of the Topic Page No.
Chapter-1 Introduction
1.1 Meaning
1.2
Chapter-2
2.1
2.2
2.3
Chapter-3
3.1
3.2
3.3
3.4
Chapter-4
4.1
4.2
4.3
4.4
Chapter-5
Chapter-6
Conclusion
Bibliography
1.1 Introduction
According to the American Marketing Association, green marketing is the marketing of
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products that are presumed to be environmentally safe. Thus green marketing incorporates a
broad range of activities, including product modification, changes to the production process,
packaging changes, as well as modifying advertising. Yet defining green marketing is not a
simple task where several meanings intersect and contradict each other; an example of this will
be the existence of varying social, environmental and retail definitions attached to this term.
Other similar terms used are Environmental Marketing and Ecological Marketing. Thus "Green
Marketing" refers to holistic marketing concept wherein the production, marketing consumption
an disposal of products and services happen in a manner that is less detrimental to the
environment with growing awareness about the implications of global warming, non-
biodegradable solid waste, harmful impact of pollutants etc., both marketers and consumers are
becoming increasingly sensitive to the need for switch in to green products and services. While
the shift to "green" may appear to be expensive in the short term, it will definitely prove to be
indispensable and advantageous, cost-wise too, in the long run.
According to the American Marketing Association,
The marketing of products that are presumed to be environmentally safe.
(Socially marketing definition): The development and marketing of products designed to
minimize negative effects on the physical environment or to improve its quality.
(Environment definition): The effort by organization to produce, promote, package and reclaim
products in a manner that is sensitive or responsive to ecological concerns.
Green marketing emphasizes environmental stewardship. Alma T. Mintu and Hector R. Lozada
define green marketing as "the application of marketing tools to facilitate exchanges that satisfy
organizational and individual goals in such a way that the preservation, protection and
conservation of the physical environment is upheld." Walter Codington defines environmental
marketing as "marketing activities that recognize environmental stewardship as a business
development responsibility and business growth responsibility." Others have focused more on
strategic dimensions in defining green marketing; for example, Martin Charter defines it as "a
holistic and responsible strategic management process that identifies, anticipates, satisfies and
fulfills stakeholder needs for a reasonable reward that does not adversely affect human or natural
environmental well-being."
1.2 MEANING
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―Green Marketing is the marketing of products that are presumed to be environmentally safe.
Thus green marketing incorporates a broad range of activities, including product modification,
changes to the production process, packaging changes, as well as modifying advertising. Yet
defining green marketing is not a simple task where several meanings intersect and contradict
each other, an example of this will be the existence of varying social, environmental and retail
definitions attached to this term. Other similar terms used are Environmental Marketing and
Ecological Marketing.
DEFINATION
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Alma T. Mintu and Hector R. Lozada define green marketing as "the application of marketing
tools to facilitate exchanges that satisfy organizational and individual goals in such a way that
the preservation, protection and conservation of the physical environment is upheld." Walter
Codington defines environmental marketing as "marketing activities that recognize
environmental stewardship as a business development responsibility and business growth
responsibility." Others have focused more on strategic dimensions in defining green marketing;
for example, Martin Charter defines it as "a holistic and responsible strategic management
process that identifies, anticipates, satisfies and fulfills stakeholder needs for a reasonable reward
that does not adversely affect human or natural environmental well-being."
The definition also includes the protection of natural environment by attempting to
minimize the detrimental impact, this exchange has on the environment.
This second point is very important for human consumption by its very nature is
destructive to the natural environment. To be more accurate products making green
claims should state they are ― less environmentally harmful‖ rather than ― environmental
friendly.‖ Thus green marketing should look at minimizing environmental harm, not
necessarily eliminating it.
The industrial houses has recognised that the entire system of production and
consumption determines environmental quality. Environmental impacts are a function of
the way services are provided and the way goods are produced, delivered, used and
disposed off. Production and consumption are considered together because gains made by
controlling, reducing or minimizing pollution from production can be soon overshadowed by the
impactsfrom concurrent increases in the scale of demand for those services goods from growing
consumer base.
Green Marketing in India
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The term Green Marketing came into prominence in the late 1980s and early 1990s. The
American Marketing Association (AMA) held the first workshop on "Ecological Marketing" in
1975. The proceedings of this workshop resulted in one of the first books on green marketing
entitled "Ecological Marketing".
The 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.
According to Jacquelyn Ottman, (author of "The New Rules of Green Marketing: Strategies,
Tools, and Inspiration for Sustainable Branding" (Greenleaf Publishing and Berrett-Koehler
Publishers, February 2011) from an organizational standpoint, environmental considerations
should be integrated into all aspects of marketing — new product development and
communications and all points in between. The holistic nature of green also suggests that besides
suppliers and retailers new stakeholders be enlisted, including educators, members of the
community, regulators, and NGOs.Environmental issues should be balanced with primary
customer needs.
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.
Importance of Green Marketing
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It is really scary to read these pieces of information as reported in the Times recently: "Air
pollution damage to people, crops and wildlife in he US totals tens of billions of dollars each
year". "More than 12 other studies in the US, Brazil Europe , Mexico , South Korea and Taiwan
have established links between air pollutants and low birth weight premature birth still birth and
infant death".
As resources are limited and human wants are unlimited, it is important for the marketers to
utilize the resources efficiently without waste as well as to achieve the organization's objective.
So green marketing is inevitable.
There is growing interest among the consumers all over the world regarding protection of
environment. Worldwide evidence indicates people are concerned about the environment and are
changing their behavior. As a result of this, green marketing has emerged which speaks for
growing market for sustainable and socially responsible products and services.
Thus the growing awareness among the consumers all over the world regarding protection of the
environment in which they live, People do want to bequeath a clean earth to their offspring.
Various studies by environmentalists indicate that people are concerned about the environment
and are changing their behavior pattern so as to be less hostile towards it. Now we see that most
of the consumers, both individual and industrial, are becoming more concerned about
environment-friendly products. Most of 0them feel that environment-friendly products are safe to
use. As a result, green marketing has emerged, which aims at marketing sustainable and socially-
responsible products and services. Now is the era of recyclable, non-toxic and environment-
friendly goods. This has become the new mantra for marketers to satisfy the needs of consumers
and earn better profits.
Green marketing is the process of developing products and services and promoting them to
satisfy the customers who prefer products of good quality, performance and
convenience at affordable cost, which at the same time do not have a detrimental impact on the
environment. It includes a broad range of activities like product modification, changing the
production process, modified advertising, change in packaging, etc., aimed at reducing the
detrimental impact of products and their consumption and disposal on the environment.
Companies all over the world are striving to reduce the impact of products and services on the
climate and other environmental parameters. Marketers are taking the cue and are going green.
Green marketing was given prominence in the late 1980s and 1990s after the proceedings of the
first workshop on Ecological marketing held in Austin, Texas (US), in 1975. Several books on
green marketing began to be published thereafter. According to the Joel makeover (a writer,
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speaker and strategist on clean technology and green marketing), green marketing faces a lot of
challenges because of lack of standards and public consensus to what constitutes "Green". The
green marketing has evolved over a period of time. According to Peattie (2001), the evolution of
green marketing has three phases. 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.
Green marketing is a vital constituent of the holistic marketing concept. It is particularly
applicable to businesses that are directly dependent on the physical environment; for example,
industries like fishing, processed foods, tourism and adventure sports. Changes in the physical
environment may pose a threat to such industries. Many global players in diverse businesses are
now successfully implementing green marketing practices.
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MARKETING MIX OF GREEN MARKETING
When companies come up with new innovations like eco friendly products, they can access new
markets, enhance their market shares, and increase profits. Just as we have 4Ps product prices,
place and promotion in marketing, we have 4ps in green marketing too, but they are a bit
different. They are buttressed by three additional Ps, namely people, planet and profits.
A. PRODUCT:
The products have to be developed depending on the needs of the customers who prefer
environment friendly products. Products can be made from recycled materials or from used
goods. Efficient products not only save water, energy and money, but also reduce harmful effects
on the environment. Green chemistry forms the growing focus of product development. The
marketer's role in product management includes providing
product designers with market-driven trends and customer requests for green product attributes
such as energy saving, organic, green chemicals, local sourcing, etc., For example, Nike is the
first among the shoe companies to market itself as green. It is marketing its Air Jordan shoes as
environment-friendly, as it has significantly reduced the usage of harmful glue adhesives. It has
designed this variety of shoes to emphasize that it has reduced wastage and used environment-
friendly materials.
B. PRICE
Green pricing takes into consideration the people, planet and profit in a way that takes care of the
health of employees and communities and ensures efficient productivity. Value can be added to
it by changing its appearance, functionality and through customization, etc. Wal Mart unveiled
its first recyclable cloth shopping bag. IKEA started charging consumers when they opted for
plastic bags and encouraged people to shop using its "Big Blue Bag".
C. PLACE
Green place is about managing logistics to cut down on transportation emissions, thereby in
effect aiming at reducing the carbon footprint. For example, instead of marketing an imported
mango juice in India it can be licensed for local production. This avoids shipping of the product
from far away, thus reducing shipping cost and more importantly, the consequent carbon
emission by the ships and other modes of transport.
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D. PROMOTION
Green promotion involves configuring the tools of promotion, such as advertising, marketing
materials, signage, white papers, web sites, videos and presentations by keeping people, planet
and profits in mind. British petroleum (BP) displays gas station which its sunflower motif and
boasts of putting money into solar power. Indian Tobacco Company has introduced
environmental-friendly papers and boards, which are free of elemental chlorine. Toyota is trying
to push gas/electric hybrid technology into much of its product line. It is also making the single
largest R&D investment in the every-elusive hydrogen car and promoting itself as the first eco-
friendly car company. International business machines Corporation (IBM) has revealed a
portfolio of green retail store technologies and services to help retailers improve energy
efficiency in their IT operations. The center piece of this portfolio is the IBM SurePOS 700, a
point-of-sale
system that, according to IBM, reduces power consumption by 36% or more. We even see the
names of retail outlets like "Reliance Fresh", Fresh@Namdhari Fresh and Desi, which while
selling fresh vegetables and fruits, transmit an innate communication of green marketing.
Green marketer can attract customers on the basis of performance, money savings, health and
convenience, or just plain environmental friendliness, so as to target a wide range of green
consumers
Consumer awareness can be created by spreading the message among consumers about the
benefits of environmental-friendly products. Positing of profiles related to green marketing on
social networks creates awareness within and across online peer
groups. Marketing can also directly target the consumers through advertisements for product
such as energy saving compact fluorescent lamps, the battery “powered Reva car, etc.
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REASONS FOR USING GREEN MARKETING IN FIRMS
When looking through the literature, there are several suggested reasons for firms increased use
of Green Marketing. Five possible reasons cited Organizations perceive environmental
marketing to be an opportunity that can be used to achieve its objectives
1. Organizations perceive environmental marketing to be an opportunity that can be used to
achieve its objectives
2. Organizations believe they have a moral obligation to be more socially responsible
3. Governmental bodies are forcing firms to become more responsible
4. Competitors' environmental activities pressure firms to change their environmental
marketing activities
5. Cost factors associated with waste disposal, or reductions in material usage forces firms
to modify their behavior.
OPPORTUNITIES
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. 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 examples of firms who have strived to become more environmentally responsible, in
an attempt to better satisfy their consumer need. McDonald's replaced its clam shell packaging
with waxed paper because of increased consumer concern relating to polystyrene production and
Ozone depletion. 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.
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SOCIAL RESPONSIBILITY & GREEN MARKETING
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
GOVERNMENTALPRESSURE
As with all marketing related activities, governments want to "protect" consumers and society;
this protection has significant green marketing implications. Governmental regulations relating
to environmental marketing are designed to protect consumers in several ways, 1) reduce
production of harmful goods or by-products; 2) modify consumer and industry's use and/or
consumption of harmful goods; or 3) ensure that all types of consumers have the ability to
evaluate the environmental composition of goods.
Governments establish regulations designed to control the amount of hazardous wastes produced
by firms. Many by-products of production are controlled through the issuing of various
environmental licenses, thus modifying organizational behavior. In some cases governments try
to "induce" final consumers to become more responsible. For example, some governments have
introduced voluntary curb-side recycling programs, making it easier for consumers to act
responsibly. In other cases governments tax individuals who act in an irresponsible fashion. For
example in Australia there is a higher gas tax associated with leaded petrol.
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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.
COST OR PROFIT ISSUES
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..
DARK SIDE OF GREEN MARKETING:
The Green Movement is still in its infancy and is just starting to build trust among people now
concerned about the environment. These are people who, in many cases, are now willing to pay
more for a green product. Should that product not be green or live up to its promises, many new
green consumers will lose faith in the movement as a whole.
However, green marketing poses huge dangers for marketers if they get it wrong:
1. Most customers choose to satisfy their personal needs before caring for the environment.
2. Overemphasizing greenness rather than customer needs can prove devastating for a product.
3. Many customers keep away from products labeled ―green‖ because they see such labeling as a
marketing gimmick,
and they may lose trust in an organization that suddenly claims to be green.
4. Green products require renewable and recyclable material, which is costly.
5. Requires a technology, which requires huge investment in R & D
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6. Water treatment technology, which is too costly
7. Majority of the people are not aware of green products and their uses
8. Majority of the consumers are not willing to pay a premium for green products
BENEFITS OF GREEN MARKETING
Today's consumers are becoming more and more conscious about the environment and are
also becoming socially responsible. Therefore, more companies are responsible to consumers'
aspirations for environmentally less damaging or neutral products. Many companies want to
have an early-mover advantage as they have to eventually move towards becoming green. Some
of the advantages of green marketing are,
It ensures sustained long-term growth along with profitability.
It saves money in the long run, thought initially the cost is more.
It helps companies market their products and services keeping the environment aspects in mind.
It helps in accessing the new markets and enjoying competitive advantage.
Most of the employees also feel proud and responsible to be working for an environmentally
responsible company.
PROBLEMS OF GREEN MARKETING
Many organizations want to turn green, as an increasing number of consumers' ant to associate
themselves with environmental-friendly products. Alongside, one also witnesses confusion
among the consumers regarding the products. In particular, one often finds distrust regarding the
credibility of green products. Therefore, to ensure consumer confidence, marketers of green
products need to be much more transparent, and refrain from breaching any law or standards
relating to products or business practices.
PATHS TO GREENNESS
Green marketing involves focusing on promoting the consumption of green products. Therefore,
it becomes the responsibility of the companies to adopt creativity and insight, and be committed
to the development of environment-friendly products. This will help the society in the long run.
Companies which embark on green marketing should adopt the following principles in their path
towards "greenness."
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Adopt new technology/process or modify existing technology/process so as to reduce
environmental impact.
Establish a management and control system that will lead to the adherence of stringent
environmental safety norms.
Using more environment-friendly raw materials at the production stage itself.
Explore possibilities of recycling of the used products so that it can be used to offer similar or
other benefits with less wastage.
Marketing Strategies
The marketing strategies for green marketing include: -
Marketing Audit (including internal and external situation analysis)
Develop a marketing plan outlining strategies with regard to 4 P's
Implement marketing strategies
Plan results evaluation
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Popularity and effectiveness
Ongoing debate
The popularity of such marketing approach and its effectiveness is hotly debated. Supporters
claim that environmental appeals are actually growing in number–the Energy Star label, for
example, now appears on 11,000 different companies models in 38 product categories,
from washing machines and light bulbs to skyscrapers and homes. However, despite the growth
in the number of green products, green marketing is on the decline as the primary sales pitch for
products. (NEEDS CITATION) On the other hand, Roper‘s Green Gauge shows that a high
percentage of consumers (42%)feel that environmental products don‘t work as well as
conventional ones. This is an unfortunate legacy from the 1970s when shower heads sputtered
and natural detergents left clothes dingy. Given the choice, all but the greenest of customers will
reach for synthetic detergents over the premium-priced, proverbial "Happy Planet" any day,
including Earth Day. New reports, however show a growing trend towards green products.
Confusion
One challenge green marketers -- old and new -- are likely to face as green products and
messages become more common is confusion in the marketplace. "Consumers do not really
understand a lot about these issues, and there's a lot of confusion out there," says Jacquelyn
Ottman(founder of J. Ottman Consulting and author of "Green Marketing: Opportunity for
Innovation.") Marketers sometimes take advantage of this confusion, and purposely make false
or exaggerated "green" claims. Critics refer to this practice as "green washing".
Greenwashing
The term ―greenwashing‖ refers to all industries that adopt outwardly green acts with an
underlying purpose to increase profits. The primary objective of greenwashing is to provide
consumers with the feeling that the organization is taking the necessary steps to responsibly
manage its ecological footprint. In reality, the company may be doing very little that is
environmentally beneficial The term greenwashing was first used by environmentalist Jay
Westerveld when objecting to hotelier's practice of placing notices in hotel rooms which asked
their quests to reuse towels to ―save the environment‖. Westerveld noted that there was little else
to suggest that the hoteliers were interested in reducing their environmental impacts, and that
their interest in washing fewer towels seemed to be motivated by a concern to save costs rather
than the environment. Since then greenwashing has become a central feature of debates about
marketing communications and sustainability, with ―awards‖ for greenwashing established and
numerous campaigns, law and advices developed in an attempt to reduce or curb it.
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Statistics
According to market researcher Mintel, about 12% of the U.S. population can be identified as
True Greens, consumers who seek out and regularly buy so-called green products. Another 68%
can be classified as Light Greens, consumers who buy green sometimes. "What chief marketing
officers are always looking for is touch points with consumers, and this is just a big, big, big
touch point that's not being served," says Mintel Research Director David Lockwood. "All the
corporate executives that we talk to are extremely convinced that being able to make some sort
of strong case about the environment is going to work down to their bottom line."
Target market
In 1989, 67 percent of Americans stated that they were willing to pay 5-10 percent
more for ecologically compatible products. By 1991, environmentally conscious
individuals were willing to pay between 15-20 percent more for green products. By
1993, Myburgh-Louw and O´Shaughnessy conducted a mail survey of female
consumers in the UK to investigate their perceptions of environmental claims on
the packaging of clothes detergents. They found that 79 percent of their sample
agreed to pay up to 40 percent more for a product which was identical in every
respect to their own brand and which had been proven to be green. An important
challenge facing marketers is to identify which consumers are willing to pay more
for environmentally friendly products. It is apparent that an enhanced knowledge
of the profile of this segment of consumers would be extremely useful. Efforts to
identify environmentally friendly consumers can be traced back to the early 1970s.
as well as Anderson and Cunningham, were pioneers in studying the profile of
socially responsible consumers. Overall, their combined results portray a highly
socially conscious person as female, pre-middle aged, with a high level of
education (finished high school) and above average socioeconomic status.
LOHAS
LOHAS stands for Lifestyles of Health and Sustainability, and describes an integrated, rapidly
growing market for goods and services that appeal to consumers whose sense of environmental
and social responsibility influences their purchase decisions. The Natural Marketing Institute‘s
(short: NMI) estimates the US LOHAS consumer market of products and services to be USD
209 billion – sold across all consumer segments.
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The five LOHAS segments as defined by NMI include:
1. Lohas: Active environmental stewards dedicated to personal and planetary health. These
are influence others heavily.
2. Naturalites: Motivated primarily by personal health considerations. They tend to
purchase more LOHAS consumable products vs. durable items.
3. Drifters: While their intentions may be good, DRIFTERS follow trends when it is easy
and affordable. They are currently quite engaged in green purchasing behaviours.
4. Conventionals: Pragmatists who embrace LOHAS behaviour when they believe they can
make a difference, but are primarily focused on being very careful with their resources
and doing the ‗right‘ thing because it will save them money.
5. Unconcerned: Either unaware or unconcerned about the environment and societal issues
mainly because they do not have the time or the means – these consumers are largely
focused on getting by.
Life Cycle Assessment
During the late 1980's also new instruments such as life cycle assessment (short: LCA) were
invented which allowed ecological considerations to be introduced into marketing decisions.
The life cycle assessment model seeks to identify the main types of environmental impact
throughout the life cycle of a product. LCA was developed according to ISO 14040. The main
goal of the LCA is to define the energy and environmental profile of the finished products. The
reasons to use LCA arose from the need to have a precise process accounting and to highlight
potential improvements that could be used in order to increase the environmental, energy and
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economic efficiency and overall effectiveness of the processes. In addition, the purpose was to
quantify the environmental advantages deriving from the use of recycled raw material.
Bio-fuels in green marketing
Biofuel is defined as solid, liquid or gaseous fuel obtained from relatively recently lifeless
biological material and is different from fossil fuels, which are derived from long dead biological
material.
There are 2 common strategies of producing liquid and gaseous agrofuels.
1. Grow crops high in sugar (sugar cane, sugar beet]) or starch (corn/maize), and then use yeast
fermentation to produce ethyl alcohol (ethanol).
2. Grow plants that contain high amounts of vegetable oil, such as oil palm, soybean, algae,
jatropha, or pongamia pinnata. When these oils are heated, they can be burned directly in a diesel
engine, or they can be chemically processed to produce fuels such as biodiesel.
Generation of Bio-fuels
1st Generation Bio-fuels
First generation biofuels are edible (both by humans and livestock) seeds or grains that are
fermented or pressed to create oil which is used as biofuel.2/06/2009 Copyright Winfield
Corporation 2009
2nd Generation Bio-fuels
Second generation biofuels are created from non-food crops like stalks of wheat and corn and
non-edible plants like Miscanthus, Castor Oil plants, and trees like Jatropha.
Benefits:
1. Does not divert food away from humans and livestock
2. Can significantly reduce disposal problems (orange peels, sawdust).
3. Planting trees for biofuel use reverses deforestation.
4. Inhibits soil erosion
3rd Generation Bio-fuels
Algae fuel, also called oilgae or third generation biofuel, is a biofuel from algae. It produces 30
times more energy per acre than land crops such as soybeans and algae is easy to grow, however
algae oil is hard to extract.
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Biofuel Program
Biofuel crops
Biodiesel Stoves
Oil Filtering
Education
Food Crops
Example for LCA
LCA is used for example in the building sector. Buildings today account for the 40% of the
world‘s energy use. The resulting carbon emissions are substantially higher than those of the
transportation sector. New buildings using more energy than necessary are being built every day,
and millions of today's inefficient buildings will remain standing until at least 2050. It‘s therefore
necessary to start reducing energy use in new and existing buildings in order to reduce the
planet's energy-related carbon footprint. Growing interest, space, and attention in the architecture
sector are directed to environmental issues according to the principles of green building. Mineral,
vegetable, or animal materials such as perlite, vermiculite, rock wool, glass wool, cork, plant
fibers (cotton, flax, hemp, coconut), wood fiber, cellulose, and sheep's wool can be used for the
production of insulation panels.
Examples of Green Marketing
Phillips's "Marathon" CFL lightbulb
Philips Lighting's first shot at marketing a standalone compact fluorescent light (CFL) bulb was
Earth Light, at $15 each versus 75 cents for incandescent bulbs. The product had difficulty
climbing out of its deep green niche. The company re-launched the product as "Marathon,"
underscoring its new "super long life" positioning and promise of saving $26 in energy costs
over its five-year lifetime.[34] Finally, with the U.S. EPA's Energy Star label to add credibility as
well as new sensitivity to rising utility costs and electricity shortages, sales climbed 12 percent in
an otherwise flat market.
Car sharing services
Car-sharing services address the longer-term solutions to consumer needs for better fuel savings
and fewer traffic tie-ups and parking nightmares, to complement the environmental benefit of
more open space and reduction of greenhouse gases. They may be thought of as a "time-sharing"
system for cars. Consumers who drive less than 7,500 miles a year and do not need a car for
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work can save thousands of dollars annually by joining one of the many services springing up,
including ZipCar (East Coast), I-GO Car (Chicago),[36] Flex Car (Washington State), and Hour
Car (Twin Cities).
Electronics sector
The consumer electronics sector provides room for using green marketing to attract new
customers. One example of this is HP's promise to cut its global energy use 20 percent by the
year 2010. To accomplish this reduction below 2005 levels, The Hewlett-Packard
Company announced plans to deliver energy-efficient products and services and institute energy-
efficient operating practices in its facilities worldwide.
Products & Services
Now companies are offering more eco-friendly alternatives for their customers. Recycled
products for example, are one of the most popular alternatives that can benefit the environment.
These benefits include sustainable forestry, clean air, energy efficiency, water conservation, and
a healthy office. One example, is the E-commerce business and office supply
company Shoplet which offers a web tool that allows you to replace similar items in your
shopping cart with greener products.
Introduction of CNG in Delhi
New Delhi, capital of India, was being polluted at a very fast pace until Supreme Court of
India forced a change to alternative fuels. In 2002, a directive was issued to completely
adopt CNG in all public transport systems to curb pollution.
Green Marketing Difficulties
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.
1. Perception that eco-friendly products are not as good as other products.
2. Overuse, everyone is suddenly trying to position their company as green and that their
products are eco-friendly.
3. Lack of standards / public agreement. What is green?
4. "Green washing"
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McDonald’s Counters Criticism With Green Marketing Effort
Fast food giant McDonald‘s is trying to show consumers its ―greener‖ side with a new
institutional marketing effort, ―Global Best of Green.‖
The full report details about 80 McDonald‘s initiatives around the world, such as:
About 80 percent of packaging used by McDonald‘s Europe comes from renewable
resources.
In Canada, switching from bleached white napkins to plain brown has saved $1.3 million
annually, while reducing energy, wood and water use.
U.S. restaurant locations recycle about 13,000 pounds of used cooking oil per year, on
average.
Using a fryer that requires less oil allows restaurants to cook the same product with 40
percent less oil, saving 4 percent in energy over other fryer models.
U.S. locations completing an energy survey identify savings of $3,000-6,000.
McDonald‘s USA recognizes ―Energy All-Stars,‖ or store managers that have provided
examples for others.
In France, 10 restaurants that have committed themselves to an interactive software,
EcoProgress, have reduced electricity consumption 11 percent over a few months.
McDonald‘s Mexico is testing solar hot water heaters in four locaitons to reduce use of
liquified petroleum gas, with a correspondnig 2.7 percent decrease in monthly LP gas
consumption and a 19 percent drop in carbon emissions.
McDonald‘s Sweden is using CO2 detectors in 24 restaurants to adjust ventilation
systems to the amount of customers in the store, reducing electricity use 15 percent
annually.
McDonald‘s Europe is serving salads in cardboard bowls instead of plastic dishes, and
wooden coffee stirrers instead of plastic.
In the U.S., decreasing the weight of polyproylene cold cups has decreased costs by 6
percent and saved nearly 1,000 tons of resin.
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Various anti-littering marketing campaigns have been implemented in Portugal, Italy,
Switzerland, the UK, Australia, Germany and other nations.
A variety of different waste and recycling bins have been tested in certain countries. A
German model achieved a 90 percent recycling rate.
Restaurants in Switzerland feature a separate recepticle for organic waste, which is sold
to Kompogas, which ferments the waste into biogas.
Despite its efforts, McDonald‘s has been criticized for the waste it creates around the world.
In the UK, McDonald‘s is responsible for 29 percent of all takeaway litter, according to The
Mail.
Greenpeace has alleged that the Brazilian soya that McDonald‘s feeds its chickens is
responsible, in part, for the destruction of rain forest lands, according to Wikipedia.
Eric Schlosser‘s 2001 book Fast Food Nation claimed that McDonald‘s uses political influence
to put profits before people‘s health and the social conditions of its workers.
Back in 1990, London Greenpeace, which bears no connection to the international pressure
group Greenpeace, distributed leaflets entitled ―What‘s wrong with McDonald‘s?‖, criticizing
its environmental record, among other things. McDonald‘s sued the group for libel, resulting in
one of the longest-running civil cases in British history.
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CONCLUSION
Green marketing is based on the premise that businesses have a responsibility to satisfy human
needs and desires while preserving the integrity of the natural environment. Indeed, there are
significant indications that environmental issues will grow in importance over the coming years
and will require imaginative and innovative redesign and reengineering of existing marketing
efforts on the part of many businesses. clever marketer is one who not only convinces the
consumer, but also involves the consumer in marketing his product. Green marketing should not
be considered as just one more approach to marketing, but has to be pursued with much greater
vigor, as it has an environmental and social dimension to it. With the threat of global warming
looming large, it is extremely important that green marketing becomes the norm rather than an
exception or just a fad. Recycling of paper, metals, plastics, etc., in a safe and environmentally
harmless manner should become much more systematized and universal. It has to become the
general norm to use energy-efficient lamps and other electrical goods. Marketers also have the
responsibility to make the consumers understand the need for and benefits of green products as
compared to non-green ones. In green marketing, consumers are willing to pay more to maintain
a cleaner and greener environment. Finally, consumers, industrial buyers and suppliers need to
pressurize effects on minimize the negative effects on the environment-friendly. Green
marketing assumes even more importance and relevance in developing countries like India.
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BIBLIOGRAPHY
Books
Kothari C.R., Research Methodology, New Age International Publishers ―Revised
Second Edition‖
2). Raju B.N. Human Resource Management, Discovery Publishing House ― First Edition‖.
3). Chhabra T.N. Human Resource Management, Dhanpat Rai & Co.―Fifth Revised
Edition‖.
Sites
4). http://www.google.com/
5). http://www.humancapital.com/
6). http://www.OpenLearningWorld.com/
7) http://www.wikepedia.com/
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