Green strategies and green marketing.

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Link to this page 1. INTRODUCTION For many decades, human kind has been clearing forests, burning coal, emitting carbon dioxide, and other harmful chemicals into the atmosphere at a far greater rate than trees and oceans can balance. The carbon dioxide level is higher than it has been since the beginning of time. As a result, temperatures have risen and ice caps are slowly melting away. The causes of these disasters are inherently caused by human activities (Appenzeller and Dimick, 2004). In recent times, more focus has been geared towards environmental issues such as global warming. Climate changes have brought attention to people all over the world to take action in slowing down the causes of the ongoing global warming crisis. In order for businesses to respond to climate change, companies have gradually been changing ways of doing business to decrease the negative impact on the environment. While most corporations have already implemented some form of green strategies, the majority have yet to respond to the global crisis. In addition, other laws such as Assembly Bill No. 32 have mandated companies to adopt greenhouse gas emission measures to minimize greenhouse gas emissions by year 2012. Companies must understand the importance of going green and construct enterprise-level green strategies that best fit their business (Olson, 2008). Consumer awareness of going green has also brought demand for green products. This in turn will encourage and force companies and businesses to incorporate green alternatives to products and services. Statistical analyses of consumer behaviors have shown that customers are willing to pay a higher premium for a greener product (Czamowski, 2009). Ads by Googlemarketing Degrees Online MS in marketing Online Course Top London School, Apply Now!
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In the short term, going green might mean higher costs, the long term benefits heavily outweighs the initial costs of going green. As environmental awareness grows, a new trend of marketing strategy will take its place. This strategy, known as the green strategy, will ultimately dominate in the near future. 1.1 Purpose of study While some companies have already implemented some sort of strategies for going green, the majority of the companies have little to no plans in going green. Even fewer companies have enterprise level strategies for going green. The purpose of this report is to provoke thought about the potential destructiveness of global warming and what business can do to prevent further damage to our eco-system. This study would further focus on green strategies and green marketing and their importance for corporations. Corporations can learn from this research paper about the benefits of going green. In addition, the companies should not only take on the initiative of going green but should also take on the responsibility of educating consumers on going green or demanding for greener products. With these changes, our ecosystem and environment can maintain a healthier lifestyle. The research would address issues such as the following: * What are green strategies and enterprise-level green strategies? * Ways for corporations going green * How green strategies can help businesses operate more efficiently * Driving forces for corporations to go green

1996). Some companies simply implement energy-efficient equipments while some companies change the way of their operation and manufacturing.. 2. The extra cost of five percent comes from green strategies such as. 2006). green marketing encompasses a wide scope of actions some of which include product modifications. WAYS TO PRACTICE GREEN In order to minimize negative impact on the environment.1 Green strategies "A green strategy facilitates decisions and transformation initiatives that improve the environment" (Olson. 2008). Take the world famous Sheraton for example. As a company sides with going green. LITERATURE REVIEW 2. Ibanez.5 Green products A product is considered "green if it operates cleaner or saves money and energy" compared to its non-green counterparts (Shi. 2. and non-profit organizations change behaviors and decisions on a more responsible way--environmentally. 2. 2006). recycling. some businesses try to change the behavior of consumers. Ibanez. n. Sheraton hotel in Chicago for instance has been asking all guests to use the same towels and linens for hotel stays of over one night. Many buyers who seek to go green are there for obvious reasons. Bringing environmental awareness can help tip the scale for those hesitating on going green (Hartmann. In the long run. 2. 2007). Kane.2 Go green "Practicing green is inherently proactive. there is basically a strategy known as the "enterprise-level green strategy.d). a green strategy is a good way to invest in future energy alternatives for big or small companies alike. An example of implementing a green strategy for a corporation is to change all office light bulbs to energy efficient light bulbs. Green marketing also helps to build green brands for products and helps to maintain sustainability of products along the product life cycle. 1996). While some businesses change their way of conducting business. 2. The best marketing strategy for getting people/companies to go green is to let the consumers be aware of the positive effect of the product to the environmental. Having a clear vision to go green ultimately leads a company in the right direction of making good decisions (Olson. Some of these reasons include health improvement. and advertisement modification (Guides for the use of environmental marketing claims. the hotels will assume that no replacement in towels and lines are . 3. n. Many companies have emerged to produce green products to sell to consumers who make buying decisions based on environmental criteria. corporations.6 Green consumers Public surveys given out in the United States indicate that an average consumer is willing to pay up to five percent more for greener products.4 Green markets Going green has actually been a huge development in many countries. and saving the environment. more companies will attempt to dip into this green market segment to become the pioneer and dominant supplier (Hartmann. For companies seeking to go green. or redesigning of existing products (Kassaye.3 Green marketing Green marketing is the promotion of products or services in a way that encourage environmental safety." Businesses could practice green by voluntarily recycling and attempting to reduce wastes and the amounts of resources they consume in their daily operations (Shi. it will reduce energy bills and help improve the environment. lowering cost of bills. Unless guests indicate to have their towels and linens replaced daily. 2001). Consequently. reducing. 3. the enterprise-level green strategy should formulate ideas and address the question of environmental friendliness. From business point of view. This minor change can help the environment and bring down the cost of operation (Jennings.d. As the market grows. 2008).). reusing. These examples will be explained more in detail next. Kane." An enterprise-level green strategy helps a company make decisions based on its impact to the environment. Like any other company strategies.1 Switching to energy efficient equipment Small actions taken to go green and save energy can bring big benefits for companies. socially and economically (Green strategies. Green Strategies help individuals. other benefits such as social responsibility and cost of bills will also be positively affected. companies from different sectors are participating in being green in various ways. changes of product process and packaging. before being forced to do so through government regulations.* Corporations going green under different pressures * The emerging green markets and green consumers * How to improve green marketing * How to execute green strategies 2. it means finding ways to reduce waste and other-wise be more environmentally responsible.

From a consumer's point of view. A company's image often accurately reflects its attitude in taking responsibility with its products and services. Starbucks has had increased revenue along side higher employee productivity (Starbucks. DRIVINE FORCES FOR GOING GREEN There are many driving forces that motivate people to go green. By switching to green packaging. 2001). other laws such as Assembly Bill No. thus largely gaining competitiveness over competitors. 2007). In addition. this conservation program could help reduce the usage of 1 billion BTU of energy and 2. and safer (Brandt. their movements have attracted public attention and brought good reputation to their business. Many companies tend to be focused on accumulating huge profit margins at the expense of the environment. 3. It is especially important to take on the responsibility of going green because our environment in the long term will be more stable and healthy. healthier. Indeed.2 Government and environmental regulations compliance More and more government regulations have been slowly gone into place to prevent the effects of global warming and other environment hazards. Starbucks for example. In turn. in other world the IT capacity can be doubled without increasing costs. 4. Albertsons and Ralphs have been encouraging customers to use their reusable bags for grocery shopping. going green is also a good way to invest in the future. At the same time. This "feel-good factor" helps build employees moral knowing that their company is doing all they can to go green. corporations will allow their products to gain a competitive edge will at the same time improving their public image (Kassaye. The operational costs can be reduced by 50 percent off. cost of operations could lower significantly. Many corporations have started what is known as a "feel-good factor" as an inventive for maintaining a clean environment. Many business's have started early by taking immediate actions in going green (AB No.1 million galls of water per year (Kassaye. Hybrid vehicles have been more popular for business transportation and product distribution these coming years and automobile companies have been the major force for staying competitive. 3. Implementing green strategies will allow corporations to be more efficient in manufacturing. An example of a success story is one carried out by a big company. This project is essentially a 1 billion dollar investment to drastically increase the efficiency of IBM products. 2007). With green strategies in place. According to hotel estimates. As a company heads towards becoming green. As the energy crisis escalates over these past years. Hybrid vehicles have several incentives which are attractive to people looking to purchase a car. the hybrid car reduces carbon dioxide emission into the atmosphere. 4. its image for being environmentally friendly will build through time. Roth. 1996). Kane.3 Greener the way of operation: Green packing Green packaging is defined as a way to package parts in safe way that minimizes impact to the environment. Starbucks has saved over 118. has started using hot beverage cups that made of ten percent post-consumer recycled fiber(PCF) in order to cut wood usage and waste.000 trees since the time of change. Strict regulations such as heavier punishments for those who purposely break the law and government subsidies for companies that encourage a greener environment through the use of new technology are among some of the new incentives put into place (Shi.2 Adopting renewable energy and cleaner technology In addition to reducing costs. (Bansal. packaging is probably the first and biggest action a company can take in practicing green (Shi. Many investors and companies have now been trying to develop new sources of renewable and clean technology. by way of resources reducing or costs saving. This in turn leads to higher employee productivity.necessary. Companies should be held accountable for maintaining a clean environment while at the same time generating profit margins. A great example of this new invention is the well known Toyota Prius hybrid car. 32). This is important because it will slow down the usage of new resources which will allow for higher sustainability with the current allocated amount of resources. IBM products and services that follow the steps deemed necessary for Project Big Green will cut energy usage by an estimated 42 percent. 1996). Businesses can start from evaluating its manufacturing process and looking for where waste can exist in an organization. 2001). 2000). Profit margins will rise as consumers become more aware of a company's green oriented image. 4. 2009). 2001). Green packaging also involves recycling and reducing packing materials (Kassaye. Alongside of saving gas. To survive in this very competitive environment.1 Increased competitive advantages The business world is a world that is very realistic in a sense that the free market cuts those who are unprepared and uplifts those who are strong. carbon emissions are decreased. 32 have mandated companies to adopt greenhouse gas emission measures to minimize greenhouse gas emissions by year 2012. The government is also encouraging companies to go green in order to decrease any harmful effect on the environment. Kane. and most importantly. reputation as a company going green would also build up leading to a better competitive edge. It is only a . Several grocery stores such as Trader's Joe. consumers will also feel better about purchasing or using a product knowing that it is cleaner. Although the costs of these cups are a bit higher compared to the less recyclable ones. Implementing green strategies brings multiple benefits for companies including a bigger profit margin alongside impenetrable reputation. government authorities have been considering enforcing new policies which restricts the amount of carbon emissions. In addition. IBM a high tech company has launched its newest project "Project Big Green" in efforts to reduce the energy consumption. gaining a competitive edge is very important. "It is a win-win-win for all" (Molloy.

USDA Certified. This trickle down strategy educates consumers about environmental hazards and lets them be aware of green products. In general. environmental concern. 5. climate change and other potential problems of using non-green products.1 Sources of pressure The pressure to go green is often demanded by consumers.matter of time before all companies are required to go green. these companies will eventually cut costs and gain a competitive edge compared to companies taking no actions (Kassaye. 6. 2008). corporations go green for the desire of a more comprehensive and environment oriented program. initiate change. * No action The no action plan is one that describes companies who do not have an active green strategy. Take the hybrid car for example. This in turn creates an environment for consumers to buy green products. To say the least. 2001). 2001). 2001). Meeting the competition essentially means waiting for other companies to take action on going green. Recycled Logo. 5. small companies want to go green given that costs can be reduced and fear of violating government regulations (Kassaye. Certain labels on products can help increase its awareness to consumers. the pursuit for going green is driven by the fact that costs can be lowered leading to better financial goals. EMERGING GREEN MARKETS AND GREEN CONSUMERS IN THE FUTURE 6. Over 60 percent of companies have taken the initiative to come up with green programs. many consumers are still unaware of green products that are available in the market. the motive for going green are likely to be driven by pressures from consumers. the costs and competition and government regulation is the driving force for going green. The size of the firms (sales revenue) and whether a firm primarily manufactures consumers good also factors in to its strategy for going green (Kassaye. meet the competition (Kassaye. 2001). 2008). and cost saving opportunities have influenced firms to go green or not at all (Banerjee. competition will eventually drive these companies to meet the competition (Kassaye. * Initiate change On the contrary to doing no changes.1 Changing consumer behaviors Changing consumer behavior is often the fastest way to green. reported ever buying a green product. Some of the first companies to benefit from gong green include Wal-Mart's Eco-store and McDonald's McRecycle. In 2007 the market share of a hybrid was only about 2 percent. 2001). Oppenheim. According to a recent report by McKinsey survey. * Meet the competition The final plan of choice is to meet the competition. Pressure from government regulation. a chain store survey reports that 25 percent of 822 people surveyed in the U. By educating consumers to go green. some companies opt to take immediate change for going green.2 Obstacle in marketing green products In 2007. The 3 choices includes no action. Nonprofit organizations should also take on the responsibility to inform citizens about the benefits of going green (Bonini. The reason behind taking no immediate action is primary due to the fact that companies hope that this problem will be diluted and forgotten over time. with Energy Star and Recycled Logo receiving the most impact with 66 percent and 54 percent most likely to purchase respectively. 2001). There are many reasons that influence upper level management in their decision to go green. 80 percent of consumers worry about global warming and environmental issues impacted by the products they purchase. This is of course with its difficulties due to the limited amount of budget usually allocated in marketing green products. Eventually. corporations can get their products certified with the Energy Star or Recycled Logo label (Environmental Leader. and Fair Trade Certified are among the most successful Eco-labels available. If other companies are taking action on going green. the need for better consumer-provider relation and cost concerns. By not taking action however. These companies are ones that decide to not derive an immediate green plan. 2001). For large firms. By doing so. Oppenheim. Therefore to make a product more revealing and persuasive. data findings reveal that corporations go green for other reasons. public concern. Lastly. big and small companies alike are forced to produce and market green products demanded by consumers (Kassaye. many valuable experience of going green and customer reputation may be reflected in the financial book sin the long run (Kassaye. 2001). For mid-size companies.S. CORPORATIONS GOING GREEN UNDER DIFFERENT PRESSURES While many people believe that the reason for going green is generally demanded by the consumers. 6. Most of all.2 Response to green actions Going green is a choice for all firms to make and essentially there are 3 actions of choice. Corporations should make more efforts in advertising and educating their green products that are out in the market.3 Influence of Eco-label Another interesting finding is that products with Eco-label also have influence on consumer behaviors. 6. . 2008). More details about these 3 plans of action will be discussed in the latter part. The study also points out that 33 percent of the consumers are willing to pay a small price premium on green products (Bonini. A study from the Natural Marketing Institute reveals that Energy Star. 5. corporations will need to rethink strategies that involve consumer awareness of global warming.

A successful marketing strategy is one that sells a product successfully at a lower cost. By adopting green marketing. For example. With lower maintenance and operation costs. It is strongly suggested for a company to go with green strategies. 32 (2006). Over the past 30 years. In 2010. 2001). companies can gain a good public image while at the same time giving their products a competitive edge. restaurants and retail stores produce roughly 33 percent of all waste generated in the U. <http://ngm. By spending the effort and time in developing green products." Management Decision. * Businesses like offices. T. corporations could start from implementing green strategy in the office. & Dimick. and cleaner environment can be achieved. 2001). This is the key in sustaining the life cycle of a product (Kassaye.nationalgeographic. * Office paper is ranked third among top paper waste generating categories. Many have started to take action in going green by coming up with green strategies that will help reduce waste and energy. more marketing strategies and budgets should given to promote these green products. companies from different business sectors all need to focus on green marketing. shareholders and customers. If indeed consumers are willing to spend a little bit more on environmentally friendly products. The benefits of a company going green are beyond reproach. sales will rise. REFERENCES: Appenzeller. Along with lowered carbon dioxide emissions and less waste production.6 pounds more garbage compared to 30 years ago. 8. The demand for improved environmental performance has been greatly increased over the years due to the many benefits it brings (Banerjee. Secondly.S. Companies that take the initiative to plan for going green early will ultimately have a better competitive edge when regulations mandate green strategies in corporations. It is one of the fast growing paper waste generating sources. consumers will start to demand for greener products. In addition. if a company owns a fleet of cars and needs to change cars.1 Office fact sheet Recycling is one way to go green and a very important way to be environmentally safe. Nowadays consumers are more aware of environmental issues and the importance of going green. R. 39(1). In return. With the right amount of awareness and marketing. This is mainly due to a population increase but also garbage generation has increased (Shi and Kane. It can also retain customer loyalty. Banerjee. as more and more companies go green. 36. Here are some facts about how much garbage is produced yearly and how much potential can be reached from recycling. 488. customers will be more willing to make a change to support green products (Kassaye." National Geographic. 2001). The reason for green marketing is to help educate the consumers on the benefits green products bring. Small changes in recycling habits for small or big companies can make a big difference in keeping the environment safe.4 percent of all paper waste will be generated by office papers. green products can help cut costs and reduce harmful emission into our atmosphere. In the long run. it is estimated that 6. CONCLUSION Many companies have been under the pressure to meet environmentally friendly policy as well as increasing sales. thus driving the market to produce green products from the demands.7. the cost of operating these vehicles will also be reduced. marketing strategies can be geared to deliver these products at a lower cost. using hybrid vehicles can be a good option for saving gas and emitting less pollution. Environmental concerns should be considered in all processes or marketing. Setting new green goals or making changes can help identify the non-green operational parts of a company. Using newer technologies that create less waste can also help a company go green. a part of the pressure and competition will be how fast and efficient a company is in going green. MANAGERIAL IMPLICATIONS The environmental impact of business activity has been a major factor for corporations. costs will be lowered. 8. 2001. History alone thus far has proven that going green is beneficial not only to the environment but also to the overall health of a company. 1996). businesses can make manufacturing processes more efficient by reducing unnecessary materials. "Corporate Environmental Strategies and Actions. "Global Warning: Signs from Earth. 1-13. In essence. . To help keep the environment clean. 9. going green can ultimately help a company reduces its costs and increase business opportunities. (2004). MARKETING OF GREEN PRODUCTS Successful marketing of green products can help boost a company's image and reputation. "California Global Warming Solutions Act (AB 32). (2001). The earlier a company starts to go green the higher the chances of the company staying competitive and meeting green legislations in the future. the US garbage volume has grown from 88 million tons to 196 tons per year dating back to 1960. Lastly." Health & Safety Code. * US residents produce 1.com/ngm/0409/feature1/> Assembly Bill No. S.

com/2008/05/20/ green-labelspositively-impact purchase-behavior/?graph=full>. 444-435. "Green Issues. (2006). 717-734." Brand Strategy. 28-33. Kassaye. 24(7). Shi. "A World Gone Green. Jennings. 65-70." McKinsey Quarterly. Czamowski. (N/A).org> Guides for the use of environmental marketing claims (N/A). Starbucks Coffee Company (2009).greenstrategies. W.gov/bcp/grnrule/guides980427.starbucks." <http://www. "Eco-Friendly Ways Bring in Green. 29(2). 90-94. Green strategies. (2007). 673." <http://www. <http://www. "Why Companies Go Green: A Model of Ecological Responsiveness.pdf> Brandt. J. & Ibanez. (2008). Molloy C. V.edu/isom/docs/isomforum2008_ProjectBigGreen. 2008." <http://www. "Ethics Still Strong in A Cold Climate.Bansal. USA Sittiwat Kamkatwong. (1996). L.pdf> Olson. 19(6/7). "Guides for The Use of Environmental Marketing Claims. 39(1). & Roth. "Green Labels Positively Impact Purchase Behavior. "Starbucks Shared Planet." McKinsey Quarterly . (2008). "Green Value Added.htm#260. D. S & Oppenheim. Environmental Leader (2008)." Marketing"Intelligence & Planning.com/sharedplanet/environmentalinternal. (2000)." Industrial Engineer. 2007. California State University-Fullerton.com/clientservice/ccsi/pdf/ helping_green_products_grow. E. 2000." The Journal of Business Strategy.cba. J. USA Peng Chan." <http://www.ufl.aspx? story=papercups> Katherine Liang. 2009. DBS Bank." Business Horizons. K. 2006." Academy of Management Journal. P. (2007) "IBM Data Centers-Implementation of Project Big Green. "Helping "Green" Product Grow." Marketing Intelligence & Planning. (2009). P. 52. (2007). 22-30. J. (2001)." <http://www. California State University-Fullerton. Bangkok. "Green Strategies. "Green Delimma.ftc. Bonini. A. 43(4).7> Hartmann. 39(9). Thailand . "Creating an Enterprise-Level Green Strategy.environmentalleader.mckinsey. & Kane.

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