GREEN MARKETING OPPORTUNITIES & CHALLENGES

BY

Miss. P. PIRAKATHEESWARI, Lecturer in Commerce,

Sri Sarada College for Women (Autonomous), Salem 16.

"Progress is possible, No one can stop it, but obstacle is there, we

have to face it."

- Amartya Sen

Introduction

Yes, green marketing is a golden goose. As per Mr. J. Polonsky,

green marketing can be defined as, "All activities designed to
generate and facilitate any exchange intended to satisfy human
needs or wants such that satisfying of these needs and wants
occur with minimal detrimental input on the national
environment."
Green marketing involves developing and promoting products and
services that satisfy customers want and need for Quality,
Performance, Affordable Pricing and Convenience without having
a detrimental input on the environment.

Meaning

Green marketing refers to the process of selling products and/or

services based on their environmental benefits. Such a product or
service may be environmentally friendly in it or produced and/or
packaged in an environmentally friendly way.

The obvious assumption of green marketing is that potential

consumers will view a product or service's "greenness" as a
benefit and base their buying decision accordingly. The not-so-
obvious assumption of green marketing is that consumers will be
willing to pay more for green products than they would for a less-
green comparable alternative product - an assumption that, in my
opinion, has not been proven conclusively.

While green marketing is growing greatly as increasing numbers

of consumers are willing to back their environmental
consciousnesses with their dollars, it can be dangerous. The
public tends to be skeptical of green claims to begin with and
companies can seriously damage their brands and their sales if a
green claim is discovered to be false or contradicted by a
company's other products or practices. Presenting a product or
service as green when it's not is called green washing.
Definition

According to the American Marketing Association, green

marketing is the marketing of products that are presumed to be
environmentally safe. Thus green marketing incorporates a broad
range of activities, including product modification, changes to the
production process, packaging changes, 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.

The legal implications of marketing claims call for caution.

Misleading or overstated claims can lead to regulatory or civil
challenges. In the USA, the Federal Trade Commission provides
some guidance on environmental marketing claims.

Three keys to successful green marketing

Show potential customers that you follow green business

practices and you could reap more green on your bottom line.
Green Marketing isn't just a catchphrase; it's a marketing strategy
that can help you get more customers and make more money. But
only if you do it right.

Ads by Google
For green marketing to be effective, you have to do three things;
be genuine, educate your customers, and give them the
opportunity to participate.

1) Being genuine means that a) that you are actually doing what
you claim to be doing in your green marketing campaign and b)
that the rest of your business policies are consistent with
whatever you are doing that's environmentally friendly. Both
these conditions have to be met for your business to establish the
kind of environmental credentials that will allow a green
marketing campaign to succeed.

2) Educating your customers isn't just a matter of letting people

know you're doing whatever you're doing to protect the
environment, but also a matter of letting them know why it
matters. Otherwise, for a significant portion of your target market,
it's a case of "So what?" and your green marketing campaign goes
nowhere.

3) Giving your customers an opportunity to participate means

personalizing the benefits of your environmentally friendly
actions, normally through letting the customer take part in
positive environmental action.

Evolution of Green Marketing

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.

Why Green Marketing?

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.

Benefits of Green Marketing

Companies that develop new and improved products and services
with environment inputs in mind give themselves access to new
markets, increase their profit sustainability, and enjoy a
competitive advantage over the companies which are not
concerned for the environment.

Adoption of Green Marketing

There are basically five reasons for which a marketer should go

for the adoption of green marketing. They are -

* Opportunities or competitive advantage

* Corporate social responsibilities (CSR)

* Government pressure

* Competitive pressure

* Cost or profit issues

Green Marketing Mix

Every company has its own favorite marketing mix. Some have 4
P's and some have 7 P's of marketing mix. The 4 P's of green
marketing are that of a conventional marketing but the challenge
before marketers is to use 4 P's in an innovative manner.

Product
The ecological objectives in planning products are to reduce
resource consumption and pollution and to increase conservation
of scarce resources (Keller man, 1978).

Price

Price is a critical and important factor of green marketing mix.

Most consumers will only be prepared to pay additional value if
there is a perception of extra product value. This value may be
improved performance, function, design, visual appeal, or taste.
Green marketing should take all these facts into consideration
while charging a premium price.

Promotion

There are three types of green advertising: -

Ads that address a relationship between a product/service

and the biophysical environment

Those that promote a green lifestyle by highlighting a

product or service

Ads that present a corporate image of environmental

responsibility
Place

The choice of where and when to make a product available will

have significant impact on the customers. Very few customers will
go out of their way to buy green products.

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

Challenges Ahead

Green products require renewable and recyclable material,

which is costly

Requires a technology, which requires huge investment in R

&D
 Water treatment technology, which is too costly

Majority of the people are not aware of green products and

their uses

Majority of the consumers are not willing to pay a premium

for green products

Some Cases

McDonald's restaurant's napkins, bags are made of recycled

paper.

Coca-Cola pumped syrup directly from tank instead of plastic

which saved 68 million pound/year.

Badarpur Thermal Power station of NTPC in Delhi is devising

ways to utilize coal-ash that has been a major source of air and
water pollution.

Barauni refinery of IOC is taken steps for restricting air and

water pollutants.

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 more eco-responsible, think again. You must find an
opportunity to enhance you 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.

References:

1. Chopra, S. Lakshmi (2007), "Turning Over a New Leaf", Indian

Management, Vol-64, April-2007

2. Ottman, J.A. et al, "Avoiding Green Marketing Myopia",

Environment, Vol-48, June-2006

3. www.greenmarketing.net/stratergic.html

4. www.epa.qld.gov.au/sustainable_ industries

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2

onventional marketing is out. Green marketing and what is

increasingly being called "sustainable branding" is in. According
to the new rules of green marketing, effectively addressing the
needs of consumers with a heightened environmental and social
consciousness cannot be achieved with the same assumptions
and formulae that guided consumer marketing since the post-war
era. Times have changed. A new paradigm has emerged,
requiring new strategies with a holistic point of view and eco-
innovative product and service offering.

New Game, New Rules

Historically, marketers developed products that met consumers'

needs at affordable prices and then communicated the benefits of
their brands in a memorable way. Paid media campaigns
characterized by ads with catchy slogans were de rigueur. Green
or "sustainable" marketing and branding is more complex. It
addresses consumers' new heightened expectations for
businesses to operate and requires two strategies:

1. Develop products that balance consumers' needs for quality,

performance, affordability, and convenience with the lowest
impact possible on the environment, and with due concern for
social considerations, e.g., labor, community.
2. Create demand for the resulting brands through credible,
values-laden communications that offer practical benefits while
empowering and engaging consumers in meaningful ways about
important environmental and social issues. These
communications represent value to consumers for what they
provide functionally and what they represent, and often positively
reinforce the manufacturer's track record for sustainability as
well.

The new rules being laid down by today's eco-conscious

consumers cannot be addressed with conventional marketing
strategies and tactics. Brand builders in the 21st century are
accountable to tough new standards. Sustainability represents
deep psychological and sociological shifts -- not to mention
seismically important issues -- as did one of its predecessors,
feminism, which forced marketers to develop more convenient
products in step with two-income lifestyles and to portray women
with a new respect.

Beware "Greenwash"

Meeting the challenges of today's level of green consumerism

presents its own mandates for corporate processes, branding
practices, product quality, price, and promotion. To realize that
the rules of the game have changed in a big way, one need only
recall the unsavory backlash that is now occurring over what is
perceived by environmentalists, regulators, and the press as
inconsistent and often misleading eco-labels and messages.
The resulting deluge of skepticism, confusion, and regulatory
nightmares that spurious green claims -- dubbed "greenwash" --
are spawning in the marketplace proves that environmental
marketing involves more than tweaking one or two product
attributes and dressing up packages with meaningless and often
misleading claims. Too many marketers are learning the hard way
that leveraging environment-related opportunities and addressing
sustainability-related challenges requires a total commitment to
greening one's products and communications.

Green marketing done according to the new rules also affects how
a corporation manages its business and brands and interacts with
all of its stakeholders who may be affected by its environmental
and social practices.

The seven strategies for green marketing success

Under the new rules, the currency of sustainable branding is

innovation, flexibility, and heart. I have formulated seven
strategies which I believe can help businesses address these
deep-seated and lasting changes in consumer sensibility.
Reflecting our learning from working with sustainability leaders
over the past 20-plus years, they can be summarized as follows:

1. Understand the deeply held environmental and social beliefs

and values of your consumers and other stakeholders and
develop a long-term plan to align with them.
2. Create new products and services that balance consumers'
desires for quality, convenience, and affordability with minimal
adverse environmental and social impacts over the life of the
product.

3. Develop brands that offer practical benefits while empowering

and engaging consumers in meaningful ways about the important
issues that affect their lives.

4. Establish credibility for your efforts by communicating your

corporate commitment and striving for complete transparency.

5. Be proactive. Go beyond what is expected from stakeholders.

Proactively commit to doing your share to solve emerging
environmental and social problems -- and discover competitive
advantage in the process.

6. Think holistically. Underscore community with users and with

the broad array of corporate environmental and societal
stakeholders.

7. Don't quit. Promote responsible product use and disposal

practices. Continuously strive for "zero" impact.
3

Next Generation Marketing: An Indian Perspective

Faculty Contributor: Nagasimha Balakrishna Kanagal, Associate

Professor

Student Contributors: Manish Kumar Urele and Suman Verma

The changing profile of the Indian customer has made it

imperative for the marketer to change the way he communicates
with the customer. The next generation Indian customers are
educated, smart, equipped with technology and well informed
through various media channels available now. On one hand,
while rural markets have shown a tremendous growth Internet
advertising has become the fastest-growing segment of total ad
spending; rising at a rate of 20%1 in the first half of 2008. This
article provides an integrated marketing view on the efficient use
of next generation tactics such as blue ocean strategy, green
marketing, permission marketing, buzz marketing, social
marketing, ambush marketing etc. for the marketer to optimally
utilize these favorable trends and reap the maximum benefits in
terms of revenue growth and value creation to the customers.

India has been an attractive destination for marketers because of

its growth potential as an emerging market. The average Gross
Domestic Production (GDP) growth rate2 of India is 8.37% which
indicates that future consumption will increase. The affluence
level of the average Indian household has increased significantly.
The per capita income has doubled from the 2002 - 2003 level of
Rs. 18885 to Rs. 380843. Education level has reached to 79.9% in
2009 from a meager 34% in 19714. As shown in Exhibit 1, the
research findings of McKinsey Global Institute indicate that the
Indian consumer market is expected to quadruple by 2025,
making it the fifth largest consumer market in world5.

Exhibit 1: Growth in Indian consumer market

With the saturation of urban market, a shift towards the rural

market is evident and high growth is expected in rural
consumption. As the market is expanding, the customer is
becoming rich, educated & tech-savvy with an increasing concern
for society and environment. There are several implications for
Indian marketers from this trend.

Next-Generation Marketing Strategies

In the view of the changing profile of Indian customers, marketers

have been experimenting and utilizing different strategies to
communicate and influence the new Indian customer. A number
of techniques have been used to tap into wallets of the next
generation customer some of which are:

Social Marketing: Social marketing is a process for influencing

human behaviour on a large scale, using marketing principles for
the purpose of societal benefit rather than for commercial profit.

Viral and Buzz marketing: Any strategy that encourages

individuals to pass on marketing message to others, creating the
potential for rapid multiplication to explode the message to
thousands, to millions. Buzz marketing is a viral marketing
technique that attempts to make each encounter with a consumer
appears to be a unique, spontaneous personal exchange of
information.

Mobile marketing: Mobile Marketing is a set of practices that

enables organizations to communicate and engage with their
audience in an interactive and relevant manner through any
mobile device or network.

Blue ocean strategy: A blue ocean is created when a company

achieves value innovation that creates value simultaneously for
both the buyer and the company. The innovation (in product,
service, or delivery) must create value for the market, while
eliminating features or services that are less valued by future
market.

Green Marketing: Green marketing is the marketing of products

that are presumed to be environmentally safe so that the
customers value the product.

Ambush marketing: Ambush marketing is as undeniably effective

as it is damaging, attracting consumers at the expense of
competitors, all the while undermining an events integrity and,
most importantly, its ability to attract future sponsors.

Permission marketing: Permission marketing is an approach to

selling goods and services in which a customer explicitly agrees in
advance to receive marketing information.
However, the perception of these marketing strategies is not the
same for the marketer and the customer. An analysis of the
strategies adopted by the various marketers was done to
understand this difference.

Marketers Perspective

With the changes in lifestyle there is increased pressure on the

marketer to grab the attention of the customer. Increasing
emphasis is laid on interactive social media tools such as radio
channels, text messages and e-mails as well as social networking
sites such as Orkut, Facebook, Twitter and company blogs. These
media platforms enable the customers to discuss about the
issues, likes-dislikes and recommendations.

Increasingly Indian consumers are also aware and concerned

about the efforts companies make towards the conservation of
environment and community development. The concept of
Societal Marketing and Green marketing although decades old, is
being increasingly used in recent times. In face, companies have
started leveraging on these concepts to entice the aware
customers. The Jaago re campaign of Tata Tea, launched to
create awareness about the voting right of Indian citizen, was
very successful. ITCs camapign of donating Re. 1 towards the
education of poor students on every purchase of notebooks is an
example of new tactics used by the modern marketer.

A study of bajaj and Hero Honda in the 2-wheeler segment

presents the similar story. In the wake of the competition provided
by Hero Honda, Bajaj has completely transformed its image of
being a traditional family scooter to a younger generation bike
with marketing techniques like Bajaj pulsar stuntmania which
has been possible through the use of next generation marketing
techniques such as gaming, virals, green marketing, buzz and
rural marketing. Similarly Hero Honda has utilized these
techniques consistently to remain a market leader in the category.

Thus our marketer is entirely focussed on integrating the current

technologies with the marketing program in the form of emails,
text messages, internet blogs, networking sites etc. However the
attitude of customers towards these strategies is a bit different
from the marketers viewpoint.

Customer Perspective

The customers perspective about these strategies has been

collected and analysed through a survey about their preferences
regarding various new generation marketing strategies. A
distribution of consumer preferences for marketing strategies
utilised in Fast Moving Consumer Goods (FMCG) and Durables
segment was obtained as shown in Exhibit 2.

Exhibit 2: Consumer preference to various advertizing techniques

in FMCG

For a typical Indian customer the new technological means are

still way into the future and they are not able/willing to access
them.

The survey findings revelaed that in FMCG category the

customers value offers/discounts in the marketing efforts of the
company as their highest priority. Consumers gave a clear
distinction in terms of choosing three offerings of the marketers. A
typical consumer rates discount offers, advertisements and the
environmental benefit of a product over the other features. Mobile
text messages and e-mails proved to score the lowest among all
the offerings by marketers. For a typical Indian customer the new
technological means are still way into the future and they are not
able/willing to access them. As the executive of a leading car
manufacturing company states the customers are not very tech-
savvy, and specially the buyers of luxury products are elderly
persons who are very particular about the look and feel of the
product.

In the durable products section customers are more likely to

prefer advertisements as shown from Exhibit 3. It is because the
customers are mainly from the high end segment and less price
sensitive. Mobile text messages still have the lowest preference in
the mindset of the customers as far as marketing is concerned.

Exhibit 3: Consumer preference to various advertizing techniques

in Durables

From the qualitative analysis it is shown that the customers are

slightly inclined towards the traditional methods such as
advertising and communications using billboards.There is a need
to educate people about the advancements in marketing
techniques so that they may adapt to the more convenient and
effective strategies which are coming in place in the 21st century.

FMCG and Durables Marketing

Based on the above analysis and by mapping the marketers

perspective to the consumers preferences certain trends can be
seen.
Visual and Interactive Ads on Mobile

Although Indian customer has become technologically advanced

owing to changing demographics, as per the analysis he is still
more affected by the traditional methods of marketing. Hence,
communicating the same message to the customers on a new
technological platform will enhance its acceptability. Customers
need more visual and interactive platforms of marketing. Hence,
marketers may send innovative multi-media messages (MMS)
exhibiting the TV commercials to exploit the high mobile
proliferation among the customers.

Focus on Green Marketing

As the customer has become more educated and affluent, the

awareness regarding harmful effects of pollution and chemicals
has increased. Therefore, the companies need to develop and
emphasize their environmental friendly products in durables such
as cars and hygienically safe products in FMCG such as eatables
and soaps to tap potential customers.

Rejuvenating Customer Relationship Marketing (CRM)

In the changing trend of marketing innovations, customers should

be involved in the marketing phase to capture a greater hold over
the market. Some of these changes could be:

1. Testimonials by customers: In products like Pureit the

testimonials from customers are utilized that exhibit that they are
satisfied from the product. These strategies should be used and
improved to involve customers in the marketing of products.
 2. Inviting suggestions for added features: For FMCG products
such as Kurkure inviting recipes from customers for preparing
delicacies provides them incentives to spread Word-of-Mouth
about these products.

Focus on Rural Masses

Given the fact that rural market is booming, marketers need to

evolve and pursue rural marketing. It is desirable to provide the
products in different SKUs so that their price comes in the range
of the rural markets affordability. Demonstrations about the
product through workshops or camp based activities should be
done for the less educated rural customer. Marketers can use
innovative financial schemes to increase their reach to the rural
customer particularly in the Durables product category.

Conclusion

The income of a typical Indian customer has risen and so has their
preference for tech-savvy products. Yet, customers are still
connected to the traditional ways of marketing. They have
become more aware and have shown an inclination towards
environment-friendly products. CRM has emerged as an important
tool for marketers and it should be renovated by involving
customers in the marketing phase through testimonials. Rural
markets offer potential and need to be tapped by innovative
strategies. Thus, though India has changed but traditional
marketing strategies on new technology platforms can aid the
marketer in reaching the new customer.

Keywords
Green Marketing, Mobile Marketing, CRM, FMCG, Marketing

Contributors

Nagasimha Balakrishna Kanagal is an Associate Professor in the

Marketing area at IIM Bangalore. He holds a B.E Degree from
Bangalore University and PGDM from IIM Ahmadabad. He has also
done his MA, MS and PhD from University of Texas at Dallas. He
can be reached at kanagal@iimb.ernet.in.

Manish Kumar Urele (PGP 2009-11) holds a Bachelor's Degree in

Electrical Engineering from National Institute of Technology,
Bhopal. He can be reached at manish.urele09@iimb.ernet.in.

Suman Verma (PGP 2009-11) holds a Bachelor's Degree in

Electronics & Communication Engineering from National Institute
of Technology, Jaipur. She can be reached at
suman.verma09@iimb.ernet.in.

References

1. Jessica E Vascellaro, Sep 4, 2008, Gap Widens in Online

Advertizing, The Wall Street Journal, Asia Edition

2. TradingEconomics.com Market watch, 2010, India GDP

growth Rate, May 05,
http://www.tradingeconomics.com/Economics/GDP-Growth.aspx?
Symbol=INR, Last accessed on September 24, 2010
 3. Press Trust of India (PTI) News, 2009, Indias per capita
income doubles in 7 years to Rs38,08, Feb 09,
http://www.livemint.com/2009/02/09150714/India8217s-per-
capita-incom.html, Last accessed on September 24, 2010

4. Adlakha, Arjun, 1997, International Brief, Population Trends:

India, April 1997, http://www.census.gov/ipc/prod/ib-9701.pdf,
Last Accessed on September 24, 2010

5. McKinsey Global Institute, 2005, The Bird of Gold: The Rise

of Indias Consumer Market,
http://www.mckinsey.com/mgi/publications/india_consumer_marke
t/slideshow/main.asp, Last accessed on September 24, 2010