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Winter Project Report on

“Green Marketing- A New Dimension In Marketing Era”
Submitted to:

Mrs. Megha Bhatia Project Supervisor

Shobhit Agrawal Roll No.0989143 BBA- VI Sem. April 2011

M.J.P Rohilkhand University
Submitted by


“Green Marketing-A New Dimension In Marketing Era”

The author hereby grants I.F.T.M. permission to reproduce and to distribute publicably, paper and electronic copies of the project report in whole or in part.

Signature of student Department of Management studies March 2011

Certified by Mrs.Megha Bhatia Project Supervisor

Accepted by Dr. (Mrs.) Manjula Jain Head of the Department of Management studies


Heartiest thanks to Dr. (Mrs.) Manjula Jain (H.O.D Management Department) and other faculty members, librarian and all other staffs of my esteemed institute for their time to time assistance. I would like to thanks all the customers whom I met and they gave their valuable time to answer my queries. I express my heartfelt gratitude Mrs. Megha Bhatia (Project Supervisor) for giving me the opportunity to do the Project Work and for providing me this learning experience in this esteemed organization.

Lastly I would express my sincere thanks to all respondents for their cooperation. I am extremely obliged and highly thankful all those who have contributed to completion of this project.

Shobhit Agrawal BBA- VI Sem.

Although environmental issues influence all human activities, few academic disciplines have integrated green issues into their literature. This is especially true of marketing. As society becomes more concerned with the natural environment, businesses have begun to modify their behavior in an attempt to address society's "new" concerns. Some businesses have been quick to accept concepts like environmental management systems and waste minimization, and have integrated environmental issues into all organizational activities. Some evidence of this is the development of journals such as "Business Strategy and the Environment" and "Greener Management International," which are specifically designed to disseminate research relating to business' environmental behavior. One business area where environmental issues have received a great deal of discussion in the popular and professional press is marketing. Terms like "Green Marketing" and "Environmental Marketing" appear frequently in the popular press. Many governments around the world have become so concerned about green marketing activities that they have attempted to regulate them. For example, in the United States (US) the Federal Trade Commission and the National Association of Attorneys-General have developed extensive documents examining green marketing issues. One of the biggest problems with the green marketing area is that there has been little attempt to academically examine environmental or green marketing.


The objective of this report is to: • • • • • Introduce the terms and concepts of green marketing; Briefly discuss why going green is important; Examine some of the reason that organizations are adopting a green marketing philosophy; and Mention some of the problems with green marketing. Find out ways to improve consumer appeal for environmentally preferable products through different marketing strategies.


ACKNOWLEDGEMNET PREFACE OBJECTIVE No. 1. 2. 3. 4. 5. 6. Chapter Name INTRODUCTION TO GREEN MARKETING................................... GREEN MARKETING MYOPIA…………………………………… HOW TO DO GREEN MARKETING…………………….................. STRATEGIES AND ADVANTEGES OF GREEN MARKETING… RESEARCH METHODOLOGY………………………………………. REFERENCES…………………………………………………………….. Page 1-18 19-27 28-42 43-53 54-66 70




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 first wave of Green Marketing occurred in the 1980s. Corporate Social Responsibility (CSR) Reports started with the ice cream seller Ben & Jerry's where the financial report was supplemented by a greater view on the company's environmental impact. In 1987 a document prepared by the World Commission on Environment and Development defined sustainable development as meeting “the needs of the present without compromising the ability of future generations to meet their own need”, this became known as the Brundtland Report and was another step towards widespread thinking on sustainability in everyday activity. Two tangible milestones for wave 1 of green marketing came in the form of published books, both of which were called Green Marketing. They were by Ken Peattie (1992) in the United Kingdom and by Jacquelyn Ottman (1993) in the United States of America. In the years after 2000 a second wave of Green marketing emerged. By now CSR and the Triple Bottom Line (TBL) were widespread. Such publications as a 2005 United Nations Report, then in 2006 a book by Al Gore and the UK Stern Report brought scientificenvironmental arguments to a wide public in an easy to understand way. This knowledge assessed the implications of moving to a low-carbon global economy and the potential of different approaches. This new wave of Green Marketing differed from the first wave in many respects. It is curious to note that Green Marketing Wave 1 followed an economic recession, whereas Green Marketing Wave 2 came before the global recessions that come to be known as the “Credit Crunch”. This difference may be significant in that it may suggest that Green Marketing is here to stay. The green marketing concept dictates, amongst other things, less use, recycling and avoiding waste, just some of the ways society reacts at times of recession. (see Bradley 2003 for 6 green marketing strategies). According to Jacquelyn Ottman, (author of Green Marketing: Opportunity for Innovation) 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



Unfortunately, a majority of people believe that green marketing refers solely to the promotion or advertising of products with environmental characteristics. Terms like Phosphate Free, Recyclable, Refillable, Ozone Friendly, and Environmentally Friendly are some of the things consumers most often associate with green marketing. While these terms are green marketing claims, in general green marketing is a much broader concept, one that can be applied to consumer goods, industrial goods and even services. For example, around the world there are resorts that are beginning to promote themselves as "ecotourist" facilities, i.e., facilities that "specialize" in experiencing nature or operating in a fashion that minimizes their environmental impact. Thus green marketing incorporates a broad range of activities, including product modification, changes to the production process, packaging changes, as well as modifying advertising. Yet defining green marketing is not a simple task. Indeed the terminology used in this area has varied, it includes: Green Marketing, Environmental Marketing and Ecological Marketing. While green marketing came into prominence in the late 1980s and early 1990s, it was first discussed much earlier. 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". Since that time a number of other books on the topic have been published. The AMA workshop attempted to bring together academics, practitioners, and public policy makers to examine marketing's impact on the natural environment. At this workshop ecological marketing was defined as: “The study of the positive and negative aspects of marketing activities on pollution, energy depletion and non-energy resource depletion.”

This early definition has three key components – 1) It is a subset of the overall marketing activity; 2) It examines both the positive and negative activities; and 3) A narrow range of environmental issues are examined. While this definition is a useful starting point, to be comprehensive green marketing needs to be more broadly defined. Before providing an alternative definition it should be noted that no one definition or terminology has been universally accepted. This lack of consistency is a large part of the problem, for how can any issue be evaluated if all researchers have a different perception of what they are researching. The following definition is much broader than those of other researchers and it encompasses all major components of other definitions. The definition is – “Green or Environmental Marketing consists of all activities designed to generate and facilitate any exchanges intended to satisfy human needs or wants, such that the satisfaction of these needs and wants occurs, with minimal detrimental impact on the natural environment.” This definition incorporates much of the traditional components of the marketing definition that is "All activities designed to generate and facilitate any exchanges intended to satisfy human needs or wants". Therefore it ensures that the interests of the organization and all its consumers are protected, as voluntary exchange will not take place unless both the buyer and seller mutually benefit. The above definition also includes the protection of the natural environment, by attempting to minimize the detrimental impact this exchange has on the environment. This second point is important, for human consumption by its very nature is destructive to the natural environment. (To be accurate products making green claims should state they are "less environmentally harmful" rather than "Environmentally friendly.") Thus green marketing should look at minimizing environmental harm, not necessarily eliminating it.

Although no consumer product has a zero impact on the environment, in business, the terms “green product” and “environmental product” are used commonly to describe those that strive to protect or enhance the natural environment by conserving energy and/or resources and reducing or eliminating use of toxic agents, pollution, and waste. Greener, more sustainable products need to dramatically increase the productivity of natural resources, follow biological/ cyclical production models, encourage dematerialization, and reinvest in and contribute to the planet’s “natural” capital. Escalating energy prices, concerns over foreign oil dependency, and calls for energy conservation are creating business opportunities for energy-efficient products, clean energy, and other environmentally sensitive innovations and products.


The question of why green marketing has increased in importance is quite simple and relies on the basic definition of Economics: “Economics is the study of how people use their limited resources to try to satisfy unlimited wants.” Thus mankind has limited resources on the earth, with which she/he must attempt to provide for the worlds' unlimited wants. In market societies where there is "freedom of choice", it has generally been accepted that individuals and organizations have the right to attempt to have their wants satisfied. As firms face limited natural resources, they must develop new or alternative ways of satisfying these unlimited wants. Ultimately green marketing looks at how marketing activities utilize these limited resources, while satisfying consumers wants, both of individuals and industry, as well as achieving the selling organization's objectives.



When looking through the literature there are several suggested reasons for firms increased use of Green Marketing. Five possible reasons cited are: 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; and 5. Cost factors associated with waste disposal, or reductions in material usage forces firms to modify their behavior.


It appears that all types of consumers, both individual and industrial are becoming more concerned and aware about the natural environment. In a 1992 study of 16 countries, more than 50% of consumers in each country, other than Singapore, indicated they were concerned about the environment. A 1994 study in Australia found that 84.6%

of the sample believed all individuals had a responsibility to care for the environment. A further 80% of this sample indicated that they had modified their behavior, including their purchasing behavior, due to environmental reasons. As demands change, many firms see these changes as an opportunity to be exploited. Given these figures, it can be assumed that firms marketing goods with environmental characteristics will have a competitive advantage over firms marketing non-environmentally responsible alternatives. There are numerous example of firms who have strived to become more environmentally responsible, in an attempt to better satisfy their consumer needs.

McDonald's replaced its clam shell packaging with waxed paper because of increased consumer concern relating to polystyrene production and Ozone depletion.

Tuna manufacturers modified their fishing techniques because of the increased concern over driftnet fishing, and the resulting death of dolphins. Xerox introduced a "high quality" recycled photocopier paper in an attempt to satisfy the demands of firms for less environmentally harmful products.

This is not to imply that all firms who have undertaken environmental marketing activities actually improve their behavior. In some cases firms have misled consumers in an attempt to gain market share. In other cases firms have jumped on the green bandwagon without considering the accuracy of their behavior, their claims, or the effectiveness of their products. This lack of consideration of the true "greenness" of activities may result in firms making false or misleading green marketing claims.

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 CocaCola. 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.


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. One of the more recent publicized environmental regulations undertaken by governments has been the establishment of guidelines designed to "control" green marketing claims. These regulations include the Australian Trade Practices Commission's (TPC) "Environmental Claims in Marketing - A Guideline, the US Federal Trade Commission's (FTC) "Guides for the Use of Environmental Marketing Claims" and the regulations suggested by the National Association of Attorneys-General. These regulations are all designed to ensure consumers have the appropriate information which would enable them to evaluate firm's environmental claims. In addition to these guidelines many States in the US have introduced legislation to control various environmental marketing activities. In most cases these State laws are more stringent than the FTC's guidelines. To date the majority of prosecutions of firms using misleading green marketing has occurred in State rather than Federal courts.

Thus governmental attempts to protect consumers from false or misleading claims should theoretically provide consumers with the ability to make more informed decisions. In Australia where regulations have affected many companies, one unintended casualty was an advertisement for the Federal Government's environmental labeling program "Environmental Choice." This ad was deemed to breach the TPC's guidelines, as it implied that only products with the logo were environmentally responsible.

Another major force in the environmental marketing area has been firms' desire to maintain their competitive position. In many cases firms observe competitors promoting their environmental behaviors and attempt to emulate this behavior. In some instances this competitive pressure has caused an entire industry to modify and thus reduce its detrimental environmental behavior. For example, it could be argued that Xerox's "Revive 100% Recycled paper" was introduced a few years ago in an attempt to address the introduction of recycled photocopier paper by other manufacturers. In another example when one tuna manufacture stopped using driftnets the others followed suit.

Firms may also use green marketing in an attempt to address cost or profit related issues. Disposing of environmentally harmful by-products, such as polychlorinated biphenyl (PCB) contaminated oil are becoming increasingly costly and in some cases difficult. Therefore firms that can reduce harmful wastes may incur substantial cost savings. When attempting to minimize waste, firms are often forced to re-examine their production processes. In these cases they often develop more effective production processes that not only reduce waste, but reduce the need for some raw materials. This serves as a double cost savings, since both waste and raw material are reduced. In other cases firms attempt to find end-of-pipe solutions, instead of minimizing waste. In these situations firms try to find markets or uses for their waste materials, where

one firm's waste becomes another firm's input of production. One Australian example of this is a firm who produces acidic waste water as a by-product of production and sells it to a firm involved in neutralizing base materials. The last way in which cost or profit issues may affect firms' environmental marketing activities is that new industries may be developed. This can occur in two ways: 1) A firm develops a technology for reducing waste and sells it to other firms; or 2) A waste recycling or removal industry develops. For example, firms that clean the oil in large industrial condensers increase the life of those condensers, removing the need for replacing the oil, as well as the need to dispose of the waste oil. This reduces operating costs for those owning the condensers and generates revenue for those firms cleaning the oil.

No matter why a firm uses green marketing there are a number of potential problems that they must overcome. One of the main problems is that firms using green marketing must ensure that their activities are not misleading to consumers or industry, and do not breach any of the regulations or laws dealing with environmental marketing. For example marketers in the US must ensure their green marketing claims can meet the following set of criteria, in order to comply with the FTC's guidelines. Green marketing claims must;
• • • • • •

Clearly state environmental benefits; Explain environmental characteristics; Explain how benefits are achieved; Ensure comparative differences are justified; Ensure negative factors are taken into consideration; and Only use meaningful terms and pictures.

Another problem firm’s face is that those who modify their products due to increased consumer concern must contend with the fact that consumers' perceptions are sometimes not correct. Take for example the McDonald's case where it has replaced its clam shells with plastic coated paper. There is ongoing scientific debate which is more environmentally friendly. Some scientific evidence suggests that when taking a cradle-tograve approach, polystyrene is less environmentally harmful. If this is the case McDonald's bowed to consumer pressure, yet has chosen the more environmentally harmful option. When firms attempt to become socially responsible, they may face the risk that the environmentally responsible action of today will be found to be harmful in the future. Take for example the aerosol industry which has switched from CFCs (chlorofluorocarbons) to HFCs (hydrofluorocarbons) only to be told HFCs are also a greenhouse gas. Some firms now use DME (dimethyl ether) as an aerosol propellant, which may also harm the ozone layer. Given the limited scientific knowledge at any point in time, it may be impossible for a firm to be certain they have made the correct environmental decision. This may explain why some firms, like Coca-Cola and Walt Disney World, are becoming socially responsible without publicizing the point. They may be protecting themselves from potential future negative backlash; if it is determined they made the wrong decision in the past. While governmental regulation is designed to give consumers the opportunity to make better decisions or to motivate them to be more environmentally responsible, there is difficulty in establishing policies that will address all environmental issues. For example, guidelines developed to control environmental marketing address only a very narrow set of issues, i.e., the truthfulness of environmental marketing claims. If governments want to modify consumer behavior they need to establish a different set of regulations. Thus governmental attempts to protect the environment may result in a proliferation of regulations and guidelines, with no one central controlling body. Reacting to competitive pressures can cause all "followers" to make the same mistake as the "leader." A costly example of this was the Mobil Corporation who

followed the competition and introduced "biodegradable" plastic garbage bags. While technically these bags were biodegradable, the conditions under which they were disposed did not allow biodegradation to occur. Mobil was sued by several US states for using misleading advertising claims. Thus blindly following the competition can have costly ramifications. The push to reduce costs or increase profits may not force firms to address the important issue of environmental degradation. End-of-pipe solutions may not actually reduce the waste but rather shift it around. While this may be beneficial, it does not necessarily address the larger environmental problem, though it may minimize its short term affects. Ultimately most waste produced will enter the waste stream, therefore to be environmentally responsible organizations should attempt to minimize their waste, rather than find "appropriate" uses for it.




In 1994, Philips launched the “EarthLight,” a super energy-efficient compact fluorescent light (CFL) bulb designed to be an environmentally preferable substitute for the traditional energy-intensive incandescent bulb. The CFL’s clumsy shape, however, was incompatible with most conventional lamps, and sales languished. After studying consumer response, Philips reintroduced the product in 2000 under the name “Marathon,” to emphasize the bulb’s five year life. New designs offered the look and versatility of conventional incandescent light bulbs and the promise of more than $20 in energy savings over the product’s life span compared to incandescent bulbs.


The new bulbs were also certified by the U.S. Environmental Protection Agency’s (EPA) Energy Star label. Repositioning CFL bulbs’ features into advantages that resonated with consumer values—convenience, ease-of-use, and credible cost savings— ultimately sparked an annual sales growth of 12 percent in a mature product market. Philips’ experience provides a valuable lesson on how to avoid the common pitfall of “green marketing myopia.” Philips called its original entry “Earthlight” to communicate the CFL bulbs’ environmental advantage. While noble, the benefit appealed to only the deepest green niche of consumers. The vast majority of consumers, however, will ask, “If I use ‘green’ products, what’s in it for me?” In practice, green appeals are not likely to attract mainstream consumers unless they also offer a desirable benefit, such as cost-savings or improved product performance. To avoid green marketing myopia,

marketers must fulfill consumer needs and interests beyond what is good for the environment. Thus we see how green marketing myopia was faced by the Philips while trying to bring into market the environment friendly light bulbs.


Green marketing must satisfy two objectives: improved environmental quality and customer satisfaction. Misjudging either or overemphasizing the former at the expense of the latter can be termed “green marketing myopia”. In 1960, Harvard business professor Theodore Levitt introduced the concept of “marketing myopia” in a nowfamous and influential article in the Harvard Business Review. In it, he characterized the common pitfall of companies’ tunnel vision, which focused on “managing products” (that is, product features, functions, and efficient production) instead of “meeting customers’ needs” (that is, adapting to consumer expectations and anticipation of future desires). Levitt warned that a corporate preoccupation on products rather than consumer needs was doomed to failure because consumers select products and new innovations that offer benefits they desire. Research indicates that many green products have failed because of green marketing myopia—marketers’ myopic focus on their products’ “greenness” over the broader expectations of consumers or other market players (such as regulators or activists). For example, partially in response to the 1987 Montreal Protocol, in which signatory countries (including the United States) agreed to phase out ozone depleting

chlorofluorocarbons (CFCs) by 2000, Whirlpool (in 1994) launched the “Energy Wise” refrigerator, the first CFC free cooler and one that was 30 percent more efficient than the U.S. Department of Energy’s highest standard. For its innovation, Whirlpool won the “Golden Carrot,” a $30 million award package of consumer rebates from the SuperEfficient Refrigerator Program, sponsored by the Natural Resources Defense Council and funded by electric utilities. Unfortunately, Energy Wise’s sales languished because the CFC-free benefit and energy-savings did not offset its $100 to $150 price premium, particularly in markets outside the rebate program, and the refrigerators did not offer additional features or new styles that consumers desired. General Motors (GM) and Ford encountered similar problems when they launched their highly publicized EV-1 and Think Mobility electric vehicles, respectively, in the late 1990s to early 2000s in response to the 1990 zero emission vehicle (ZEV) regulations adopted in California. Both automakers believed their novel two-seater cars would be market successes (GM offered the EV-1 in a lease program, and Ford offered Think Mobility vehicles as rentals via the Hertz car-rental chain). Consumers, however, found electric vehicles’ need for constant recharging with few recharging locations too inconvenient. Critics charged that the automakers made only token efforts to make electric cars a success, but a GM spokesperson recently explained, “We spent more than $1 billion to produce and market the vehicle, [but] fewer than 800 were leased.” Most drivers were not willing to drastically change their driving habits and expectations to accommodate electric cars, and the products ultimately were taken off the market. Aside from offering environmental benefits that do not meet consumer preferences, green marketing myopia can also occur when green products fail to provide credible, substantive environmental benefits.

Mobil’s Hefty photodegradable plastic trash bag is a case in point. Introduced in 1989, Hefty packages prominently displayed the term “degradable” with the explanation that a special ingredient promoted its decomposition into harmless particles in landfills “activated by exposure to the elements” such as sun, wind, and rain. Because most garbage is buried in landfills that allow limited exposure to the elements, making degradation virtually impossible, the claim enraged environmentalists. Ultimately, seven state attorneys general sued Mobil on charges of deceptive advertising and consumer fraud. Mobil removed the claim from its packaging and vowed to use extreme caution in making environmental claims in the future. It has been found that the top reasons consumers do not buy green products included beliefs that they require sacrifices—inconvenience, higher costs and lower performance— without significant environmental benefits. Ironically, despite what consumers think, a plethora of green products available in the marketplace are in fact desirable because they deliver convenience, lower operating costs, and/or better performance. Often these are not marketed along with their green benefits, so consumers do not immediately recognize them as green and form misperceptions about their benefits. When consumers are convinced of the desirable “non-green” benefits of environmental products, they are more inclined to adopt them. Other environmental products have also scored market successes by either serving profitable niche markets or offering mainstream appeal.

Consider the Toyota Prius, the gas-electric hybrid vehicle that achieves about 44 miles per gallon of gasoline. In recent years, Toyota’s production has hardly kept pace with the growing demand, with buyers enduring long waits and paying thousands above the car’s sticker price. Consequently, other carmakers have scrambled to launch their own hybrids. However, despite higher gas prices, analysts assert that it can take 5 to 20 years for lower gas expenses to offset many hybrid cars’ higher prices. Thus, economics alone cannot explain their growing popularity. Analysts offer several reasons for the Prius’ market demand. Initially, the buzz over the Prius got a boost at the 2003 Academy Awards when celebrities such as Cameron Diaz, Harrison Ford, Susan Sarandon, and Robin Williams abandoned stretch limousines and oversized sport utility vehicles, arriving in Priuses to symbolize support for reducing America’s dependence on foreign oil. Since then, the quirky-looking Prius’ badge of “conspicuous conservation” has satisfied many drivers’ desires to turn heads and make a statement about their social responsibility, among them Google founders Larry Page and Sergey Brin, columnist Arianna Huffington, comic Bill Maher, and Charles, Prince of Wales. The Prius ultimately was named Motor Trend’s Car of the Year in 2004. The trendy appeal of the Prius illustrates that some green products can leverage consumer desires for being distinctive. Others say the Prius is just fun to drive—the dazzling digital dashboard that offers continuous feedback on fuel efficiency and other car operations provides an entertaining driving experience. More recently, however, the Prius has garnered fans for more practical reasons. A 2006 Maritz Poll finds that owners purchased hybrids because of the convenience of fewer fill-ups, better performance, and the enjoyment of driving the latest technology. In some states, the Prius and other highmileage hybrid vehicles, such as Honda’s Insight, are granted free parking and solooccupancy access to high occupancy vehicle (HOV) lanes. In sum, hybrid vehicles offer consumers several desirable benefits that are not necessarily “green” benefits.


Many environmental products have become so common and widely distributed that many consumers may no longer recognize them as green because they buy them for non-green reasons. Green household products, for instance, are widely available at supermarkets and discount retailers, ranging from energy-saving Tide Coldwater laundry detergent to non-toxic Method and Simple Green cleaning products. Use of recycled or biodegradable paper products (such as plates, towels, napkins, coffee filters, computer paper,and other goods) is also widespread. Organic and rainforestprotective “shade grown” coffees are available at Starbucks and other specialty stores and supermarkets. Organic baby food is expected to command 12 percent market share in 2006 as parents strive to protect their children’s mental and physical development. Indeed, the organic food market segment has increased 20 percent annually since 1990, five times faster than the conventional food market, spurring the growth of specialty retailers such as Whole Foods Market and Wild Oats. Wal-Mart, too, has joined this extensive distribution of organic products. Indeed, Wal-Mart has recently declared that in North American stores, its non-farm-raised fresh fish will be certified by the Marine Stewardship Council as sustainably harvested. Super energy-efficient appliances and fixtures are also becoming popular. Chic, front-loading washing machines, for example, accounted for 25 percent of the market in

2004, up from 9 percent in 2001. EPA’s Energy Star label, which certifies that products consume up to 30 percent less energy than comparable alternatives, is found on products ranging from major appliances to light fixtures to entire buildings (minimum efficiency standards vary from product to product). The construction industry is becoming increasingly green as government and industry demand office buildings that are “high performance” (for example, super energy- and resource-efficient and cost effective) and “healthy” for occupants (for example, well-ventilated; constructed with materials with low or no volatile organic compounds [VOC]). The U.S. Green Building Council’s “Leadership in Energy and Environmental Design” (LEED) provides a rigorous rating system and green building checklist that are rapidly becoming the standard for environmentally sensitive construction. Home buyers are recognizing the practical long-term cost savings and comfort of natural lighting, passive solar heating, and heat-reflective windows, and a 2006 study sponsored by home improvement retailer Lowe’s found nine out of ten builders surveyed are incorporating energy-saving features into new homes. Additionally, a proliferation of “green” building materials to serve the growing demand has emerged. Lowe’s competitor The Home Depot is testing an ‘EcoOptions’ product line featuring natural fertilizers and mold resistant drywall in its Canadian stores that may filter into the U.S. market. In short, energy efficiency and green construction has become main stream. The diversity and availability of green products indicate that consumers are not indifferent to the value offered by environmental benefits. Consumers are buying green —but not necessarily for environmental reasons. The market growth of organic foods and energy-efficient appliances is because consumers desire their perceived safety and money savings, respectively. Thus, the apparent paradox between what consumers say and their purchases may be explained, in part, by green marketing myopia—a narrow focus on the greenness of products that blinds companies from considering the broader consumer and societal desires. A fixation on products’ environmental merits has resulted frequently in inferior green products (for example, the original EarthLight and GM’s EV-1 electric car) and unsatisfying consumer experiences.



The analysis of past research and marketing strategies finds that successful green products have avoided green marketing myopia by following three important principles: “The Three Cs” of consumer value positioning, calibration of consumer knowledge, and credibility of product claims.

1. Consumer Value Positioning –
The marketing of successfully established green products showcases non-green consumer value, and there are at least five desirable benefits commonly associated with green products: 1.1. Efficiency and cost effectiveness; 1.2. Health and safety; 1.3. Performance; 1.4. Symbolism and status; and 1.5. Convenience. Additionally, when these five consumer value propositions are not inherent in the green product, successful green marketing programs bundle (that is, add to the product design or market offering) desirable consumer value to broaden the green product’s appeal. In practice, the implication is that product designers and marketers need to align environmental products’ consumer value (such as money savings) to relevant consumer market segments (for example, cost conscious consumers). 1.1 Efficiency and Cost Effectiveness The common inherent benefit of many green products is their potential energy and resource efficiency. Given sky-rocketing energy prices and tax incentives for fuel-

efficient cars and energy saving home improvements and appliances, long-term savings have convinced cost-conscious consumers to buy green. Recently, the home appliance industry made great strides in developing energy efficient products to achieve EPA’s Energy Star rating. For example, Energy Star refrigerators use at least 15 percent less energy and dishwashers use at least percent less energy than do traditional models. Consequently, an Energy Star product often commands a price premium. Whirlpool’s popular Duet frontloading washer and dryer, for example, cost more than $2,000, about double the price of conventional units; however, the washers can save up to 12,000 gallons of water and $110 on electricity annually compared to standard models (Energy Star does not rate dryers). Laundry detergents are also touting energy savings. Procter & Gamble’s (P&G) newest market entry, Tide Coldwater, is designed to clean clothes effectively in cold water. About 80 to 85 percent of the energy used to wash clothes comes from heating water. Working with utility companies, P&G found that consumers could save an average of $63 per year by using cold rather than warm water. Adopting Tide Coldwater gives added confidence to consumers already washing in cold water. As energy and resource prices continue to soar, opportunities for products offering efficiency and savings are destined for market growth. 1.2 Health and Safety Concerns over exposure to toxic chemicals, hormones, or drugs in everyday products have made health and safety important choice considerations, especially among vulnerable consumers, such as pregnant women, children, and the elderly. Because most environmental products are grown or designed to minimize or eliminate the use of toxic agents and adulterating processes, market positioning on consumer safety and health can achieve broad appeal among health-conscious consumers. Sales of organic foods, for example, have grown considerably in the wake of public fear over “mad cow” disease; antibiotic- laced meats, mercury in fish, and genetically modified foods. Mainstream

appeal of organics is not derived from marketers promoting the advantages of free-range animal ranching and pesticide free soil. Rather, market positioning of organics as flavorful, healthy alternatives to factory-farm foods has convinced consumers to pay a premium for them. A study conducted by the Alliance for Environmental Innovation and household products-maker S.C. Johnson found that consumers are most likely to act on green messages that strongly connect to their personal environments. Specifically, findings suggest that the majority of consumers prefer such environmental household product benefits as “safe to use around children,” “no toxic ingredients,” “no chemical residues,” and “no strong fumes” over such benefits as “packaging can be recycled” or “not tested on animals.” Seventh Generation, a brand of non-toxic and environmentally- safe household products, derived its name from the Iroquois belief that, “In our every deliberation, we must consider the impact of our decisions on the next seven generations.” Accordingly, its products promote the family-oriented value of making the world a safer place for the next seven generations. Indoor air quality is also a growing concern. Fumes from paints, carpets, furniture, and other décor in poorly ventilated “sick buildings” have been linked to headaches, eye, nose, and throat irritation, dizziness, and fatigue among occupants. Consequently, many manufacturers have launched green products to reduce indoor air pollution. Sherwin Williams, for example, offers “Harmony,” a line of interior paints that is low-odor, zero- VOC, and silica-free. Aside from energy efficiency, health and safety have been key motivators driving the green building movement. 1.3 Performance The conventional wisdom is that green products don’t work as well as “nongreen” ones. This is a legacy from the first generation of environmentally sensitive products that clearly were inferior. Consumer perception of green cleaning agents introduced in health food stores in the 1960s and 1970s, for example, was that “they cost

twice as much to remove half the grime.” Today, however, many green products are designed to perform better than conventional ones and can command a price premium. For example, in addition to energy efficiency, front-loading washers clean better and are gentler on clothes compared to conventional top-loading machines because they spin clothes in a motion similar to clothes driers and use centrifugal force to pull dirt and water away from clothes. By contrast, most top-loading washers use agitators to pull clothes through tanks of water, reducing cleaning and increasing wear on clothes. Consequently, the efficiency and high performance benefits of top-loading washers justify their premium prices. Homeowners commonly build decks with cedar, redwood, or pressure-treated pine (which historically was treated with toxic agents such as arsenic). Wood requires stain or paint and periodic applications of chemical preservatives for maintenance. Increasingly, however, composite deck material made from recycled milk jugs and wood fiber, such as Weyerhaeuser’s ChoiceDek, is marketed as the smarter alternative. Composites are attractive, durable, and low maintenance. They do not contain toxic chemicals and never need staining or chemical preservatives. Accordingly, they command a price premium — as much as two to three times the cost of pressure-treated pine and 15 percent more than cedar or redwood. In sum, “high performance” positioning can broaden green product appeal. 1.4 Symbolism and Status As mentioned earlier, the Prius, Toyota’s gas-electric hybrid, has come to epitomize “green chic.” According to many automobile analysts, the cool-kid cachet that comes with being an early adopter of the quirky-looking hybrid vehicle trend continues to partly motivate sales. Establishing a green chic appeal, however, isn’t easy. According to popular culture experts, green marketing must appear grass-roots driven and humorous without sounding preachy. To appeal to young people, conservation and green consumption need the unsolicited endorsement of high-profile celebrities and

connection to cool technology. Prius has capitalized on its evangelical following and high-tech image with some satirical ads, including a television commercial comparing the hybrid with Neil Armstrong’s moon landing (“That’s one small step on the accelerator, one giant leap for mankind”) and product placements in popular Hollywood films and sitcoms (such as Curb Your Enthusiasm). More automobile analysts, the cool-kid cachet that comes with being an early adopter of the quirky-looking hybrid vehicle trend continues to partly motivate sales.


In business, where office furniture symbolizes the cachet of corporate image and status, the ergonomically designed “Think” chair is marketed as the chair “with a brain and a conscience.” Produced by Steelcase, the world’s largest office furniture manufacturer, the Think chair embodies the latest in “cradle to cradle” (C2C) design and manufacturing. C2C, which describes products that can be ultimately returned to technical or biological nutrients, encourages industrial designers to create products free of harmful agents and processes that can be recycled easily into new products (such as metals and plastics) or safely returned to the earth (such as plant-based materials). Made without any known carcinogens, the Think chair is 99 percent recyclable; it disassembles with basic hand tools in about five minutes, and parts are stamped with icons showing recycling options. Leveraging its award-winning design and sleek comfort, the Think chair is positioned as symbolizing the smart, socially responsible office. In sum, green products can be positioned as status symbols.

1.5 Convenience Many energy-efficient products offer inherent convenience benefits that can be showcased for competitive advantage. CFL bulbs, for example, need infrequent replacement and gas-electric hybrid cars require fewer refueling stops—benefits that are highlighted in their marketing communications. Another efficient alternative to incandescent bulbs are light emitting diodes (LEDs): They are even more efficient and longer-lasting than CFL bulbs; emit a clearer, brighter light; and are virtually unbreakable even in cold and hot weather. LEDs are used in traffic lights due to their highperformance convenience. To encourage hybrid vehicle adoption, some states and cities are granting their drivers the convenience of free parking and solo-occupant access to HOV lanes. A Toyota spokesperson recently told the Los Angeles Times, “Many customers are telling us the carpool lane is the main reason for buying now.” Toyota highlights the carpool benefit on its Prius Web site, and convenience has become an incentive to drive efficient hybrid cars in traffic- congested states like California and Virginia. Critics have charged, however, that such incentives clog carpool lanes and reinforce a “one car, one person” lifestyle over alternative transportation. In response, the Virginia legislature has more recently enacted curbs on hybrid drivers use of HOV lanes during peak hours, requiring three or more people per vehicle, except for those that have been grandfathered in. Solar power was once used only for supplying electricity in remote areas (for example, while camping in the wilderness or boating or in homes situated off the power grid). That convenience, however, is being exploited for other applications. In landscaping, for example, self-contained solar-powered outdoor evening lights that recharge automatically during the day eliminate the need for electrical hookups and offer flexibility for reconfiguration. With society’s increasing mobility and reliance on electronics, solar power’s convenience is also manifest in solar-powered calculators, wrist watches, and other gadgets, eliminating worries over dying batteries.

1.6 Bundling Some green products do not offer any of the inherent five consumer desired benefits noted above. This was the case when energy-efficient and CFC-free refrigerators were introduced in China in the 1990s. While Chinese consumers preferred and were willing to pay about 15 percent more for refrigerators that were “energy efficient,” they did not connect the environmental advantage of “CFC-free” with either energy efficiency or savings. Consequently, the “CFC-free” feature had little impact on purchase decisions. To encourage demand, the CFC-free feature was bundled with attributes desired by Chinese consumers, which included energy efficiency, savings, brand/quality, and outstanding after-sales service. Given consumer demand for convenience, incorporating time-saving or ease-of- use features into green products can further expand their mainstream acceptance. Ford’s hybrid Escape SUV comes with an optional 110-volt AC power outlet suitable for work, tailgating, or camping. Convenience has also enhanced the appeal of Interface’s recyclable FLOR carpeting, which is marketed as “practical, goof-proof, and versatile.” FLOR comes in modular square tiles with four peel-and-stick dots on the back for easy installation (and pull up for altering, recycling, or washing with water in the sink). Modularity offers versatility to assemble tiles for a custom look. Interface promotes the idea that its carpet tiles can be changed and reconfigured in minutes to dress up a room for any occasion. The tiles come in pizzastyle boxes for storage, and ease of use is FLOR’s primary consumer appeal. Austin (Texas) Energy’s “Green Choice” program has led the US in renewable energy sales for the past three years. In 2006, demand for wind energy outpaced supply so that the utility resorted to selecting new “Green Choice” subscribers by lottery. While most utilities find it challenging to sell green electricity at a premium price on its environmental merit, Austin Energy’s success comes from bundling three benefits that appeal to commercial power users: First, Green Choice customers are recognized in broadcast media for their corporate responsibility; second, the green power is marketed as “home grown,” appealing to Texan loyalties; and third, the program offers a fixed price that is locked in for 10 years. Because wind power’s cost is derived primarily

from the construction of wind farms and is not subject to volatile fossil fuel costs, Austin Energy passes its inherent price stability onto its Green Choice customers. Thus, companies participating in Green Choice enjoy the predictability of their future energy costs in an otherwise volatile energy market. The analysis suggests that successful green marketing programs have broadened the consumer appeal of green products by convincing consumers of their “non-green” consumer value. The lesson for crafting effective green marketing strategies is that planners need to identify the inherent consumer value of green product attributes (for example, energy efficiency’s inherent long-term money savings) or bundle desired consumer value into green products (such as fixed pricing of wind power) and to draw marketing attention to this consumer value.

2. Calibration of Consumer Knowledge
Many of the successful green products in the analysis described here employ compelling, educational marketing messages and slogans that connect green product attributes with desired consumer value. That is, the marketing programs successfully calibrated consumer knowledge to recognize the green product’s consumer benefits. In many instances, the environmental benefit was positioned as secondary, if mentioned at all. Changes made in EPA’s Energy Star logo provide an example, illustrating the program’s improved message calibration over the years. One of Energy Star’s early marketing messages, “EPA Pollution Preventer,” was not only ambiguous but myopically focused on pollution rather than a more mainstream consumer benefit. A later promotional message, “Saving The Earth. Saving Your Money.” better associated energy efficiency with consumer value, and one of its more recent slogans, “Money Isn’t All You’re Saving,” touts economic savings as the chief benefit. This newest slogan also encourages consumers to think implicitly about what else they are “saving”—the logo’s illustration of the Earth suggests the answer, educating consumers that “saving the Earth” can also meet consumer self-interest.

The connection between environmental benefit and consumer value is evident in Earthbound Farm Organic’s slogan, “Delicious produce is our business, but health is our bottom line,” which communicates that pesticide-free produce is flavorful and healthy. Likewise, Tide Coldwater’s “Deep Clean. Save Green.” slogan not only assures consumers of the detergent’s cleaning performance, but the term “green” offers a double meaning, connecting Tide’s cost saving with its environmental benefit. Citizen’s solarpowered Eco-Drive watch’s slogan, “Unstoppable Caliber,” communicates the product’s convenience and performance (that is, the battery will not die) as well as prestige. Some compelling marketing communications educate consumers to recognize green products as “solutions” for their personal needs and the environment. When introducing its Renewal brand, Rayovac positioned the reusable alkaline batteries as a solution for heavy battery users and the environment with concurrent ads touting “How to save $150 on a CD player that costs $100” and “How to save 147 batteries from going to landfills.” Complementing the money savings and landfill angles, another ad in the campaign featured sports star Michael Jordan proclaiming, “More Power. More Music. And More Game Time.” to connect Renewal batteries’ performance to convenience. In practice, the analysis conducted here suggests that advertising that draws attention to how the environmental product benefit can deliver desired personal value can broaden consumer acceptance of green products.

3. Credibility of Product Claims
Credibility is the foundation of effective green marketing. Green products must meet or exceed consumer expectations by delivering their promised consumer value and providing substantive environmental benefits. Often, consumers don’t have the expertise or ability to verify green products’ environmental and consumer values, creating misperceptions and skepticism. As exemplified in the case of Mobil’s Hefty photodegradable plastic trash bag described earlier, green marketing that touts a product’s or a company’s environmental credentials can spark the scrutiny of advocacy groups or

regulators. For example, although it was approved by the U.S. Food and Drug Administration, sugar substitute Splenda’s “Made from sugar, so it tastes like sugar” slogan and claim of being “natural” have been challenged by the Sugar Association and Generation Green, a health advocacy group, as misleading given that its processing results in a product that is “unrecognizable as sugar.” We can derive from past research that green claims should be specific and meaningful. Toyota recognizes the ambiguity of the term “green” and discourages its use in its marketing of its gas-electric hybrid cars. One proposed slogan, “Drive green, breathe blue” was dismissed in favor of specific claims about fuel efficiency, such as “Less gas in. Less gasses out.” Further, environmental claims must be humble and not over-promise. When Ford Motor Company publicized in National Geographic and other magazines its new eco-designed Rouge River Plant that incorporated the world’s largest living roof of plants, critics questioned the authenticity of Ford’s environmental commitment given the poor fuel economy of the automaker’s best-selling SUVs. Even the Prius has garnered some criticism for achieving considerably less mileage (approximately 26 percent less according to Consumer Reports) than its government sticker rating claims, although the actual reduced mileage does not appear to be hampering sales. Nonetheless, green product attributes need to be communicated honestly and qualified for believability (in other words, consumer benefits and environmental effectiveness claims need to be compared with comparable alternatives or likely usage scenarios). For example, Toyota includes an “actual mileage may vary” disclaimer in Prius advertising. When Ford’s hybrid Escape SUV owners complained that they were not achieving expected mileage ratings, Ford launched the “Fuel-Economy School” campaign to educate drivers about ways to maximize fuel efficiency. Further, EPA is reconsidering how it estimates hybrid mileage ratings to better reflect realistic driving conditions (such as heavy acceleration and air conditioner usage).

3.1. Third Party Endorsements and Eco-Certifications Expert third parties with respected standards for environmental testing (such as independent laboratories, government agencies, private consultants, or nonprofit advocacy organizations) can provide green product endorsements and/ or “seals of approval” to help clarify and bolster the believability of product claims. The “Energy Star” label, discussed earlier, is a common certification that distinguishes certain electronic products as consuming up to 30 percent less energy than comparable alternatives. The U.S. Department of Agriculture’s “USDA Organic” certifies the production and handling of organic produce and dairy products.


Green Seal and Scientific Certification Systems emblems certify a broad spectrum of green products. Green Seal sets specific criteria for various categories of products, ranging from paints to cleaning agents to hotel properties, and for a fee, companies can have their products evaluated and monitored annually for certification. Green Seal has

certified the Hyatt Regency in Washington, DC, for the hotel’s comprehensive energy and water conservation, recycling programs, and environmental practices. By contrast, Scientific Certification Systems (SCS) certifies specific product claims or provides a detailed “eco-profile” for a product’s environmental impact for display on product labels for a broad array of products, from agricultural products to fisheries to construction. Although eco-certifications differentiate products and aid in consumer decision making, they are not without controversy. The science behind eco-seals can appear subjective and/or complex, and critics may take issue with certification criteria. For example, GreenOrder, a New York-based environmental consulting firm, has devised a scorecard to evaluate clean-tech products marketed in General Electric’s “Ecomagination” initiative, which range from fuel-efficient aircraft engines to wind turbines to water treatment technologies. Only those passing GreenOrder’s criteria are marketed as Ecomagination products, but critics have questioned GE’s inclusion of “cleaner coal” (that is, coal gasification for cleaner burning and sequestration of carbon dioxide emissions) as an “Ecomagination” product. Consequently, when seeking endorsements and eco-certifications, marketers should consider the environmental tradeoffs and complexity of their products and the third parties behind endorsements and/or certifications: Is the third party respected? Are its certification methodologies accepted by leading environmentalists, industry experts, government regulators, and other key stakeholders? Marketers should educate their customers about the meaning behind an endorsement or an eco-seal’s criteria. GE recognizes that its cleaner coal technology is controversial but hopes that robust marketing and educational outreach will convince society about cleaner coal’s environmental benefits. On its Web site, GE references U.S. Energy Information Administration’s statistics that coal accounts for about 24 percent of the world’s total energy consumption, arguing that coal will continue to be a dominant source of energy due to its abundance and the increasing electrification of populous nations such as China and India.

3.2. Word-of-Mouth Evangelism and the Internet Increasingly, consumers have grown skeptical of commercial messages, and they’re turning to the collective wisdom and experience of their friends and peers about products. Word-of-mouth or “buzz” is perceived to be very credible, especially as consumers consider and try to comprehend complex product innovations. The Internet, through e-mail and its vast, accessible repository of information, Web sites, search engines, blogs, product ratings sites, podcasts, and other digital platforms, has opened significant opportunities for tapping consumers’ social and communication networks to diffuse credible “word-of-mouth” (buzz facilitated by the Internet) about green products. In 2005, Proctor & Gamble partnered with the non-profit organization, the Alliance to Save Energy (ASE), in a “viral marketing” campaign to spread news about the money-saving benefits of laundering clothes in cold water with specially formulated Tide Coldwater. ASE provided credibility for the detergent by auditing and backing P&G’s claims that consumers could save an average of $63 a year if they switched from warm to cold water washes. ASE sent e-mail promotions encouraging consumers to visit, an interactive Web site and take the “Coldwater Challenge” by registering to receive a free sample. Visitors could calculate how much money they would save by using the detergent, learn other energy-saving laundry tips, and refer email addresses of their friends to take the challenge as well. offered an engaging map of the United States where, over time, visitors could track and watch their personal networks grow across the country when their friends logged onto the site to request a free sample. Given the immediacy of e-mail and the Internet, word-of-mouth is fast becoming an important vehicle for spreading credible news about new products. According to the Pew Internet & American Life Project, 44 percent of online U.S. adults (about 50 million Americans) are “content creators,” meaning that they contribute to the Internet via blogs, product recommendations, and reviews. To facilitate buzz, however, marketers need to create credible messages, stories, and Web sites about their products that are so compelling, interesting, and/or entertaining that consumers will seek the information out

and forward it to their friends and family. The fact that P&G was able to achieve this for a low-involvement product is quite remarkable. International online marketing consultant Hitwise reported that ASE’s e-mail campaign increased traffic at the Tide Coldwater Web site by 900 percent in the first week, and then tripled that level in week two. Within a few months, more than one million Americans accepted the “Coldwater Challenge,” and word-of-mouth cascaded through ten degrees of separation across all 50 states and more than 33,000 zip codes. In October 2005, Hitwise reported that ranked as the twelfth most popular site by market share of visits in the “Lifestyle—House and Garden” category. No other laundry detergent brand’s Web site has gained a significant Web presence in terms of the number of visits. P&G’s savvy implementation of “The Three Cs”—consumer value positioning on money savings, calibration of consumer knowledge about cold wash effectiveness via an engaging Web site, and credible product messages dispatched by a respected non-profit group and consumers’ Internet networks—set the stage for Tide Coldwater’s successful launch.



Many marketers now grow their businesses by addressing specific environmental issues that are most relevant to their consumers. In the process, they save money and enhance corporate and brand imagery while ensuring future sales for their products. Use the following strategies to create profitable new or improved products and packages that balance consumers’ needs with environmental considerations.

1. Minimize Direct Environmental Impact 2. Use Sustainable Sources of Raw Material
The prospect of rapidly depleting stocks of natural resources and the resulting reality of price increases create opportunities for alternative technologies and new efficiency with product design. For example, paper doesn’t have to come from trees; in fact, alternative sources may be preferable. Promising new sources include kenaf, a fastgrowing bamboo grown in the southern US, and hemp, which is naturally pest resistant, can be bleached with peroxide instead of chlorine, and produces a fiber more versatile than fiber from trees.

3. Source-Reduce Products and Packaging
In the Pollution Prevention Act of 1990, the United States Congress declared "that pollution should be prevented or reduced at its source whenever feasible." Since the cost savings associated with source reduction are roughly parallel to the amount of packaging eliminated, the tenets of this law are not only good for the environment, they are good for business. Less packaging also means less energy required for manufacturing and transportation and less pollution from the production of packaging itself. To source-reduce, consider light weighting products and packages. For example, S.C. Johnson’s steel aerosol cans use 35 percent less tin than the cans of the late 1980s. Concentrate products. Super concentrated laundry detergents, including Lever Brothers’

Wisk Power Scoop, now account for half of the $2.1-billion powder laundry cleaners sold in America. Package in bulk for refilling. Refills used by all-purpose cleaners, to use less packaging per product and save consumers money. Multi-purpose products such as shampoo-and-conditioner-in-one also help to cut down on duplication.

4. Conserve Natural Resources, Habitats, and Endangered Species 5. Use Recycled Content
According to the Environmental Defense Fund, recycling:
• • •

cuts pollution and conserves natural resources conserves energy can be cost-competitive with land-filling and incineration if sensibly designed and implemented creates jobs and reduces costs in manufacturing sectors that are an important part of our economy. With the help of innovative technologies, the use of recycled content in consumer

products has skyrocketed in the last decade. Products that formerly boasted 10 percent recycled content may now incorporate as much as 100 percent post-consumer content. Where even as recently as five years ago, recycled content was limited mostly to paper, glass, metals, and some plastic laundry bottles, now an entire array of high quality products including clothing, garden furniture, paint, and motor oil are closing the loop.

6. Make Products Energy Efficient
Individuals directly consume about 40 percent of the energy used in the U.S. for such things as powering cars, lighting, heating and cooling homes, and running appliances. In the process, they contribute about 40,000 pounds of carbon dioxide emissions a year. However, many thousands of pounds can be eliminated by simple

actions. In fact, the California Energy Commission estimates that cost-effective investments could reduce total U.S. electricity demand by 40 percent to 75 percent.

7. Maximize Consumer and Environmental Safety
Scientific data and empirical evidence continue to link various illnesses with consumer products made from synthetic chemicals. According to the EPA, formaldehyde in wood paneling causes wheezing, organic gases in carpeting cause liver damage, perchloroethylene used to dry-clean clothing causes headaches, and VOCs (volatile organic compounds) in cleaning products cause nausea. Many illnesses can be traced to indoor pollution, which has been proven to be ten times more toxic than its outdoor counterpart. Consumers’ concerns about product safety translate into opportunities for alternative home construction and cleaning products.

8. Make Products More Durable
As demonstrated by historical sales pitches for Maytag Washers and Volvo Cars, consumers value durable appliances and automobiles. Thanks to environmental concerns, long product life will increasingly become a source of added value and an indicator of quality and convenience in many other industries as well.

9. Make Products and Packaging Reusable or Refillable
The throwaway convenience culture is making way for reuse and refilling as alternatives to land-filling, incineration, and even recycling.

10. Design Products for Remanufacturing, Recycling, and Repair
Landfill disposal bans are in force across the nation for such highly toxic items as leadacid batteries, tires, used motor oil, paints, and refrigerators. Due to such legislative pressures as well as extended producer responsibility laws in Europe, a growing number

of manufacturers now design their products for remanufacture, recycling, and repair, and help set up the infrastructures for doing so. Smart marketers are turning these imperatives into opportunities to save money, enhance quality and get closer to their customer.

11. Make Products Safe for Disposal 12. Make Products and Packaging Compostable
In nature, everything is recycled. Waste for one organism becomes food for another. According to EPA, 40 percent of our solid wastes are biodegradable materials that can be effectively composted into humus, an organic matter that can enrich gardens and agricultural soils. This has important implications for businesses, and a number of innovative designers are developing products with this idea in mind.


The currency of the green business world is innovation, flexibility, change and heart. New rules have emerged from the cloud of green marketing dust kicked up in the late 1980s and early 1990s. We know better what works - and what does not. Seven strategies that work are listed in Exhibit 1.


Equipped with a better grasp of ecological issues, enlightened businesspeople voluntarily adopt environmentally responsible business practices. A growing number of CEOs now appreciate the link between environmental responsibility and more efficient and profitable - business practices. And more and more business communicators know how to use green marketing strategies to take advantage of opportunities to boost their corporate environmental images.

Many companies, and especially those in such highly polluting industries as chemicals, oil, and electrical power generation, now have management systems in place to make sure corporate environmental profiles and products exceed consumers’ expectations. Today, major U.S. corporations conduct environmental audits and recycle their waste. Countless others upgrade their facilities with energy-efficient technologies. Such steps reduce operating costs and liability while boosting profits. Producing eco-efficient products creates less waste, uses fewer raw materials and saves energy, too. Thanks to innovative manufacturing processes suggested by highly motivated and environmentally trained employees, Interface, the world's largest producer of commercial carpeting, projects a savings of more than $35 million by the end of 1997. The changes required for making and marketing environmentally sensitive products enhances employee morale and productivity with a payoff in improved customer relations and overall returns on investment. Enhanced corporate imagery ensues, and this can help attract investors and top talent.

Many marketers now know that being the first to the shelf with an environmental innovation brings competitive advantage. Since 1993, Rayovac introduced Renewal brand reusable alkaline batteries and redefined the market for re-chargeable. With 50 percent of the production capacity for phosphate detergents, German-based Henkel

pioneered the market for zeolites and claimed market leadership when their consumers shifted to phosphate-free detergents. Philips Lighting, inventors of compact fluorescent lighting technology, stood ready when businesses and electric power utilities came calling for replacements for energy-guzzling incandescent. Wellman, Inc., has expanded its business definition from plastics recycler to pioneers in the market for branded polyester fiber made from used Coke bottles. Many of these leaders have been showered with any number of eco-accolades now offered by industry, media, government or environmental groups. One example is the Special Edison Award for Environmental Achievement bestowed by the American Marketing Association. It has been won by Fortune 1000 firms including 3M and Procter and Gamble as well as by a raft of up-and-coming firms with a deep-green orientation like Natural Cotton Colours, Patagonia, and Tom’s of Maine. Young, aggressive competitors adept at capturing the imaginations and winning the hearts of highly desirable environmentally and socially conscious customers are introducing some of the most exciting green products. The success of Patagonia outerwear, Stonyfield Farm Yogurt, and Tom’s of Maine toothpaste suggest that consumers now have higher expectations for the products they buy and that quality is an image that no longer stands apart from environmental impact. Looking to cash in on the potential for future green-oriented sales, wellestablished mass marketers now shop for green companies with promising green brands; recent acquisitions include Earth’s Best Baby Foods (by Heinz), Murphy’s Oil Soap (Colgate- Palmolive), EarthRite Cleaning Products (Reckitt & Colman). After nearly two decades of compromising on quality –and languishing on once-dusty health food store shelves as a result–today’s crop of green products finally embody all that consumers demand: an opportunity to clean up the mess without having to give up price or quality. With the deepened consumer confidence in green products that results, the market becomes legitimized.

Times are tough for marketers of branded products. Brand loyalty is near all time lows, and the percentage of Americans who feel that some brands are worth paying more

for is declining. In this tough, competitive climate, environmental compatibility breaks ties at the shelf. Pragmatic consumers skew purchases to those products and packages that must be recycled or otherwise safely disposed of in their communities. All else being equal, many consumers look to do their bit by happily switching brands, or "boycotting" those companies and products deemed environmentally sound and boycotting the brands of companies with disappointing environmental track records. Theses growth opportunities have not been lost on such market leaders as Procter & Gamble, McDonald's, and Compaq. They offer the greenest of mainstream products and take pains to project environmentally appropriate corporate images. Pick up a bottle of Tide laundry detergent and learn how it is "phosphate-free," contains "biodegradable cleaning agents," and is packaged in a "recycled-content" bottle. Check out the basic brown paper carry-out bags and speckled (recycled) napkins at McDonald's (they are now testing "Earth Shell" compostable food wraps), and buy a Compaq PC emblazoned with the Energy Star energy-saving designation. Many executives would be shocked to discover just how many consumers are aware of - and act upon - their knowledge of corporations’ track records for environmental, and also social, responsibility. In one poll conducted by the Porter Novelli public relations firm, for example, consumers were five times more apt to believe that a company’s record on the environment was an "important" factor in their purchasing decisions than corporate executives believed.

While much brand switching is conducted in the name of altruism, what attracts many consumers to greener products is quite simply the prospect of higher quality: watersaving showerheads slash energy bills, concentrated laundry detergents are easier to carry and store, and nontoxic garden products are safer for children. Except these enhanced primary benefits–of performance, convenience, price, and safety, for example–that accompany environmental improvements to continue to propel the market for environmentally preferable products in the years and decades ahead.

Green marketing offers a rare opportunity to integrate one’s values into the workplace. Creating products that are more in sync with nature allows one to personally contribute to environmental cleanup and help ensure a more secure future for our children. A mind once expanded never goes back to where it was. No longer content to promise consumers that their clothes will become "whiter than white" or breath that is "fresher than fresh", green marketers–like their bosses who manage for a double bottom line–cultivate higher levels of satisfaction and reward. They offer their consumers the prospect of healthier, more fulfilled lives, and the power to make the world a better place.




The research conducted for this report is based on secondary resource with the help of officials of five companies. Every company has its own environmental strategy and thus the efforts made by each company can not be measured on a common scale. Thus the research is totally based on the interviews conducted which have been mentioned below. These officials helped me with the research by discussing their environmental policies and the strategies related to them as to how they reach out with these strategies to their consumers. This often creates goodwill among the consumers about the products from these companies. The excerpts from the interviews have been given below. The companies and the officials who helped in this research were all from different fields ranging from Information Technology to Telecomm and Manufacturing to FMCG. The list of the companies and officials is given below: • • • • • Suzuki Motorcycles – Mr. Abhishek Sinha, Manager - Human Resource. Bharti Airtel – Mr. Gaurav Tyagi, Manager – Marketing. IBM India – Mr. Shantanu Varma, Country Manager. PepsiCo India – Ms. Anupama Priyadarshini – General Manager. Kapoor Light Life Style – Mr. P. Rajasekhar – Vice President

The interviews focused mainly on one thing i.e. how the consumer has become aware about the various hazards in the environment. The consumer today cares about the environment and likes to go for environment healthy products. Also the companies have to focus on a greener environment within their infrastructure for the well being of their own employees. The interview was then analyzed and on the basis of this analysis this report was structured. The excerpts from this interview are given below.

Mr. Abhishek Sinha, Manager (HR), Suzuki Motorcycles:

On plant area and production capacity: “SMIPL manufacturing plant installed in Gurgaon (Haryana) having the annual plant capacity of 1,75,000 units. We have got total land area of 37 acres and out of which presently our plant is constructed in 6.5 acres of land and remaining area is left for the land development and future expansion.” On the priority given to the cleanliness of the environment at Suzuki Motorcycles: “At Suzuki, the philosophy of keeping “environment first” is properly percolated downwards. To comply with all applicable legislations and setting standards thereof remains only a beginning. We thrive to discover and invent mechanisms for better environment management systems and it’s a continuous process which is managed by a separate wing of experts and specialist in the field.” On any new environmental measures adopted by Suzuki: “The biggest testimony of Suzuki’s commitments towards “environment first” is seen in the new plant of Suzuki two wheelers at Gurgaon which is built to be a Zero discharge plant.” On the Lighting and material used by Suzuki:

“We have embraced Natural light optimization system and water harvesting systems besides several other measures to create better and cleaner environment around us. All packaging material used by Suzuki is re-cycleable. A constant flow of internal communication on environment related issues not only creates awareness amongst employees but also helps in inculcating ‘an environment friendly’ value system.” On environmental measures taken for the benefit of the employees: “To take care of the health of all our employees, we maintain all international parameters and standards for drinking water, treated water, ambient air shop floor, office and the outside. We keep updating all these standards of health and welfare of employees through a team of well qualified personnel in the R & D laboratory.”

Mr. Shantanu Varma, Country Manager, IBM India:

On Challenges, products and softwares developed by IBM for addressing the environmental issues: Around the world, there is an increasing awareness that human activity may threaten delicate ecological systems. From evidence of global warming to concerns about water and soil toxicity, individuals and groups are asking what they can do to reduce their environmental impact. We at IBM provide solutions for different organizations facing ecological problems. The challenges have become clear: the need for clean water and air; affordable and reliable delivery of energy; the dwindling supply of fossil fuels; the reality of climate disruption and its implications for future generations. On the approach adopted by IBM towards a cleaner and greener environment: At IBM, our approach is twofold: we are working to make our existing products and processes more efficient for both the environment and for business, while also developing new innovations that can accelerate the adoption of products and services that have lesser environmental impact. On any particular agenda or priority list followed by IBM towards addressing environmental issues:

Today's energy- and climate-related issues are at the top of our strategic agenda. We recognise that information technology plays an extremely important role in helping solve the myriad of ecological challenges faced by the global society—such as conserving our scarce resources even as global demand skyrockets, reducing pollution, minimizing the environmental impact of our activities, and enabling safe and renewable alternative sources of energy. On any new ecological services that IBM offers: We have focused a lot on water related issues because IBM’s Institute for Business Value conducted a survey of more than 100 public and private sector executives. About 77 percent of respondents said they consider water management “extremely important” to their organizations, and 71 percent expect, over the next five years, for water to create more business cost and complexity. Thus we came up with some services that would address the problems related to water. • Natural Water Resources - Provides sensor data integration, analysis and visualization to enable the measurement, modeling and management of water levels, usage and quality in natural water resources. • Water Utilities - Enables water providers to make rapid decisions regarding business processes and operational efficiency to maximize their return on investments as well as foresee and quickly respond to contamination issues and emergencies. • • Water Infrastructure - Provides sensing systems for managing water Water Metering - Improves management of water supply and demand by infrastructure, such as levee oversight management and flood control. integrating data between the dozens of stakeholders involved. Provides all stakeholders with consistent, real-time information to help them work together to make critical decisions about water supply in a geographic region. • Green Sigma for Water - A business consulting service that identifies where water is being used, measures and monitors usage, and creates process

improvements to reduce water use. IBM pilots have achieved reductions in water usage of 30 percent. On initiatives taken by IBM for a greener environment: As part of IBM's Big Green 2.0 initiative, we are continually looking at ways to assist business in running their IT operations with greater efficiency and sustainability. The project Big Green tackles the problem of the Global Energy Crisis. Here we address the problem of energy conservation with the efficient use of IT. We have developed various software solutions which help the organizations in running their systems by using minimal energy resources.

Ms. Anupama Priyadarshini, General Manager, PepsiCo, India:

On policies adopted by PepsiCo: PepsiCo India is striding ahead rapidly towards enabling the global vision to be the world's premier consumer products company focused on convenience foods and beverages. PepsiCo India seeks to produce healthy financial rewards for investors as it provide opportunities for growth and enrichment to its employees, business partners and the communities in which it operates. On Step taken towards replenishing water as they are more into beverages: PepsiCo is committed to minimizing the impact of its business on the environment and recognizes that corporations can play a key role in using scarce resources such as water with care and responsibility. While agriculture utilizes the bulk of fresh water in India (83%), industry uses 6% of which the beverage industry uses but a mere 0.04%. But every drop counts, and PepsiCo India's primary focus in its beverage and snacks plants has been on conserving water at each stage of the manufacturing process. In 2003, PepsiCo India embarked on its quest to achieve positive water balance by 2009. That means PepsiCo India will conserve, recharge, and thus replenish more water in its plants and in its communities, than the total water it uses to manufacture beverage products.


On initiatives taken by PepsiCo for waste management: PepsiCo India continues to strengthen its Solid Waste Management initiatives in partnership with Exnora, an environmental NGO. This award winning, income generating partnership currently impacts more than 1,00,000 people in Tamil Nadu, Andhra Pradesh and Haryana will reach out to more than 2,00,000 people in 2008. Despite the creation of a detailed policy on Solid Waste Management and Handling rules in 2000, very few municipalities in the country were able to completely comply with these rules. PepsiCo India and EXNORA effectively implemented a model project in Pammal district in Tamil Nadu that adhered to the Government policy on waste management. The project created a visible difference in the local environment of the region. PepsiCo India’s foods division, Frito Lay, also generates biofuels from waste in its plants thus reducing methane emission and 875 MT of CO2 emission annually, in addition to achieving 14% reduction in energy use. New capacity expansion in plants has been designed to impact further reductions in water, power and fuel.
On PepsiCo’s partnership with farmers:

PepsiCo's involvement in Indian agriculture stems from its vision of creating a costeffective, localized agri-base in India by leveraging farmers’ access to world class

agricultural practices. PepsiCo India worked with farmers and State Governments to improve agri sustainability, crop diversification and raise farmer incomes. PepsiCo helped transform the lives of thousands of farmers by helping them refine their farming techniques and raise farm productivity, and customized solutions to suit specific geographies and locations. The most ambitious project is a joint programme, launched in 1989, between PepsiCo India, the Punjab Agriculture University (PAU) in Ludhiana and Punjab Agro Industries Corporation (PAIC) in Chandigarh. The programme focuses on evolving agricultural practices to help Punjab farmers produce internationally competitive products. Over the last five years, PepsiCo has also collaborated with the Thapar Institute of Technology to develop a high quality potato seed programme. On partnership with TERI (The Energy and Resources Institute): TERI was established in 1974 with the purpose of tackling and dealing with the immense and acute problems that mankind is likely to be faced with in the years ahead on account of the gradual depletion of the earth’s finite energy resources which are largely nonrenewable and on account of the existing methods of their use which are polluting.Over the years the Institute has developed a wider interpretation of this core purpose and its application and has created an environment that is enabling for the development of solutions to global problems in the fields of energy, environment and current patterns of development, which are largely unsustainable. The Institute has grown substantially over the years, particularly, since it launched its own research activities and established a base in New Delhi, its registered headquarters. The central element of TERI’s philosophy has been its reliance on entrepreneurial skills to create benefits for society through the development and dissemination of intellectual property. The strength of the Institute lies in not only identifying and articulating intellectual challenges straddling a number of disciplines of knowledge but also in mounting research, training and demonstration projects leading to development of specific problem-based advanced technologies that

help carry benefits to society at large. This association helps us in addressing the conservation of energy issue.

Mr. Gaurav Tyagi, Manager (Marketing), Bharti Airtel:

On Airtel’s infrastructure and expansion: The company is a part of Bharti Enterprises, and is India's leading provider of telecommunications services. The businesses at Bharti Airtel have been structured into three individual strategic business units (SBU’s) - mobile services, broadband & telephone services (B&T) & enterprise services. The mobile services group provides GSM mobile services across India in 23 telecom circles, while the B&T business group provides broadband & telephone services in 90 cities. The Enterprise services group has two sub-units - carriers (long distance services) and services to corporates. All these services are provided under the Airtel brand. On initiatives taken towards building a better and greener environment: We generate e-bills which support the cause “Save Paper”. If a customer doesn’t mind not receiving bills on paper we send him E-bills on his mail. We try and address as many customers as possible and try and make them understand that it would be better if they received e-bills as it would reach them quicker and more importantly save paper and help the environment. Up till now we have had a great response from the consumers which show how environment conscious they are. On any more initiatives taken up by Airtel: We are a telecom company and so we do not have a lot of initiatives as we don’t need them but the Bharti Group has a 50:50 Joint Venture with DE Rothscheld. In addition to

being the world’s second largest producer of fresh fruits & vegetables, India is also amongst the lowest cost producer of farm products. To capitalize on such inherent advantages, Field Fresh Foods plans to employ the world’s best practices and technology to work towards converting India into a preferred “World Food Basket”. As part of its commitment to the green field project, the company plans to set up a world-class “Agri Research Center” and a “Model Farm” in Punjab in the first phase. The state of the art agri research center will primarily carry out research on hybrid seeds and agro farming techniques. The research center will work towards the identification and adoption of conventional and emerging technologies and promote their “On Field” usage to further enhance agricultural productivity in an environmentally sustainable manner.

Mr. P. Rajasekhar, Vice President, Kapoor Light Life Style:
On plant area and production capacity: “We don’t have a manufacturing unit. All our products are imported and then assembled in our assembling unit. The products that we make are outsourced in various parts to different vendors who after making those parts send them back to us. After this our assembling unit takes over and assembles the product as a whole.” We have a work force of 70 people in our assembling unit in Okhla, New Delhi.” On the priority given to the cleanliness of the environment at Kapoor Light Life Style: “We use dies and colours which are non toxic. Also the materials used are all recyclable. We also have proper waste disposal facility in our assembly unit and we take it as our endeavour to keep the environment clean and green.” On the materials used by Kapoor Light Life Style: “We are the oldest and most trusted lighting company in India. We understand that our customer expects us to use the best material and at the same time he is well educated and thus understands the need of a clean environment. We thus use recyclable and bio degradable materials only in our products. Our product mainly consists of fabric, metal, non toxic dies and glass. We DO NOT use plastic in our products. The crystals that we use are electro statically charged and thus do not allow dust to settle on them.” On the packing material used:

“We make it a point to use recyclable packing material for our products. These materials do not harm the environment in any way and are completely environment friendly.”



Green marketing should not neglect the economic aspect of marketing. Marketers need to understand the implications of green marketing. If you think customers are not concerned about environmental issues or will not pay a premium for products that are m o r e e c o - r e s p o n s i b l e , t h i n k a g a i n . Y o u m u s t f i n d a n o p p o r t u n i t y t o e n h a n c e y o u product’s performance and strengthen your customer's loyalty and command a higher price. Green marketing is still in its infancy and a lot of research is to be done on green marketing to fully explore its potential.


• Reduce production of harmful goods or by-products • Modify consumer and industry's use and/or consumption of harmful goods • Ensure that all types of consumers have the ability to evaluate the environmental composition of goods

What we should do: a) Less use of polythene b) Less use of mobile phone c) Crush plastic bottle after use d) Use disposable items e) Save water f) Save fuel g) Avoid smoking

1. Green Marketing New Hopes & Challenges- By Dr. Vemuri Laxmi Narayna 2. The New Rules For Green Marketing- By Jacquelyn Ottman (Published by Berett Koheler)

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