CHAPTER 28
Green marketing
KEN PEATTIE
Introduction
It is 20 years since the publication of the Brundtland
Report ‘Our Common Future’ (WCED, 1987) brought
the concept of ‘Sustainable Development’ into the
mainstream of business and political debate. It
put forward a convincing case that the economic
growth that had characterized much of the twenti-
eth century was not sustainable in environmental,
social and ultimately economic, terms. In the
wake of the Earth Summits at Rio in 1992 and
Johannesburg in 2002, the World’s governments
and major corporations have generally adopted the
pursuit of sustainability as a strategic goal. The
challenge lies in turning these good intentions into
meaningful progress in the face of powerful vested
interests, an entrenched and environmentally hos-
tile dominant social (and management) paradigm
and a global economy with tremendous momen-
tum on a trajectory that pursues conventional eco-
nomic growth.
For marketing, the challenge is two-fold. In the
short term, ecological and social issues have become
significant external influences on companies and
their markets. Companies have to react to changing
customer needs, new regulations and a new social
zeitgeist which reflects increasing concern about
the socio-environmental impacts of business. In the
longer term, the pursuit of sustainability will
demand fundamental changes to the management
paradigm which underpins marketing and other
business functions (Shrivastava, 1994). This chap-
ter aims to illustrate how the ‘green challenge’ is
exerting an influence on current marketing practice,
and how its implications will eventually require
a more profound shift in the marketing mindset,
if marketers are to continue delivering customer
satisfaction at a profit.
Green marketing in context
Management theory is firmly rooted in an eco-
nomic and technical systems perspective which
concentrates on exchanges, products, production
and profits. Over time it has evolved to become
more ‘human’ with the emergence of disciplines
like organizational behaviour, human resource
management, business ethics and societal market-
ing. The fact that businesses are physical systems
existing within a finite and vulnerable natural envir-
onment has, until recently, been largely ignored as a
management and marketing issue.
The emergence of the physical environment
as a strategic marketing issue has evolved through
several stages. In the 1970s a wave of environ-
mental concern linked to the oil ‘shocks’ of the
period, several major pollution incidents and evi-
dence of the human and environmental impacts of
chemicals such as DDT and pollutants such as air-
borne lead, spawned the concept of ‘ecological
marketing’ (Hennison and Kinnear, 1976). This
was largely concerned with those industries with
the severest environmental impacts (including
oil, cars and chemicals), and with the need for new
technologies to alleviate particular environmental
problems.
During the 1980s concern about the environ-
mental impacts of business resurfaced following
several major environmental incidents such as
Green marketing
the Exxon-Valdez oil spill and the chemical plant
explosion at Bhopal and mounting evidence of
man-made stress in global environmental sys-
tems (including evidence of rainforest depletion,
global warming and a hole in the stratospheric
ozone layer). This concern led to consumer boy-
cotts, new environmental legislation and a grow-
ing demand for ‘green’ products such as recycled
paper, unleaded fuel, energy efficient appliances
and organic food. These developments affected a
much broader range of industries than during the
1970s, and there was widespread discussion about
the implications of environmental concern for mar-
keting using labels including ‘green marketing’,
‘greener marketing’ and ‘environmental market-
ing’. This discussion was largely an extension of
the societal marketing concept, with a focus on the
responsibilities of marketers and the need to con-
strain and ameliorate the environmental impacts
of marketing activities through product innova-
tions and adapted production processes.
During the 1990s academics within the mar-
keting discipline began to seriously discuss the
physical implications and sustainability of market-
ing (e.g. O’Hara 1995; van Dam and Apeldoorn
1996), and to consider the environmental, social
and economic dimensions of marketing in a more
integrated way. The original ‘managerialist’ stream
of research discussing how sustainability issues
could be integrated into marketing practices was
complemented by more critical and challenging
work, which questioned some of the more funda-
mental assumptions about marketing (Kilbourne
and Beckman, 1999). Moving into the new millen-
nium, far more radical ideas about the integration
of marketing and the environment began to emerge.
Fuller’s (1999) concept of ‘sustainable marketing’
examined marketing from the physical systems per-
spective of industrial ecology, and set out a practical
approach to marketing as a closed-loop system that
creates no waste and does not degrade natural sys-
tems or resources. Belz (2006) envisions the ultimate
evolution of marketing towards ‘transformational
sustainability marketing’ in which social and phys-
ical problems are as much a starting point of mar-
keting thought processes as customer needs. The
fundamental difference in such visions of market-
ing, is that they do not think in terms of social and
environmental ‘issues’ that must be audited, under-
stood and accommodated within the conventional
marketing strategy process. Instead, sustainability
represents a different approach to thinking about
the economy, business, marketing, consumption
and production.
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The key differences between sustainability
orientated concepts of green marketing (to choose
and use one of the most popular labels) and the
existing societal marketing concept lie in:
䊉 an emphasis on the ultimate physical sustainability
of the marketing process, as well as its social
acceptability;
䊉 a more holistic and interdependent view of the
relationship between the economy, society and
the environment;
䊉 an open-ended rather than a long-term
perspective;
䊉 a treatment of the environment as something with
intrinsic value over and above its usefulness to
society;
䊉 a focus on global concerns, rather than those of
particular societies;
䊉 an emphasis on socio-environmental issues as a
potential source of innovation and opportunity
for marketers, rather than just as a set of
constraints and potential costs.
The concept of sustainability allows the apparently
paradoxical integration of environmental concern
(which traditionally involves encouraging con-
servation), with the discipline of marketing (which
is based on seeking to stimulate and facilitate con-
sumption). A sustainable approach to consump-
tion and production involves enjoying a material
standard of living today, which is not at the
expense of the standard of living and quality of
life of future generations. It is a deceptively simple
concept involving two key principles:
1 Using natural resources at a rate at which
environmental systems or human activity can
replenish them (or in the case of non-renewable
resources, at a rate at which renewable
alternatives can be substituted in).
2 Producing pollution and waste at a rate which can
be absorbed by environmental systems without
impairing their viability.
The nature of green marketing can therefore be
summarized as ‘The holistic management process
responsible for identifying, anticipating and satisfying
the needs of customers and society, in a profitable and
sustainable way’ (Peattie, 1995). Green marketing’s
key concepts of sustainability and holistic thinking
are both apparently simple, but can be extremely
difficult to translate into action. This is because
conventional management wisdom emphasizes
reductionalism and specialism, and is founded on
564 The Marketing Book

Increasing sophistication Increasing breadth of

of strategic challenges strategic vision

Product

Firm

Customers

Competitors

Industry structure

Economy

Society

Global socio-economic system

Global physical environment

Figure 28.1 The physical environment as the foundation of the marketing environment

economic theories which mistakenly treat environ-
mental resources as limitless, free (beyond the cost
of extraction) or, for commodities like stratospheric
ozone without a market, worthless. Green market-
ing attempts to relocate marketing theory and prac-
tice away from the economic hyperspace it has
evolved in, and bring it back down to earth and
reality.
Reconceputalizing the marketing
environment
Companies benefit from a marketing orientation
in many ways, one of the most important being
the external focus on the marketing environment
it encourages. However, marketing theory has fol-
lowed the tradition of mechanistic economic mod-
els, which ignore the ecological contexts in which
economic activity occurs (Capra, 1983). So the
‘marketing environment’ is frequently considered
in social, cultural, technological, economic and
political terms, whilst ignoring the underlying nat-
ural environment. At best, the response to increased
environmental concern has been to accommodate
it within existing models of the environment (of the
PEST type) by discussing it as a political pressure,
an influence on the economics of business, a social
trend or a technological challenge. The reality is
that the physical environment is the foundation on
which societies and economies are based. Figure
28.1 visualizes the marketing environment as com-
posed of layers of issues and interactions.
The most immediate issues for marketing
managers are typically internal ones related to
product management and the internal company
environment, and externally to customers. Beyond
this, the analysis of the environment broadens out
through different, but interwoven, levels of envir-
onment. Each level has important implications for
marketing, but dealing with the deeper levels of the
environment is perhaps a more difficult strategic
challenge, due to their increasing breadth and
Green marketing
complexity, and their decreasing proximity to the
company itself. The physical global biosphere
may seem distant to many companies’ daily activ-
ities, but ultimately all business activity depends
upon it, and its continuing stability and viability.
Problems in the underlying global physical envir-
onment will impact firms, and their products and
strategies, through interactions with each layer of
the model.
Global physical environment
At the simplest level the environment affects busi-
nesses because it represents the physical space
within which they and their customers exist, and it
provides the resources upon which they depend.
The human economy also ultimately depends
upon the ‘services’ that the biosphere, and the
ecosystems within it, provides. The UN’s ‘Millen-
nium Ecosystem Assessment’ provided an audit
of scientific evidence concerning ecosystems. It
showed that the unparalleled economic growth
of the previous 50 years had ‘resulted in a substan-
tial and largely irreversible loss in the diversity of life
on Earth’ and that ‘gains in human well-being and
economic development, . . . have been achieved at grow-
ing costs in the form of the degradation of many
ecosystem services . . . and the exacerbation of poverty
for some groups of people. These problems, unless
addressed, will substantially diminish the benefits that
future generations obtain from ecosystems’.
For some companies there is a very direct rela-
tionship between the health of the environment
and their business prospects. The fishing industry’s
agenda, for example, is dominated by the need to
protect stocks from over-fishing. An authoritative
international study published in Science during
2006 demonstrated that one-third of existing
global fisheries had ‘collapsed’, and the impact of
current fishing practices on marine ecosystems
would destroy the others by 2050. In early 2007
the report of the Intergovernmental Panel on
Climate Change, largely ended the debate about
climate change and man’s contribution to it, and
demonstrated that carbon dioxide levels had rap-
idly climbed to their highest point in 650 000
years. The likely direct effects in terms of climate
disruption now pose a serious threat to compa-
nies in tourism, agriculture, insurance or simply
to those situated in coastal zones and on flood
plains.
Although global issues such as climate change
dominate the headlines, the green agenda contains
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a range of issues, each creating marketing oppor-
tunities and threats. Concerns about carbon diox-
ide emissions and climate change constitute a
major threat for car and oil companies but an
opportunity for those working in alternative
fuels and energy efficiency devices. All of the
other major industries in the world also face
important environmentally related challenges. In
tourism, destinations need to be developed sus-
tainably to prevent them being degraded by their
own success in attracting visitors, and to safe-
guard the cultures and lifestyles of the local popu-
lation. Carbon emissions linked to holiday travel
and cheap flights, and pollution impacts linked to
the growing number of cruise ships visiting envi-
ronmentally sensitive areas, are also placing the
industry under pressure. For the car industry, air
pollution, global warming and the fate of cars at the
end of their working lives are key issues. For elec-
tronics companies end-of-life products (especially
the export of e-waste to poor countries), energy
consumption and the use of solvents are pressing
issues. For agriculture, forestry and fishing, the
consequences of unsustainable production in terms
of loss of biodiversity, deforestation and soil ero-
sion are crucial issues for the future. Even in the
apparently abstract world of financial services
there is increasing concern about environmental
instability as a source of risk and insurance claims.
Global socio-economic system
The biosphere is effectively a single complex global
system that transcends geo-political boundaries.
Recent decades have also seen a more global social
perspective reflected in global companies, mar-
kets, technologies and socio-cultural trends. The
political response to the green challenge has also
become more globalized through international
environmental legislation and agreements (such as
the Montreal Protocol to reduce CFC use, or the
resolution on climate change signed by 20 of the
largest countries early in 2007), and intergovern-
mental conferences. Although issues of social con-
cern vary over time and between countries, survey
data reveals that concern about the state of the
environment is spread across the planet, and (con-
trary to many peoples’ expectations) is shared by
the populations (if not always the governments)
of the less-industrialized as well as the industriali-
zed nations.
There is also growing concern about the
power, influence and accountability of global cor-
porations. In a world still largely governed through
566
national laws, it is a considerable challenge to
ensure that the behaviour of trans-national corpo-
rations, of which over 60 000 now exist, does not
sacrifice the social and environmental interests of
citizens in some countries for the benefits of
shareholders and consumers others.
The global socio-economic system is highly
complex and has a complex relationship with the
physical environment. Initiatives aimed at tackling
one problem can often exacerbate another. During
2006 many American farmers took advantage of a
growing demand for alternative fuels by selling
their corn crop for ethanol production. This led to
a shortage on the corn market which pushed up the
prices of tortillas, the staple food for the poor
within Mexico, by over 400 per cent sparking wide-
spread social protests. The relationship between
global trade liberalization, poverty alleviation and
environmental degradation is complex, contro-
versial and goes beyond the scope of this chapter.
What is clear is that the economies of countries
such as India and China are expanding rapidly.
The Goldman Sachs Group forecast per capita GDP
in China to rise from US $1324 in 2005 to $4965 by
2020, and in India from $559 to $1622 by 2020.
These increases of 375 and 290 per cent respectively
in per capita consumption growth, within coun-
tries that are also experiencing rapid population
expansion, will be environmentally disastrous if
the systems of consumption and production they
develop mirror those that have emerged in recent
decades in industrialized economies such as the
UK and USA.
Society
Concern about the socio-environmental impacts
of business is generally increasing, and is being
reflected in a number of ways including:
䊉 Changing values and attitudes:There is increasing
public concern about the environment and
declining levels of trust placed in companies and
other institutions.A 2005 TNS/6th Dimension
survey of European countries showed that almost
60 per cent of Europeans favoured tough
international legislation to restrict environmental
damage by companies, and only 6 per cent
believed environmental threats had been
‘overhyped’.
䊉 Pressure group activity:The size, budgets and
sophistication of pressure groups concerned with
the socio-environmental impacts of businesses
have increased significantly over the past 20 years.
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Many of their communications campaigns are now
produced by the same agencies that work for
major corporations.As the experience of
companies like Nike and Gap has shown in
relation to international labour standards,
companies with the most famous brand names are
the most likely to be targeted, even though they
may not be the worst offenders.There has also
been a recent trend towards partnership
approaches between pressure groups and
companies, often as part of cause-related
marketing initiatives.The Marine Stewardship
Council (MSC) scheme to manage the world’s fish
stocks more sustainably was established in 1995
through a partnership between Unilever and the
World Wide Fund for Nature (WWF).
䊉 Media interest: News stories relating to current or
impending crises such as climate change,
deforestation or global poverty can increase levels
of awareness, perceived salience and urgency
amongst the public. Entertainment through factual
films such as Al Gore’s ‘Inconvenient Truth’ and
fiction such as ‘The Day After Tomorrow’ have
also raised awareness about climate change
amongst audiences unlikely to take an interest in
the scientific debate. However, there is a tendency
for ‘boredom’ to set in regarding an issue, and the
media’s supportive interest in the emergence of
an alternative green business or product will often
change to destructive criticism once it is
established (Thrørgersen, 2006).
䊉 Political and legal interest: Government policies
across the world are seeking to promote the
development of more sustainable production and
consumption systems.The quantity and
complexity of social and environmental legislation
faced by companies therefore continues to grow.
Businesses in Europe are now affected by over 80
EU environmental directives and regulations.
Regulations in several industries are imposing
extended producer responsibility and requiring
companies to undertake collection and
responsible reuse or disposal of end-of-life
products. Examples such as the End-of-Life
Vehicles (ELV) Directive or the Waste Electronic
and Electrical Equipment (WEEE) Directive are
profoundly affecting the automotive and
electronics industries. Companies that rely on
mere compliance risk being left behind by the
upward ‘ratcheting’ of legislation. In the USA, the
trend towards forcing the CEOs of polluters to
make personal court appearances, and in some
cases jailing them, has helped to focus corporate
minds.
Green marketing
The economy
Investments in environmental protection were con-
ventionally viewed as involving a trade-off with
economic growth and competitiveness (Porter and
van der Linde, 1995). Recognition is growing that
these issues are interlinked in complex ways, and
that long-term economic growth will be dependent
on better environmental protection. Many business
opportunities are now emerging for technologies,
goods and services that address environmental
problems, or at least make less of a contribution
towards them. The European Commission esti-
mates that by 2010 ‘environmental industries’ will
be worth $640 billion, and that their growth will
provide an additional half million European jobs.
Key areas where environmental concern is
influencing economic issues include:
䊉 Production economics: Environmental considerations
are radically altering the production economics of
‘front-line’ industries such as cars, electronics,
chemicals and power generation. Rising landfill
costs, and tougher regulations on emissions mean
that production costs are increasingly influenced,
not by what has gone into a product, but by what
is discarded when making it.
䊉 Investor interest: Interest in ethical and
environmental investment has grown with
initiatives such as the FTSE4Good index of
socially responsible companies, and changes to
legislation requiring institutional investors to focus
more on the social and environmental
performance of holdings.According to the Social
Investment Forum the total value of socially
responsible investments in the UK rose from £23
billion in 1997 to £225 billion in 2001, whilst in
the USA it had reached over $2.3 trillion.
䊉 Green taxes:A new generation of environmentally
related taxes including landfill taxes, climate
change levies, air passenger duties and road
pricing are being introduced in many countries.
There are also product specific taxes being used
to encourage particular changes in consumer
behaviour. In 2002 the Republic of Ireland
introduced a plastic bag tax of €0.15 which
resulted in a 90 per cent drop in shopping bag
consumption (with around one billion fewer bags
consumed annually), which also raised around
$9.6 million for investment in environmental
technologies (a surprising result from changing
one small marketing variable in one country).
䊉 Access to capital: Environmental performance is
seen by lenders and investors as an important
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influence on risk in many industries.An effective
environmental strategy is becoming important to
guarantee access to capital and insurance in a
number of environmentally sensitive industries.
There are also growing examples of private equity
being used to back environmental technologies,
such as Bill Gates’ $84 million investment in
alternative fuels businesses.
Industry structure
Industry structures are conventionally visualized
as composed of linear exchanges and value chains.
The green challenge is one of many forces encour-
aging a more relationship-based view of industry
structures, particularly through an emphasis on
recycling and supply loops. These feature relation-
ships in which the customer returns products or
packaging to the manufacturer, and in the process
become another form of supplier. Fuji Xerox are
recycling veterans having begun the routine reuse
of components in 1968. Their 2006 Sustainability
Report cited 20 000 end-of-life products collected,
with 99.2 per cent of their components being
recycled, avoiding 900 tons of landfill waste.
The changes that greening is bringing to
industry structures include:
䊉 The threat of substitutes: Products with a relatively
poor eco-performance can become targets for
new substitutes. Concern about the destruction
of peat wetlands has led to a number of products
such as ground coconut husks being launched to
act as a peat substitute for gardeners. In the
future a more radical set of substitutions may
emerge, as markets which were traditionally based
around purchase and ownership of products
move towards greater use of services, hire and
leasing (Cooper and Evans, 2000).
䊉 Supplier relationships: Greening is forcing many
companies to reconsider supplier relationships,
since their total environmental impact will be
strongly influenced earlier in the supply chain.
Tools like ‘life cycle analysis’ and social/
environmental supplier audits are being used by
companies to monitor, and often to work in
partnership to improve, their suppliers’ social and
environmental performance (or eco-
performance).
䊉 Market entry barriers: Strict national environmental
laws can act as an entry barrier. Recent years has
witnessed friction between the USA and the EU
over the EU’s resistance to genetically modified
(GM) food.The EU’s concern about the health and
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environmental safety of GM crops being
interpreted by the USA as a disguised market
entry barrier. For some companies, good
environmental performance can act as a key to
gain entry into a new market.Varta batteries had
failed in several attempts to translate their
European market strength into penetration of the
UK market, but this was achieved very rapidly
with the introduction of their innovative
mercury-free battery range.
Competitors
Over the last 20 years, in a wide range of markets,
including detergents, retailing, ice cream, batteries,
white goods, cars, toilet paper and banks, com-
panies have used eco-performance as a basis on
which to compete. Global competition and con-
tinuous improvement philosophies have nar-
rowed the differences between products to the
extent that ‘softer’ issues such as perceived social
and environmental impacts can act as a ‘tie-
breaker’ for the consumer trying to choose brands
(Christensen, 1995). The Cooperative Bank for
example adopted an explicit ethical policy, which
it has since used to differentiate itself and encour-
age customer loyalty, gaining over 200 000 cus-
tomers as a result (Hedstrom et al., 2000).
Experience shows that environmental disas-
ters such as oil or chemical spills put all players in
an industry under increased stakeholder pressure,
and not just the culprits. This suggests that as the
green challenge deepens, it may reduce the inten-
sity of competitive rivalry, instead of acting as a
new arena for it to be played out in. Many key envi-
ronmental problems confront entire industries and
require industry-wide responses. Alliances are
emerging between former rivals to address com-
mon environmental challenges and to develop
greener technologies. In the USA, Ford, Chrysler
and GM have collaborated in an effort to develop
low-emission vehicles (and less proactively in
pooling millions of dollars to lobby against stricter
greenhouse gas restrictions).
Customers
The world-wide boycott of CFC driven aerosols in
the late 1980s first demonstrated the potential of
consumers to unite behind an environmental issue
that they understood and could relate to, in a way
that enforced rapid change to an entire industry
throughout its supply chain. UK research by the
Co-operative Bank suggested that around one in
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three Britons make some purchases on the basics
of ethics and environment, and that at least 5 per
cent consistently search for ethical labelling,
recycle, participate in boycotts and discuss green
issues in relation to the brands they buy. Social and
environmental concerns are also becoming increas-
ingly integrated into business-to-business market-
ing and purchasing (Drumwright, 1994), and
governments are increasingly using their own pur-
chasing power to aid in the development of green
markets. The EU’s Green Public Procurement pro-
gramme is promoting the integration of environ-
mental criteria into the 1000 billion Euros of
European public sector spending (representing 16
per cent of total GDP).
Firms
As external concern about their socio-
environmental impacts grows, so companies
large and small are responding with organizational
changes. The establishment of directorial respon-
sibilities and management positions for corporate
social responsibility (CSR) and/or environment;
the introduction of green auditing and reporting
systems; and changes to company policies and
facilities to reduce waste and pollution are com-
mon responses. Corporate strategies and cultures
are increasingly seeking to address green issues,
often to reflect external stakeholder pressure, but
also to reflect the concerns of employees and
investors. For marketers, pressure to improve the
eco-performance of the products that they manage
may stem from external customer or regulatory
requirements, or it may reflect internal require-
ments to pursue sustainability as a corporate goal.
In the wake of the Enron scandal, and a number of
other high-profile failures of corporate govern-
ance, there has been renewed interest in concepts
such as CSR and corporate citizenship. In progres-
sive companies, what began as environmentally
orientated green strategies have become inte-
grated with other CSR and governance issues to
create a more balanced approach to the manage-
ment and reporting of sustainability issues.
Products
Environmental concern is creating demands for
new products (such as pollution control equip-
ment) and is causing existing products to be
reconsidered and in many cases redesigned,
reformulated or produced differently. It can also
Green marketing
lead to product repositioning, for example health
concerns about increased ultra-violet radiation
levels and the risk of skin cancer, has led to the
marketing of sun tan lotions changing from an
emphasis on sun exposure and beauty to an
emphasis on sun protection. The impact on prod-
ucts varies across markets. In some, such as cars,
cleaning products or paper products, changes are
widespread. In others, such as food, financial
services or computers, examples of change are
more sporadic. There was a flurry of green prod-
uct introductions in the late 1980s and early
1990s, although this later decelerated, mainly in
response to concerns about the validity of some
of the green claims involved (Carlson et al., 1993),
increased levels of media and NGO scrutiny, and
mounting consumer scepticism. By 1997 products
marketed on the basis of green attributes accounted
for 9.5 per cent of all new US product introduc-
tions, with the highest proportion in the ‘house-
hold products’ category, accounting for 29.5
per cent of product introductions (Fuller, 1999).
The greening of marketing strategy
The growing importance of environmental and
social issues throughout the marketing environ-
ment has been reflected in their consideration in
marketing strategy development. Reactive and
defensive strategies based on legislative compli-
ance and bolting on ‘end-of-pipe’ technologies to
alleviate pollution problems have gradually given
way to more proactive and opportunistic strategies,
with new products being developed and pos-
itioned as ‘solutions’ to social and environmental
problems. During the 1990s the argument that
greening can act as a source of competitive advan-
tage emerged from authors such as Elkington
(1994), Azzone and Bertele (1994) and Porter and
van der Linde (1995). Porter and van der Linde’s
argument is that the search for environmentally
superior solutions leads to innovation and the cre-
ation of more efficient and effective technologies.
Their logic is that tough environmental legisla-
tion (often vigorously opposed by companies) cre-
ates new challenges for companies, which prompts
them to innovate and secure improvements in
competitive, as well as environmental, perform-
ance. This is what Varadarajan (1992) termed
‘enviropreneurial marketing’.
Others have argued that it is difficult in prac-
tice to achieve and sustain competitive advantage
569
from good eco-performance (e.g. Walley and
Whitehead, 1994; Wong et al., 1996). The issues
have often proved complex and costly to address;
customers have often proved difficult to con-
vince; greener product offerings have sometimes
struggled to compete on technical merits against
conventional products, and the media has often
proved more critical of those attempting to
improve their eco-performance and capitalize on
it, than of the most polluting and wasteful com-
panies. Ottman et al. (2006) describe this as a new
form of ‘marketing myopia’ in which the enthusi-
asm for a product’s environmental credentials
lead the company to lose sight of its match with
consumer needs and perceptions. Despite this, it
is clear that poor eco-performance can put a com-
pany at a massive competitive disadvantage.
Exxon’s combined bill for clean up costs, fines
and legal costs estimated at over $3 billion in the
immediate aftermath of the Exxon-Valdez disas-
ter, which also left 41 per cent of Americans
describing themselves as ‘angry enough to boycott
Exxon products’ (Kirkpatrick, 1990).
For the marketing strategist it is vital to under-
stand the potential impact of the green agenda on
their business and its customers, and the relative
strengths and weaknesses of their company’s eco-
performance because it can provide:
䊉 New market opportunities: Through access to
growing green markets.At the beginning of the
new millennium, the total market for ‘LOHAS’
(lifestyles of health and sustainability) involved 68
million consumers and was worth $230 billion in
the USA alone, according to the Center for Fair
and Alternative Trade Studies at Colorado State
University. In markets such as financial services
and tourism, green products represent the fastest
growing area for new business.
䊉 Differentiation opportunities:AEG increased their
sales by 30 per cent within an otherwise static
white goods market, following an advertising
campaign stressing the relative energy and water
efficiency of their products.
䊉 Opportunities for cost advantages:Although
conventional wisdom associates good eco-
performance with investment and increased costs,
this is partly a reflection of the ‘end-of-pipe’
methods used (since adding a catalytic converter
onto a car can only increase its costs).
Investments using a more radical, clean technology
approach are capable of reducing material and
energy inputs, and cutting inefficient pollution and
waste.Among 181 waste reduction projects
570
within 29 chemical industry plants studied by
Porter and van der Linde (1995), only one led to a
net cost increase and the average annual savings
(on the projects where this could be meaningfully
measured) was $3.49 per dollar spent.
䊉 Niche opportunities: In the short term, greener
products such as organic food and cruelty-free
cosmetics have succeeded within market niches
comprised of the most environmentally aware
consumers.There is, however, a danger that the
success of green niche products could effectively
hold back the greening of markets.This could
occur if by satisfying the most environmentally
aware consumers, pressure to green the market
becomes diluted and the momentum of change
falters. In many industries it will require the
greening of the mass market to make a substantive
contribution to sustainability (Belz, 2006).
Although controversial, there is growing evidence
from investment returns that good eco-
performance can generate financial out-perform-
ance. For example during 2006 the Co-operative
Insurance Sustainable (CIS) Leaders trust, a fund
that invests only in ethical and green companies,
outperformed all other unit trusts in the UK All
Companies sector.
The green consumer
The ‘green consumer’ has been the focal point of
both new marketing theories and changes to mar-
keting practice aiming to respond to measurable
increases in environmental and social concern
amongst the population. Marketers have sought to
identify, segment and target green consumers by
understanding their characteristics, motivations,
behaviour and willingness to purchase greener
products (preferably at premium prices). If this can
be done, and appropriate market offerings created
in response, then the competitive advantage out-
lined by Porter and others can be achieved.
Academic researchers and market research
agencies have striven to define and understand
the relationship between peoples’ environmental
concern and their purchasing behaviour. Many
factors have been proposed as influences on green
consumer behaviour such as changing consumer
values, demographic factors, knowledge of envir-
onmental problems and alternative products,
perceived personal relevance and the ability of
the individual to make an effective contribution
(for a model which integrates the majority of these,
The Marketing Book
see Dembkowski and Hanmer-Lloyd, 1994). All
of these efforts have sought to discover a reliable
basis to define and target green consumer
segments. Socio-demographic criteria such as gen-
der, age and income have often been used, but
as Wagner (1997) comments ‘Socio-demographic
attempts to profile the green consumer have not always
yielded strongly indicative results, and the results pro-
duced in one study have been repeatedly contradicted
in another.’ Other segmentation attempts have used
environmental attitudes, environmental know-
ledge, level of education, social consciousness or
related behaviours to develop categorizations of
consumers of different shades of green. However,
once again ‘results of these studies were frequently
inconclusive and sometimes contradictory’ (Kilbourne
and Beckmann, 1998).
The difficulties in isolating green consumers
reflect several factors:
䊉 It overlooks the point made by Kardash (1974)
that all consumers (barring a few who enjoy
contrariness for its own sake) are ‘green
consumers’ in that, faced with a choice between
two products that are identical in all respects
except that one is superior in terms of its eco-
performance, they would differentiate in terms of
the environmentally superior product.
䊉 By attempting to relate a consumer’s
environmental concern to purchases, marketing
researchers may be looking in the wrong place.
Many of the most significant contributions that
consumers can make towards environmental
quality come in product use, maintenance and
disposal or in delaying or avoiding a purchase
through a ‘make do and mend’ mentality.
䊉 Environmental improvements in products are
often entangled with economic or technical
benefits. Energy-saving products provide
economic and environmental benefits, and people
may choose organic food for reasons of
environmental concern, personal health concern
or simply for the taste benefits.
䊉 General environmental concern amongst
consumers is not matched by good levels of
‘environmental literacy’ or a clear understanding
of how specific consumption decisions relate to
particular environmental or social problems.
The answer to understanding green purchasing
behaviour, may lie in considering the purchase
rather than the purchaser. If we accept Kardash’s
proposal that, all other things being equal, most
customers would differentiate in favour of greener
Green marketing
products, then understanding green purchasing
behaviour (and often the lack of it), is explained
by the extent to which other things are not ‘equal’.
Many green purchases involve some form of com-
promise over conventional purchases such as:
䊉 Paying a green premium: This can be imposed by
economic necessity where improving eco-
performance increases production costs.
Alternatively it can be created by marketing
strategies in which greener products aimed at
green market niches are given a premium price
irrespective of production costs.
䊉 Accepting a lower level of technical performance
in exchange for improved eco-performance (e.g.
rechargeable batteries provide less power but are
ultimately more cost effective and greener).
䊉 Travelling to non-standard distribution outlets
(e.g. Ecover detergents were originally marketed
through health-food shops, and alternatively
fuelled cars need to access suitably equipped
service stations).
Where there is a compromise involved in making a
greener purchase, a key factor which will deter-
mine whether or not this is acceptable to cus-
tomers, is the confidence they have in the social or
environmental benefits involved. Customers will
need to be confident that:
䊉 the issue(s) involved are real problems;
䊉 the company’s market offering has improved
eco-performance compared to competitor or
previous offerings;
䊉 purchasing the product will make a material
difference.
Analysing green purchases in terms of the com-
promises involved and confidence engendered
can help to explain some of the inconsistencies in
the research findings into green consumer behav-
iour. The majority of consumers profess environ-
mental concern, a desire to buy greener products
and a willingness to pay more for them or to accept
technical performance reductions. Far fewer con-
sumers are measurably changing their purchas-
ing behaviour, and this has been interpreted as a
failure to back up purchase intentions and a ten-
dency to over-report social and environmental
concerns (Wong et al., 1996). This undoubtedly
explains part of the discrepancy, but the missing
element is the scepticism exhibited by customers
relating to companies’ green marketing offerings
and their motivations (Mohr et al., 2001). Reducing
the compromises involved in green consumption,
571
whilst increasing consumer confidence in the
environmental and ethical value in the green
products they are offered, will be crucial for the
development of green markets in future. The
success of the FairTrade brand Café Direct in
becoming the UK’s third largest roast and ground
coffee brand is based upon a balance of competi-
tively priced and excellent tasting coffee, made
available through mainstream retailers, and
marketing that communicates the social worth of
the products, backed by a trusted certification
scheme.
In relating environmental knowledge to green
consumption, researchers assume that increasing
environmental knowledge will increase the desire
to purchase greener products. The reverse may be
true, in that increasing environmental knowledge
may reduce a consumer’s confidence in the effect-
iveness of market-based solutions for environ-
mental challenges, and may make them more
aware of the short-comings of products being mar-
keted on a green platform (Peattie, 2001). There
has been a tendency for green consumer behav-
iour to be understood by grafting social and envir-
onmental concerns onto conventional models of
consumer behaviour such as the ‘Theory of
Planned Behaviour’ or the ‘Theory of Reasoned
Action’. In an extraordinarily thorough review of
the challenge of promoting sustainable consumer
behaviour, Jackson (2005) demonstrates the limita-
tions of such an approach and the need to move
beyond models and theories that concentrate on
consumers as individuals and consumption as a
very rational and conscious process of satisfying
individual wants. Jackson’s analysis demonstrates
the importance of the social aspects of consump-
tion including the influence of families, of life-
styles, of the social meanings of products, and of
habit on consumers’ purchasing behaviour.
Eco-performance
Sustainability is the underlying principle of green
marketing, and a company can justifiably claim
green credentials if it is demonstrably and consist-
ently moving towards it. Achieving sustainability
is not a prerequisite for a valid claim to be green,
just as 100 per cent customer satisfaction is not a
prerequisite to claim a marketing orientation. In
many markets, economic and technical consider-
ations preclude sustainability as a short-term
objective for green companies, even though
sustainability can be their ultimate goal.
572 The Marketing Book

Socio-environmental
outputs

Resource management
te
as
Physical 'Site management' W c
mi
assets fixed asset management
o no
c
-e cts
Human
Employment policies o cio mpa
resources S i

Finances Investment policies n

u tio
P oll
Downstream Information Openness with stakeholders
supplier
performance
Inbound Production Distribution Pa
logistics ck
ag
ing
Sustainability Resource Energy efficiency Pr
od
of sources efficiency Product wastage an uc
d d t fo
Waste and Emissions isp r u
pollution Cu os se
sto al
Human impacts me
re
Af du
ter ca
-sa tio
Process management les n
se
rvi
ce

Market
outputs

Figure 28.2 Components of environmental performance

Consumers’ ability to discriminate in favour of comparisons of companies, products and technolo-

responsible companies and to avoid the irrespon-
sible will depend upon the existence and communi-
cation of meaningful measures to compare the
relative ‘eco-performance’ of products, technolo-
gies and companies. This is far from straightfor-
ward. A question like ‘What constitutes a green
product?’, has no simple answer. Is it one that has
achieved sustainability? One that is better than its
competitors? One that is less harmful than the
product it replaces? Or one produced by a com-
pany with a good environmental management sys-
tem? How can we compare the importance of
different types of social and environmental impact?
Such dilemmas are exemplified by the consumer in
the supermarket seeking to make responsible
choices amongst the produce on offer. Does the
locally produced, low food-miles option, the Fair
trade product from a poor country or the organ-
ically grown produce represent the ‘best’ choice?
An important new frontier for business academics
and practitioners will be to try to develop eco-
performance measures that allow meaningful
gies to be made by, and on behalf of, consumers and
organizational buyers (see e.g. Epstein and Roy,
2001).
Developing a holistic understanding of eco-
performance, requires an appreciation of how the
external environment (and workforce) is
impacted by the product throughout its physical
life cycle, the production system, the organization
and the supply chain of which it is a part. Even
for companies with little interest in competing on
a social or environmental basis, these issues are
important to understand, if only in terms of iden-
tifying potential strategic vulnerabilities and
risks. This process is analogous to Porter’s Value
Chain approach, as shown in Figure 28.2.
Going green: the philosophical
challenge
If green marketing is viewed as the process of
responding to socio-environmental concerns in
Green marketing
the marketing environment, and producing
products with superior eco-performance to meet
customers’ needs and to generate competitive
advantage, it simply represents a variant of exist-
ing marketing thinking and practice. The more
profound differences between conventional and
green marketing are reflected in the values and
philosophies which underpin a green marketing
strategy, and the ways in which particular elem-
ents of marketing are conceptualized (Peattie,
1999). Integrating sustainability into marketing
will require more than an emphasis on the devel-
opment of new greener products and cleaner pro-
duction processes. It will require a re-evaluation
of some fundamental marketing assumptions
and concepts (Kilbourne et al., 1997), including:
䊉 Marketing’s legitimacy: Marketing’s role in driving
forward economic growth by stimulating demand,
and its role in satisfying customer wants have
always legitimized marketing, to the extent that
the benefits of ever increasing consumer choice
and economic growth have gone largely
unquestioned.A sustainability perspective raises
questions about the legitimacy and ethics of
marketing as it is currently practiced.
Conventional marketing has a focus on the wants
and needs of the current generation of
consumers, with little consideration of the impact
of their consumption activities on the
consumption and quality of life opportunities of
future generations of consumers. Marketing is
largely concerned with addressing the wants of
those within wealthy countries in a world where
UN figures reveal three billion people whose basic
needs are not met because they live on less than
$2 a day.They also live outside the consumer
economy because they have little or no disposable
income.According to United Nations
Development Programme figures by the turn of
the century, the richest 20 per cent of the global
population within the industrialized nations were
consuming 86 per cent of global resources, whilst
the poorest 20 per cent of the global population
shared only 1.4 per cent of the planet’s resources.
Ecological footprint research demonstrates that
the lifestyle of the average UK consumer would
require three Earth’s worth of resources to
extend it to the entire planet (and five Earths to
globalize the American consumer lifestyle).The
ethics of such imbalances and the continued
pursuit of economic growth when evidence
demonstrates that existing patterns of
consumption and production cannot be sustained
573
by the planet are rarely questioned or even
acknowledged as an issue in marketing books or
discussions.
䊉 Consumers: Henri Fayol once quipped about
sending out for workers, but human beings
turning up instead. Similarly, green marketers need
to reconsider their approach to consumers.The
word ‘consumer’ epitomises a view of customers,
not as people, but as a means of consumption. In
marketing a very limited number of consumer
wants or needs are considered at a time, yet
peoples’ needs and wants are many, varied and
often potentially incompatible. One may yearn to
live in an area free from the pollution, congestion
and danger posed by cars, and yet be unwilling to
give up the personal mobility benefits that car
ownership provides. Just as a product is more
accurately analysed as a ‘bundle of benefits’, a
customer should be considered as possessing a
‘bundle of wants and needs’. By contributing to
reduced environmental degradation, green
consumer behaviour addresses an inherent human
need for a viable environment, which may
sometimes be at the expense of more explicit
material wants. Recent years have witnessed an
increasing range of conservation-orientated
behaviour among consumers, from the recycling
of cans and bottles to the boom in returning
consumer durables to the supply chain through
eBay or car boot fairs.
䊉 Customer satisfaction: In the past, customer
satisfaction has been judged in terms of the
performance of the product at the moment (or
during the period) of consumption.A green
consumer may reject a product because they
become aware of the environmental harm that
the product causes in production or disposal.
They may also avoid a product because they
disapprove of the activities of the producer, its
suppliers or investors. Even the concept that real
satisfaction is derived from material consumption
may need to be challenged. Ironically marketing
assumes that consuming products produces
satisfaction, yet economics, a discipline that
marketing leans heavily upon, assumes that human
needs are insatiable. Research from psychology
has demonstrated a complex and loose
relationship between material consumption and
happiness, and that beyond a certain level of
material consumption; we derive little additional
satisfaction from further consumption. Robert
Lane (2000) in his book ‘The Loss of Happiness in
Market Economies’ outlines the risk that societal
pressures to maintain levels of material
574
consumption (including commercial marketing)
actually keep us away from more intrinsically
satisfying activities such as spending time with
friends and family. One challenge to the
conventional approach to consumption is the
trend towards ‘downshifting’, the stepping out of a
hard-working, high-earning, consumption-intensive
lifestyle and into one that is less materially
rewarding, but ultimately more satisfying
(Andrews and Holst, 1998). Research in 2004 by
Prudential Insurance revealed that some 1.4
million Britons had purposefully reduced their
incomes in exchange for a better quality of life,
with a further 600 000 hoping to downshift within
the next 2 years.
䊉 The product concept: If customer satisfaction is
increasingly dependent upon the production
process and on all the activities of the producer,
we are approaching the situation where the
company itself is becoming the product
consumed. Drucker’s (1973) famous concept that
‘Marketing is the whole business seen from its final
result, that is from the customers’ point of view’,
seems set to become an enforced reality for many
businesses, because the green movement means
that customers (or those who influence them) are
now actively looking at all aspects of their
company.
䊉 Producer responsibility:The responsibilities of the
producer were conventionally seen in terms of
ensuring that products were fit for purpose, fairly
represented, safe and not priced or promoted in a
way that exploited customers. Environmental
concern has added a new layer of responsibility
concerned with the fate of the product at the end
of its life-span (and increasingly enshrined in
extended producer responsibility legislation such
as the European ELV and WEEE Directives), an
issue which was previously irrelevant to
marketers beyond signalling the possibility of a
new purchase. For consumer durables such as
cars, white goods and consumer electronics, these
new responsibilities will have considerable impacts
on product design and supply chain management.
䊉 Criteria for success: Conventional marketing theory
implies that if the enduring four Ps of the mix are
right, then success will follow in the form of a fifth
P- ‘Profits’. Success in green marketing involves
ensuring that the marketing mix and the company
also meet four ‘S’ criteria (Peattie, 1995):
– Satisfaction of customer needs.
– Safety of products and production processes
for consumers, workers, society and the
environment.
The Marketing Book
– Social acceptability of the products, their
production and the other activities of the
company.
– Sustainability of the products, their production
and the other activities of the company.
䊉 Demarketing: One unavoidable conclusion of green
marketing logic, is that where a product is being
consumed and produced in an unsustainable way,
it may have to be demarketed (either voluntarily
or forcibly) to reduce consumption. Consumption
reduction was explored by Fisk in his ‘Theory of
Responsible Consumption’ (1973), but is a concept
which most politicians, economists and business
practitioners would prefer not to contemplate.
However, in tourism and energy markets, changes
in pricing or access to products have been used to
try to reduce the level of consumption.
Going green: the management
challenge
The majority of green marketing activity that
emerged during the late twentieth century was
not radically different to existing conventional
marketing, and did not reflect a revolution in mar-
keting practice or philosophy in adopting sustain-
ability principles. Some alternative brands which
were founded on social, ethical and environmental
principles such as Body Shop and Ben & Jerry’s
emerged and expanded from market niches into
global businesses. More typically greening
involved evolutionary changes in which existing
brands improving the material and energy effi-
ciency of their products and production processes,
and sought to reduce pollution and waste. More
recently even those pioneering alternative com-
panies and brands have been absorbed by the
mainstream global companies that they were
originally established as an alternative to: Body
Shop’s absorption into L’Oreal, Green & Black’s
into Cadburys, Ben & Jerry’s into Unilever, and
the purchase of the Ethos ethical water brand by
Starbucks are all examples of this trend. Whether
this represents the increasing ethical orientation
of the mainstream companies, or represents them
seeking to acquire their way into growing market
segments, and simultaneously neutralizing a per-
ceived strategic threat from alternative green
brands, remains to be seen.
Marketers’ becoming interested in measuring
and managing their eco-performance may reflect
external drivers of legislation, customer demand,
Green marketing
competitor initiatives and public opinion, or
internal drivers relating to top management com-
mitment, corporate strategy or the pursuit of
competitive advantage (Bannerjee, 1999). What-
ever the motivation, making a commitment to
improve or compete on eco-performance can be
challenging. Even among those companies well-
known for good eco-performance, greening pro-
grammes have often been prone to hitting what
Robert Shelton of Arthur D. Little described as a
‘Green Wall’. Here the management responsible for
environmental improvement, and their strategies,
come into conflict with entrenched corporate power
balances and values once the ‘low-hanging fruit’
represented by initiatives such as energy savings
and packaging reductions have been ‘picked’
(Shelton, 1994). Such evolutionary improvements
in efficiency and environmental performance are
easily accepted by organizations. The develop-
ment of more radical ‘clean’ technologies, changes
to existing market structures and relationships, or
more radical changes to elements of the marketing
mix, are more likely to meet corporate resistance. It
is clear that for managers seeking to promote cor-
porate social and environmental improvement,
there is also a significant internal marketing task to
address. Evidence suggests that the most success-
ful corporate social and environmental improve-
ment programmes are those which reflect both a
belief in the business benefits of such programmes
and the underlying values of the company (Weaver
et al., 1999).
Adopting a holistic perspective
As social and environmental pressures on, and
expectations of, businesses grow, so marketers
need to have a greater appreciation of, and input
into, all aspects of a business, its products and its
production system. How energy efficient is our pro-
duction process? Where are raw materials sourced
from? Where is spare capital being invested? How
well do we treat our workforce and suppliers?
Such questions were once not the concern of mar-
keters, but today they are increasingly likely to
influence the perceptions of important stakehold-
ers including customers, and are therefore strategic
marketing issues. Addressing such questions, and
the demands for answers to them, requires new
information for marketers and new approaches to
the management of that information. Initially
many companies have sought to integrate social
and environmental issues into existing approaches
575
to quality management through the implementa-
tion of environmental management standards and
systems such as the ISO 14000 standards. A range
of new auditing services are now available to
companies so that their conventional financial,
strategic and marketing audits can be comple-
mented by social and environmental audits.
Embracing a stakeholder approach
A ‘stakeholder approach’ is vital for the develop-
ment of appropriate and holistic green philosophies,
strategies and policies (Polonsky and Ottman,
1998). Internally and externally organizations
face growing interest in their eco-performance
from an increasing range of interested parties.
Table 28.1 highlights a range of stakeholders and
examples of socio-environmental issues that
could be associated with the development, manu-
facture and marketing of a particular product.
New management responsibilities
The conventional marketing paradigm empha-
sizes consumer sovereignty and casts the mar-
keter as a relatively passive servant pledged to do
the consumer’s bidding. A sustainability perspec-
tive includes a greater emphasis on considering the
welfare as well as the wants of customers, and
also the welfare of those beyond the market. This
requires a greater emphasis on companies taking
responsibility for their customers and products and
is reflected in the idea of ‘Product Management’
evolving into ‘Product Stewardship’, in which
managers seek to manage and minimize the neg-
ative impacts of products throughout their life
from design through to disposal. In agro-chemicals
markets where difficulties with correct product
use often occur in countries with low-literacy rates
among farmers, some companies are using the con-
cept of product or brand stewardship to ensure cor-
rect product use. Dow Corning, for example,
demands that its agro-chemical sales staff:
䊉 inform customers about known hazards relating
to the products;
䊉 advise customers to use products in accordance
with label recommendations;
䊉 insist that distributors pass on handling, use and
disposal information to their customers;
䊉 report and respond vigorously against cases of
misuse;
䊉 co-ordinate visits by company staff to customer
sites, to ensure safe use and disposal of products.
576 The Marketing Book

Table 28.1 Stakeholder interest in product impacts

Stakeholder Potential issue Indicator

Company shareholders Product safety and acceptability Prosecutions

and managers Inclusion rate in ethical funds
Employees Harmful processes and substances Accident rate; time lost due to
injury
Customers Labelling Customer satisfaction; breaches of
government/industry guidelines.
Business partners Product recall handling Efficiency, speed and success of
product recalls
Suppliers Involvement in research and Results of supplier element of life
development cycle analysis and use of results in
the design process
Competitors Health and safety performance Performance against industry
and effect on industry reputation benchmarks and guidelines
Government and regulators Product stewardship Quantity of hazardous non-
product output (NPO) returned
to process or market by
reuse/recycling
NGOs, pressure groups and Product safety and socio- Incidence of NGO/regulatory
other influencers environmental impacts targeting
Communities Harmful substances Releases to air, land and water of
NPO

Source: Adapted from WBCSD (2000) Corporate Social Responsibility: Making Good Business Sense, Geneva, Switzerland.

this could be many years and the question of actual

Changing the marketing timeframe
The need to look beyond the interests of the cur-
rent generation of consumers is one time-based
challenge for the green marketer operating in a
business culture characterized by increasingly
short-term shareholder expectations and time
horizons. Even within conventional time-frames,
although production and consumption is a multi-
stage process, it is the actual purchase which is the
focus of marketers’ attention, and which is still the
focus of the majority of the literature dedicated to
marketing (Kotler and Armstrong, 2004). Greening
requires a new time perspective incorporating a
‘cradle-to-grave’ view of products that considers
their performance through all the stages of their
physical life cycle. In the case of consumer durables
durability assumes a new importance. Evidence
suggests that many products currently exist only
as semi-durables, and creating more durable
products can form an important part of a green
strategy. Agfa Gevaert switched from a policy of
selling photocopiers, to leasing them on a full
service basis. This led to a product redesign brief
based around durability, and the upgrading of
the copy drums from a lifespan of under 3 million
to over 100 million copies. For marketers this can
represent a significant departure from previous
strategies since it effectively reduces rates for
product replacement, and may require a switch of
emphasis in strategy away from purchase and
towards leasing or towards the marketing of
complementary products and services.
Green marketing
• Design
• Choice of material
• Extraction of raw materials
• Material manufacture
• Use of recycled materials
• Transport of materials and
• components
• Manufacture of components
• Washing machine manufacture
• Packaging
• Transport
• Operation
• Durability
• Reliability
• Detergent use
• Water use
• Collection, transport
• Recycling
• Landfill, incineration
Figure 28.3 A washing machine’s life cycle
The need to examine the impact of products
from cradle-to-grave, is leading towards the con-
cept of remarketing or even closed-loop (waste-
free) marketing. Various tools are being developed
to aid the green marketer to assess the full envi-
ronmental impact of products, the best known
being Life cycle Analysis and Eco-balance Analy-
sis. The greatest difficulty for the marketer is to
know how far forward or back, and down how
many of the branches of the supply chain, such an
analysis should go. An example of a cradle-to-
grave life cycle is provided in Figure 28.3.
The practical challenge: greening the
marketing mix
Green product management
To create a significantly greener economy, there will
need to be a range of new and greener products
577
Energy
raw materials
Production
Emissions
solid waste
Energy
Distribution
Emissions
solid waste
Energy
water
Use
Emissions
solid waste
Energy
Disposal
Emissions
solid waste
and technologies. Instead of seeking to ameliorate
environmental and social impacts of existing
products and technologies through ‘end-of-pipe’
initiatives, there is a growth in more innovative
‘clean technology’ solutions. This is reflected in the
inclusion of eco-performance criteria in the new
product development processes of many industries
through concepts like ‘Design for Environment’.
Successful development of new green products
requires high levels of internal cross-functional
communication and integration, good information,
early consideration of green issues, strong support
from top management and a specific approach to
measurement and benchmarking (Pujari et al.,
2002). Guidelines for conducting product-specific
marketing audits that summarize the relative
socio-environmental impacts of products are now
available to help marketers tackle these issues
(see for example Fuller, 1999).
Green product attributes fall into two gen-
eral categories. Firstly, there are those relating
to the social and environmental impacts of the
578
tangible product (or service encounter) itself.
For a car manufacturer, these attributes would
include issues like fuel efficiency, longevity and
safety during use and recyclability once the vehi-
cle reaches the end of its working life. A key prod-
uct management and design challenge that a
green perspective introduces, is the emphasis on
the product’s post-use fate. Improving the post-
use eco-performance of products can be achieved
through a modular design approach and good
after sales service provision to make repairing
products cost effective. Alternatively systems
can be set up to collect post-use product (as is
now mandatory in Europe for cars and electron-
ics) for reuse in other markets, remanufacture, or
for the recycling of valuable components and
materials.
The second category of attributes relates to
the processes by which the product is created,
and the policies and practices of the company
that produces it. Conventional marketing talks
about the core product, the tangible product
(which includes packaging and other physical
dimensions) and the augmented product (includ-
ing service dimensions). Since green marketing
requires an approach to product management
which incorporate how the product is made as a
product attribute, it is helpful to think of this as
the ‘total product’ concept (Peattie, 1995). Fair
trade or organic produce, recycled or non-chlorine
bleached paper, ‘green’ energy from renewable
sources or cruelty-free cosmetics are all examples
of products marketed on the merits of the means
of production or the organization behind the
products.
Green packaging
Discarded packaging accounts for a large pro-
portion of waste in industrialized economies
and a good deal of the environmental impact
of many products. For the UK data from Biffa
Waste Services shows that packaging accounts
for 3 per cent of the total resources consumed
within the UK economy and 40 per cent of all the
plastic consumption in Europe. Packaging waste
also grew in the UK by 12 per cent between 1997
and 2005. Packaging has therefore been an obvi-
ous starting point for many companies’ green
marketing efforts, since it can often be safely
and cost-effectively reduced without expensive
changes to core products or production processes
and without a risk of disaffecting customers. For
The Marketing Book
example Marks and Spencer successfully made
their ready meal packaging 30 per cent lighter
and Boots redesigned their Botanics shower
gel range to require 18 per cent less packaging
materials.
As with many dimensions of green mar-
keting, success in practice can be more difficult
than some of the prescriptive advice available for
marketers suggests. When Sony experimented
with reclaiming and reusing packaging materials
for its television sets, it led to a customer mis-
conception that the product inside the packaging
was also not new. For the reuse and recycling
of packaging materials to make a meaningful
difference, manufacturers need to ensure that
efforts are supported by the infrastructure of col-
lection systems and customer information and
education.
Green promotion
Many companies have sought to promote them-
selves and their products through explicit or
implicit association with environmental or social
issues. However promotion has been one of
the most controversial areas of the green market-
ing agenda. Conventional advertising has been
criticized for presenting green products as over-
simplified solutions to complex environmental
problems at best or prone to ‘Greenwashing’
and ‘Green Hype’ at worse (Carlson et al., 1993).
The result of such concerns has been the emer-
gence of the concept of ‘sustainable communi-
cations’ rather than the more narrowly defined
concept of green promotion. Sustainable commu-
nications strongly stress a dialogue with stake-
holders, particularly customers, aimed at informing
and educating those customers, and seeking to
establish the social and environmental creden-
tials of the company and its products. Often
this has been addressed through an emphasis on
corporate-level communication campaigns, and
through partnerships and alliances. MORI sur-
vey results indicated that 30 per cent of British
adults had recently bought a product or service
because of the company’s link to a charitable
organization.
Ottman et al. (2006) propose that the secret to
successful communications for green product is
to effectively connect the product’s attributes and
the brand message with the value desired by con-
sumers. Some of the examples they highlight are
summarized in the table (p. 579).
Green marketing 579

Desired consumer value Message and business/product

Efficiency and cost ‘Did you know that between 80 and 85 per cent of the energy used to
effectiveness wash clothes comes from heating the water? Tide Coldwater – The Coolest
Way to Clean.’ Tide Coldwater Laundry Detergent ‘mpg:)’
– Toyota Prius
Health and safety ‘20 years of refusing to farm with toxic pesticides. Stubborn, perhaps.
Healthy, most definitely.’ – Earthbound Farm Organic
Performance ‘Fueled by light so it runs forever. It’s unstoppable. Just like the people who
wear it.’ – Citizen Eco-Drive Sport Watch
Symbolism ‘Make up your mind, not just your face.’ – The Body Shop
Convenience ‘Long life for hard-to-reach places.’ – General Electric’s CFL Flood Lights
Bundling ‘Performance and luxury fueled by innovative technology.
– Lexus RX400h Hybrid Sports Utility Vehicle

Different communications issues will arise depend- Integrated communications is increasingly

ing upon the nature of the media that marketers
use. Advertising brings with it the danger that the
company will be accused of green hype or trivial-
izing or exploiting serious social and environmen-
tal issues. On-pack promotion appears a useful
and effective means to influence consumer deci-
sions, but it can be difficult to explain a complex
issue on a package that you are also trying to
reduce in size. Direct mail may seem like an effec-
tive way to target the most environmentally con-
cerned consumers, but creates the danger of being
perceived as a ‘junk mailer’. Sales promotions or
sponsorships linked to social or environmental
causes have been shown to be very effective, but
they need to be selected carefully to ensure that
there is synergy with the product being promoted.
Otherwise customer evaluations of the company
can actually deteriorate (Mohr et al., 2001). Personal
selling in non-consumer markets is often important
and requires the sales force to be aware of the envi-
ronmental implications of the company and its
products and processes (Drumwright, 1994). Public
relations has also been a key communications chan-
nel for companies to put across messages relating to
good eco-performance, both in relation to brands
and to corporate-level communications aimed at
building corporate reputation and identity. Given
the scepticism consumers are increasingly exhibit-
ing in relation to green messages using conven-
tional marketing communications media, Ottman
et al. (2006) recommend innovative usage of word-
of-mouth, e-mail and online ‘word-of-mouse’ to
create a credible ‘buzz’ about new green products.
viewed as a key ingredient to marketing success.
It is particularly important when companies are
attempting to promote themselves, or protect
themselves, in relation to social and environmen-
tal issues. If one part of a company is attempting
to gain competitive advantage on the basis of eco-
performance, then competitors, NGOs, the media
and regulators will be forming an orderly queue
to attack the company if another part of that com-
pany is seen to be failing to live up to the image.
The key is to understand the concerns of stake-
holder audiences and then to communicate effect-
ively and efficiently.
Green pricing
Pricing represents the crux of the green marketing
challenge. If the external social and environmental
costs of production were reflected in the prices that
customers pay, then there would be considerable
incentives for manufacturers to reduce those costs
and become more sustainable. Companies seek-
ing to absorb those costs and pass them onto the
consumer, are vulnerable both to accusations of
exploiting customer interest in green products, and
to undercutting from competitors still effectively
subsidized by the environment. The ‘win–win’
argument for greening proposed by the like of
Porter and van der Linde (1995) suggest that con-
sumer demand for green products can allow for
the addition of a green price premium, as applies to
free-range eggs and dolphin friendly (rod and line
caught) tuna.
580
Greening strategies can affect the cost struc-
tures of a business with a knock-on effect on prices,
particularly if pricing is on a ‘cost plus’ basis.
Developing new sustainable raw material sources,
complying with legislation, writing off old, ‘dirty’
technologies, capital expenditure on clean tech-
nology and the overheads associated with green-
ing the organization can impose a cost burden.
However, this can be counterbalanced by the sav-
ings made by reducing raw materials and energy
inputs, by reducing packaging, cutting waste dis-
posal costs and by finding markets for by-products.
If costs are looked at holistically and managed on a
portfolio basis, then wider eco-efficiency process
benefits, when added to premium demand bene-
fits, can counterbalance the costs of greening to
make a positive contribution to profitability. Elec-
trolux’s ‘Green Range’ of white goods, for exam-
ple has a lower environmental impact than the
company’s standard range, and has also achieved
a 3.5 per cent higher gross margin.
Progress towards sustainability may be
aided if the focus on ‘purchase price’ within mar-
keting could be reduced in favour of a focus on
‘total cost’ and ‘pay-per-use’. Low energy light
bulbs, for example, have a higher purchase price,
but a lower overall running cost for consumers.
Buildings are also built to a price, rather than built
to deliver a certain level of overall usage costs.
A total cost focus would result in buildings which
were more expensive to purchase, but which were
economical in the long term and which would
reduce a significant element of society’s environ-
mental impact. So far consumers have often been
resistant to changes to pricing and payment
schemes even when they are cost-beneficial (Elec-
trolux’s experiments with pay-per-wash pricing
for washing machines failed to win over con-
sumers, although Ottman et al. (2006) blame this
on a misplaced promotional strategy). Better infor-
mation about the social and environmental costs
attached to products might also give consumers
more complete information and more incentive to
change their behaviour. It is quite common for con-
sumers of veal for example, to enjoy it far less once
they discover exactly how it is produced.
Green logistics
The environmental impact of many products is
strongly determined by the fuel consumed and
materials used in transporting them to customers.
Early efforts in developing greener logistics have
centred around the reduction and recycling of
The Marketing Book
transit packaging and the optimization of distribu-
tion routes and driving practices for fuel efficiency.
Getting the optimal environmental performance in
distribution can be difficult. Reducing package
thickness, for example, can reduce the resources
consumed and the energy used in distribution, but
increase the level of in-channel waste due to the
reduced level of protection for the product. Simi-
larly, larger trucks reduce the amount of fuel con-
sumed per product unit moved, but have a greater
negative impact on roads and the communities
they pass through.
In the future the implementation of ‘carbon
taxes’ on fossil fuel consumption and congestion
charges will affect the economics of distribution.
This could ultimately encourage industries to
replace global production and distribution chains
with global networks of operations producing
and distributing on a more regional or local scale.
The growing ability of ‘smart’ production systems
to produce customized production batches at com-
petitive unit costs may allow economies of dis-
tance to outweigh economies of scale. The new
requirements for companies to take back products
and discarded packaging will also require a signifi-
cant redesign of distribution channels to handle
the ‘reverse logistics’ involved in reusing contain-
ers, and reclaiming waste and end-of-life products.
Labelling
Labelling has been a particularly important issue
within green marketing, with relevance to both
promotion and logistics. As a promotional device,
green labels are often important to provide cus-
tomers with a simple and trustworthy signal of a
product’s social and environmental credentials
(Ottman et al., 2006). There are long-standing
national labelling schemes such as the German
‘Blue Angel’ scheme which are extensively trusted
and used by consumers. There are also more spe-
cific schemes which relate to particular industries
or products (e.g. Rug-mark carpets made without
child labour); or to particular methods of produc-
tion (e.g. organic certification from the Soil Associ-
ation) or business conduct (e.g. the Fair Trade
mark). Labelling can also support consumer recy-
cling behaviour, for example by labelling plastic
containers by type to simplify sorting and
recycling.
Labelling programmes vary in terms of
whether or not they are mandatory or voluntary
within a particular industry, whether they involve
single or multiple issues, the level of information
Green marketing
they provide and the level and style of verification
that underpins them. Each of these dimensions has
provided ample opportunity for controversies
about labelling schemes within industries and
between companies, regulators and NGOs (as
befell the troubled EU Eco-label scheme).
The evolving agenda: from green
products to sustainable value
The early years of green marketing, much like the
early years of industrial growth after the Second
World War, have been dominated by a focus on
products. Initially greening centred on specific
physical products such as lead-free fuel, recycled
paper, organic food or cruelty-free cosmetics. The
key difference lay in the emphasis on how the
product was made, both as a product attribute,
and as an influence on consumer demand.
Gradually the focus in green marketing has
broadened to include services such as tourism
and financial services. Globally, services account
for the majority of economic activity, and of eco-
nomic growth, yet there is little research on the
sustainability impacts of services, coupled with a
lack of methodologies to pursue sustainable serv-
ice design and development. Yet some elements
of the service economy such as transport, travel
and hospitality have considerable social and envir-
onmental impacts. Typically, services are a combin-
ation of intangible elements (services), physical
elements (products) supported by an infrastruc-
ture (systems). Viewing the delivery of value to
customers holistically as a Product Service System
(PSS) is an increasingly common approach in
research communities, but it is an approach which
most businesses are, as yet, unfamiliar with.
Taking a holistic PSS-based view is important,
because increasingly there is a blurring of the
edges as to what exactly represents a ‘service’.
Also, the extensive use of outsourcing as a service
in many industries can also obscure the nature and
distribution of the socio-environmental impacts of
production. To make progress towards sustainabil-
ity, supply chain management and service design
will become an increasingly important business
process. It is important for people involved in the
design of any product, service or PSS (including
marketers, design engineers, industrial designers,
procurers, supply chain managers and entrepre-
neurs) to take account of life cycle impacts to deter-
mine environmental and social impacts, and to
seek strategies to minimize negative impacts.
581
The blurring of the distinction between
products, services and systems means that for the
future of green marketing, perhaps we should be
thinking more in terms of ‘sustainable solutions’.
Sustainable solutions are products, services or
system changes that minimize negative (and max-
imize positive) sustainability impacts throughout
and beyond the life cycle of existing products
or solutions, while fulfilling acceptable societal
demands and needs. In improving these aggre-
gate impacts, these solutions are delivering ‘sus-
tainable value’. These concepts allow us to take
a more holistic view of the economy and its out-
puts, process and goals. Sustainable solutions
(whether products, services or PSS), represent
the outputs, and green marketing and sustainable
design represent the processes which aim to
deliver those outputs. However, the ultimate goal
should be to deliver higher levels of net sustain-
able value (that satisfy customers and other
stakeholders) through those outputs (Charter
and Clark, 2002).
The future of green marketing
Sustainability as a concept can be controversial,
open to multiple interpretations, hard to measure
and difficult to translate into meaningful action
amongst the very real political, economic and tech-
nological constraints faced by companies and gov-
ernments. The underlying reality is very simple.
Any system or activity that is not sustainable ultim-
ately cannot be sustained. Although this can be
dismissed as a truism, it is a point that often seems
to be missed. The last 50 years have witnessed
some extraordinary developments in technologies,
products, markets and marketing. It has also
witnessed a doubling of world population from
around three billion to over six and a half billion.
Without becoming more sustainable, over the next
50 years, marketing will struggle to do more than
to deliver an increasingly mixed and short term
set of blessings, to a shrinking proportion of the
world’s population.
The dangers of unsustainable growth have
rarely been more clearly illustrated than during
the boom and bust of the ‘Dot com’ financial bub-
ble. It demonstrated a lot of simple truths about
the need for businesses to deliver real benefits and
generate real and sustainable income streams, and
also the dangers of profligate spending today on
the promise of the wealth that new technologies
582
will deliver tomorrow. These truths also apply to
the industrialized economies as a whole. Many of
the environmental costs of production and con-
sumption are not being fully reflected (either
directly or indirectly via taxation) in the cost
structures of companies and the prices paid by
their customers. This means that society and the
environment are currently subsidizing our con-
sumption and production. Our businesses are
environmentally ‘over-trading’ and this is not a
position that can be maintained indefinitely. Com-
panies can grow and apparently prosper while
running up huge financial debts (as Enron and
Parmalat did). The danger is that the longer a debt
accumulates, the more destructive the crash then
becomes. While our businesses continue to con-
sume the Earth’s natural capital at an unsustain-
able rate, the risks grow that this environmental
debt will create significant social and environ-
mental consequences. The world cannot maintain
its recent trends of growth in consumption and
production without future consumers, and the bil-
lions living outside the consumer economy, bear-
ing the cost.
The role that marketing can, and should, play
in the development of a more sustainable economy
has been the subject of some debate. Marketing
has often been presented as part of the problem in
stimulating unsustainable levels of consumption,
and in using public relations and other means of
communication to obscure or deny the negative
consequences of that consumption. Marketing is
also frequently presented as an important part of
the solution in the context of market mechanisms
being used to encourage more sustainable con-
sumption. It is certainly true that marketing as a
tool can be used to help or hinder the sustainability
agenda. Some environmentalists have criticized
green marketing on the basis that ‘Changing our
shopping habits will not save the world’. This is
true, but if it creates improvement in the eco-per-
formance of businesses, it will buy much needed
time in which to understand how to make the
more important changes to our economic, techni-
cal and political systems, in order to manage our
environment in a sustainable way. It is clear that
the greening of marketing and market forces will
only have real meaning if accompanied by changes
to corporate values and strategies, regulations,
investment processes, political systems, educa-
tion and trade. Belz’s (2006) vision of ‘transforma-
tional sustainability marketing’ sees companies and
marketers working to help create changes to the
framework conditions for marketing through
The Marketing Book
. . . the active participation of companies in public and
political processes to change the existing framework in
favour of sustainability . . . Within the present institu-
tional framework the successful marketing of sustain-
able products is possible, but limited. The institutional
design fails to set positive incentives for sustainable
behaviour, both for producers and consumers . . .
Changes in institutions are necessary to expand the
intersection between socio-ecological problems and con-
sumption, and to set up the conditions for the successful
marketing of sustainable products beyond niches.’
Another important role that will need to be
played by marketing in the future, is to promote
more sustainable ways to live and consume. In
addition to the marketing of new products, tech-
nologies and services we will need the social
marketing of many ideas, old and new, in order
to make our economies more sustainable. These
will include recycling, fair trade, product–service
substitutions, composting, frugality, energy effi-
ciency and less materialistic ways of life. The con-
cept of sustainability itself will also need to be
marketed.
Despite the human tendency to desire a life
that is similar to the life we know, only better, and
despite the many uncertainties about what a sus-
tainable future might look like, research findings
consistently show that most people would like to
buy greener products from greener companies.
For companies that choose to ignore this cus-
tomer demand (whether explicit or latent) it is
questionable whether they are practising market-
ing at all. Creating more sustainable marketing
strategies will remain an uphill battle whilst
general understanding of the sustainability chal-
lenge and how it relates to our consumption and
lifestyles remains vague, and scepticism about the
ability of companies to contribute to it endures.
Winning this battle will be a key challenge for
marketers in this new millennium, and the out-
come will have a significant impact on the quality
of life of consumers and citizens for generations
to come.
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Further reading
Business Strategy and the Environment (2006)
Special Issue on Sustainability Marketing, 15(3).
Includes six papers on different aspects of
achieving sustainability in marketing including
an analysis of the role played by the media, the
promotion of recycling amongst consumers,
eco-labelling schemes, consumer advice and the
marketing of products to the poorest ‘bottom-of-
the pyramid’ consumers (which poses as inter-
esting dilemma between the social value of
bringing products to the three billion consumers
currently excluded from the market economy
and the environmental consequences of success-
fully doing so).
The Marketing Book
Journal of Marketing Management (1998), Special
Issue on Contemporary Issues in Green Market-
ing, 14(6). This issue pulled together eight
papers from leading experts in the field of green
marketing, covering theoretical contributions,
a critical review of research in the field, and
papers relating to product development,
recycling, sustainable communications and
green alliances. An invaluable starting point for
anyone seeking to understand green marketing
from an academic perspective.
Jackson, T. (2004) Motivating sustainable consump-
tion: a review of evidence on consumer behav-
iour and behavioural change, Centre for
Environmental Strategy, University of Surrey,
Surrey. A tour de force covering the history of
attempts to market to consumers on social, envi-
ronmental and ethical grounds and exploring
the different research traditions in green con-
sumer behaviour research. It develops an inte-
grated approach to understanding consumption
and sustainability combining conventional mar-
keting research with insights from sociology and
psychology and sets out the challenges involved
in motivating behavioural change for policy
makers and businesses.
Charter, M. and Polonsky, M. J. (1999) Greener Mar-
keting, 2nd edn, Greenleaf Publishing, Sheffield.
An edited collection which provides detailed
coverage of the strategic implications of the
greening of marketing, and the implications of
this for the management of an extended market-
ing mix. The themes of the text are reinforced
through a collection of detailed case studies cov-
ering a wide range of organizations.
Fuller, D. A. (1999) Sustainable Marketing, Sage
Publications, Thousand Oaks, CA. An excellent
exploration of marketing from a physical sys-
tems and sustainability perspective. For anyone
who suspects that green marketing is in some
way ‘wooly’ this book provides a very specific
and factual guide to the forces promoting the
greening of marketing and the processes by
which it can be achieved.
McDonagh, P. and Prothero, A. (1997) Green Man-
agement: A Reader, Dryden Press, London. An
excellent edited collection of papers combining
the deeply philosophical with the highly prac-
tical. The practical papers have a strong market-
ing bias, and the entire collection is invaluable for
putting marketing and the environment clearly
in its organizational, social and global context.
Menon, A. and Menon, A. (1997) Enviropreneurial
marketing strategy: the emergence of corporate
Green marketing
environmentalism as market strategy, Journal of
Marketing, 61(1), 51–67. Analyses the evolution
of the relationship between marketing and the
environment and in particular at the emerging
of ‘enviropreneurial marketing’. Provides a use-
ful discussion of the driving forces behind the
greening of marketing, the opportunities that it
provides, and the relationship with corporate
strategy.
Peattie, K. (1995) Environmental Marketing Man-
agement: Meeting the Green Challenge, Financial
Times Pitman, London. A book which attempts
to pull together much of what was written
about marketing and the environment in the
late 1980s and early 1990s to develop a compre-
hensive picture of what the green challenge
means for marketing. Discusses the environ-
ment as a philosophical, strategic and practical
challenge for marketing management, and
illustrates the issues with short case studies at
the end of most chapters.
585
Ottman, J. A., Stafford, E. R. and Hartman, C. L.
(2006) Green marketing myopia, Environment,
48(5), 22–36. A useful article that uses numerous
examples to show how some green marketing
initiatives failed because they did not strike the
right balance between environmental concern
and customer focus. Explores the inescapable
nature of a greener and more materially effi-
cient future for marketing and the steps to suc-
cessfully integrating environmental product
attributes with perceived consumer value.
Shrivastava, P. (1994) CASTRATED environment:
GREENING organizational studies, Organiza-
tion Studies, 15(5), 705–726. An astonishing art-
icle which deconstructs the existing management
paradigm to detail exactly how and why it is
inherently incompatible with the physical envir-
onment within which it exists. Outlines a new
environmental management paradigm and
points the way forward towards a more sustain-
able way of managing businesses.